In today’s global economy, where the trend toward multipolarity is accelerating, India’s foreign trade and investment policies have gained a decisive dimension not only for regional but also for global power balances. Amid the West’s protectionist tendencies, Russia’s economy strained by sanctions, and China’s growing competitive pressure, New Delhi seeks to carve out a unique sphere of maneuver through multi-dimensional partnership strategies. Within this framework, the free trade agreements signed by India go beyond merely deepening commercial relations; they also serve as strategic instruments that accelerate the country’s economic rise and consolidate its role as a “balancing actor” in the international system. In particular, the Trade and Economic Partnership Agreement (TEPA) concluded with the European Free Trade Association (EFTA) strengthens India’s integration into global value chains and demonstrates that the country’s balancing policy between the West, Russia, and China has entered a new phase.
Signed between India and the EFTA on March 10, 2024, and entering into force as of October 1, 2025, the TEPA holds strategic significance at a time when global politico-economic balances are being reshaped. The agreement marks a critical turning point particularly for Norway and Iceland in terms of seafood exports. India’s population of over 1.4 billion and its young demographic structure provide a strategic market advantage for Norway’s small and outward-oriented economy, while the gradual elimination of tariffs on salmon within five years will not only boost Norway’s fisheries sector but also enhance Europe’s competitiveness within global trade networks. Conversely, India’s commitment to facilitating investment and business establishment processes creates long-term institutional access opportunities for EFTA countries. In this context, the United Kingdom’s efforts to implement a similar agreement not only reshape bilateral trade relations but also redefine competition among European countries. The projection that India will become the world’s third-largest economy by 2030 further elevates the strategic importance of this process.[i]
As a complementary component of this development, the distinctive dimension of TEPA lies in the commitment to invest 100 billion USD in India within fifteen years, resulting in the creation of one million direct jobs.[ii] For Norway in particular, the fact that as of October 1, 2025, 42 percent of its exports will enter the Indian market duty-free, and that this rate will rise to 85 percent within five years and 92 percent within ten years, illustrates a dynamic process of liberalization. In this regard, TEPA stands as more than a mere trade agreement between Europe and India; by ensuring long-term investment security and generating employment capacity, it signals a structural transformation within global value chains.
India’s rapprochement with the European Union (EU) is not limited to its engagement with the EFTA. The new EU-India Strategic Agenda, announced by the European Commission in 2025, envisions a broad-based partnership that extends beyond trade to include a security dimension. The procurement of 26 Rafale Marine fighter jets from France for 7 billion euros and the 5-billion-euro submarine construction agreement with Germany strengthen the EU’s strategic partnership with India in the field of defense. However, despite this growing closeness, India’s ongoing defense and energy dependence on Russia, which reflected in the 2025–2026 defense budget, where 36 percent of the 69 billion euros originates from Moscow, poses a serious strategic dilemma for Brussels.[iii] Conversely, the United States’ customs tariffs reaching as high as 50 percent and its increasingly favorable stance toward Pakistan have weakened New Delhi’s relations with Washington, elevating Europe to the position of “the most reliable partner” within the Western bloc. Therefore, the process leading up to the EU-India summit planned for 2026 can be regarded as a convergence not only in economic but also in geopolitical terms.
India’s relations with Russia continue within the framework of a pragmatic strategic partnership. The Russia-India Strategic Partnership Declaration signed on October 3, 2000, and the elevation of these ties to a “Special and Privileged Strategic Partnership” in 2010 mark their 25th anniversary as of 2025. According to the statement by Indian Foreign Ministry Spokesperson Randhir Jaiswal, this milestone represents not merely a reflection on the past but also a forward-looking strategic orientation.[iv] For Moscow, India functions as an economic lifeline amid Western sanctions, while for New Delhi, Russia remains an indispensable partner in energy security and defense procurement. President Vladimir Putin’s remarks at the Valdai Club on October 2, 2025, expressing confidence that India would not abandon Russian energy resources, reaffirmed the economic and strategic dimensions of this dependency.[v] Moreover, his emphasis that U.S. tariff increases have been costly for India, yet no China-like sanctions were imposed, underscored Moscow’s criticism of Washington’s dual-track policies.
A new dimension emerging in Russia–India relations is the expansion of trade into high-technology sectors. On October 2, 2025, the Russian Ministry of Industry and Trade’s directive to urgently collect data from IT and electronics companies stood out as a critical preparatory step for the Eurasian Economic Union (EAEU)–India free trade negotiations scheduled to begin in November 2025.[vi] From Moscow’s perspective, gaining access to India’s vast electronics and semiconductor market constitutes a strategic move aimed at reducing dependence on the West. However, India’s concurrent efforts to strengthen its own “import-substitution” industrial policies highlight the delicate balance between cooperation and competition in bilateral relations.
In this context, the expansion of BRICS and its initiatives toward an alternative financial architecture have gained increasing significance. Following the inclusion of Egypt, Iran, the United Arab Emirates, Indonesia, and Ethiopia after 2023, BRICS now represents 45 percent of the global population and 35 percent of the world economy. As an alternative to the dollar-centered system, the bloc has introduced the BRICS Pay initiative, a network designed to interlink payment systems such as SPFS (Russia), CIPS (China), UPI (India), and Pix (Brazil). Although this framework may not immediately challenge the institutional dominance of the U.S. dollar, it lays the groundwork for a multipolar financial order.[vii] This process provides India with an opportunity to position itself within a multipolar financial system without becoming fully integrated into Western structures. As French geopolitician Aymeric Chauprade noted, Russia is not only an influential actor but also a leading country in this multipolar framework; it has deepened its rapprochement with China and strengthened its strategic cooperation with India.[viii]
Nevertheless, energy security remains the most fragile aspect of India’s multidimensional foreign policy strategy. As reported by Bloomberg, India’s decision to procure LNG from the United States for the first time throughout 2026 demonstrates its determination to diversify energy supplies.[ix] In doing so, New Delhi continues its energy imports from Russia while simultaneously strengthening its cooperation efforts with the United States. This places India’s energy security policies at the very center of its strategic balancing act between the West and Russia.
In the coming period, India’s rapid diversification of free trade agreements could transform the country into a central trade and investment actor not only in the Asia-Pacific but also in Europe and Eurasia. The realization of the 100 billion USD investment and the creation of millions of jobs envisioned under the TEPA framework will strengthen India’s potential to become the world’s third-largest economy by 2030, while also institutionalizing its commercial ties with EFTA countries. Alongside the United Kingdom’s parallel initiatives, this dynamic may intensify strategic competition among European countries over India. At this point, the type of investment and industrial policy New Delhi chooses to pursue will influence not only its own economic development but also the restructuring of global trade networks.
At the same time, India’s rapprochement with the West, balanced by its ongoing strategic partnership with Russia, is likely to give rise to a more complex geopolitical equilibrium in the future. While dependence on Russia in the energy and defense sectors persists, the developing cooperation with the EU in the defense industry further underscores New Delhi’s role as a “balancing actor” in the multipolar order. However, this strategic diversification, although advantageous in the short term, may lead to increased external pressures in the long run. Washington’s tariff-driven pressures and Brussels’ dilemmas stemming from Russian ties are likely to push India into an increasingly delicate diplomatic maneuvering space.
Meanwhile, India’s position within BRICS will be critical in shaping the future of multipolar financial order initiatives. While the maturation of initiatives such as BRICS Pay and the integration of national payment systems provide India with alternative maneuvering space within the dollar-centered financial system, realizing this potential will take time. Consequently, in the coming years, New Delhi is expected to simultaneously pursue strategies to attract Western capital and technological investments while integrating into alternative financial structures via BRICS. This dual approach could position India not only as a rising economy in the global system but also as one of the normative architects of the emerging order.
In conclusion, India’s multidimensional foreign trade and investment policies are positioning the country as a central actor in the multipolar international order of the 21st century. By securing institutional access to European markets through agreements such as TEPA, developing strategic partnerships with the EU in the defense industry, maintaining energy and security ties with Russia, and participating in the search for alternative financial arrangements within BRICS, New Delhi assumes the role of a “balancing pivot” between the West and the East. However, while this strategic diversification offers India a broad maneuvering space in the short term, it may also lead to increased external pressures and deeper multidimensional dilemmas in the long term. Therefore, the roadmap that India pursues in the coming years will shape not only its own economic and political future but also the evolution of global power balances.
[i] “Norway and Iceland to access Indian market as free trade deal takes effect”, Fish Farming Expert, https://www.fishfarmingexpert.com/efta-free-trade-agreement-indian-market/norway-and-iceland-to-access-indian-market-as-free-trade-deal-takes-effect/2001278, (Access Date: 04.10.2025).
[ii] “India-European Free Trade Agreement to come into force from 1st Oct”, Newsonair, https://www.newsonair.gov.in/india-efta-trade-agreement-tepa-to-take-effect-from-oct-1/, (Access Date: 04.10.2025).
[iii] Isabel Marques da Silva, “EU and India seek closer relations in shadow of Russia”, Euronews, https://www.euronews.com/my-europe/2025/09/30/eu-and-india-seek-closer-relations-in-shadow-of-russia, (Access Date: 04.10.2025).
[iv] “MID Indii Zayavil o Stremlenii k Ukrepleniyu Svyazey s Rossiyey vo Vsekh Sferakh”, TASS, https://tass.ru/mezhdunarodnaya-panorama/25244503, (Access Date: 04.10.2025).
[v] “Kreml ne Verit v Vozmozhnost Otkaza Indii ot Rossiyskoy Nefti”, Interfax, https://www.interfax.ru/russia/1050589, (Access Date: 04.10.2025).
[vi] “Rossiya Sobralas Svobodno Torgovat Chipami s Indiyey. Vlasti Ekstrenno Sobirayut Mneniye IT-otrasli”, CNews, https://www.cnews.ru/news/top/2025-10-02_rossiya_hochet_svobodno_torgovat, (Access Date: 04.10.2025).
[vii] Bob Savic, “BRICS making incremental progress in dollar-free trade”, GIS, https://www.gisreportsonline.com/r/brics-payment-system, (Access Date: 04.10.2025).
[viii] “Eks-deputat YEP Shoprad: RF nakhoditsya na peredovoy bor’by za mnogopolyarnyy mir”, TASS, https://tass.ru/politika/25249467, (Access Date: 04.10.2025).
[ix] Nicholas Lua, Yongchang Chin ve Rakesh Sharma, “India Looks for First US LPG Cargoes as Trade War Diverts Flows”, Bloomberg, https://www.bloomberg.com/news/articles/2025-10-03/india-looks-for-first-us-lpg-cargoes-as-trade-war-diverts-flows, (Access Date: 04.10.2025).
