No Longer Just a Ceremony

India will mark the 77th anniversary of the adoption of the Constitution, celebrating the Republic Day on January 26. It is a tribute to the day India’s Constitution came into force on January 26, 1950. This year, the European Commission President Ursula von der Leyen and European Council President António Costa will be the chief guests at India’s Republic Day parade. Political analysts say that the practice of inviting a chief guest at the parade in New Delhi has become a form of symbolic diplomacy, through which India has been signalling its strategic intention to reinforce its partnerships and deal with global uncertainties. However, the pomp and ceremony of Republic Day seem to have acquired significantly greater diplomatic weight since Narendra Modi took over as Prime Minister in 2014. Since then, US President Barack Obama (2015), French President Francois Hollande (2016), Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan (2017), Asean leaders (2018), South African President Cyril Ramaphosa (2019), Brazilian President Jair Bolsonaro (2020), Egyptian President Abdel Fattah El-Sisi (2023), French President Emmanuel Macron (2024), and Indonesian President Prabowo Subianto (2025) have graced the occasion. Significantly, no leaders from Russia and China – India’s largest defence and import partners – were invited to grace the event.

The participation of the top two European leaders during India’s Republic Day celebration is expected to coincide with the 16th India–EU Summit, where discussions are likely to centre on the proposed Free Trade Agreement (FTA), with both sides aiming to push the long-pending deal towards conclusion at the earliest. The European Union is expected to formalise its largest-ever trade deal with India on 27 January. The timing and scope of the deal highlight both the urgency in Brussels and the political constraints that continue to shape EU–India trade relations. According to Business Line, the deal may exclude agriculture.

European Commission President Ursula von der Leyen said in a speech at the World Economic Forum in Davos on Tuesday, “... we are on the cusp of a historic trade agreement. Some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP”. Addressing the European Parliament, the EU’s High Representative for Foreign Affairs and Security Policy, Kaja Kallas, said India is becoming “indispensable” for Europe’s economic resilience and signalled that the EU is ready to deliver on a powerful new agenda with New Delhi spanning trade, security, technology and people-to-people ties.

Meanwhile, the EU lawmakers voted to challenge the European Union’s contentious free trade agreement, signed last week, with South America in the bloc’s top court, a move that could delay the deal by two years and potentially derail it. This is the first major trade agreement for Mercosur, which includes the region’s two biggest economies, Brazil and Argentina, along with Paraguay and Uruguay. The “historic” EU-Mercosur trade deal was expected to create one of the world’s largest free trade areas. Farmers across Europe protested against the deal.

Geopolitical compulsions bring Europe and India closer

Unlike the Indo-USA joint declaration on February 13, 2025, which aimed to negotiate within a year, a multi-sector Bilateral Trade Agreement (BTA) by autumn 2025, the India–European Union trade negotiations began two decades ago in 2007. As the India-USA BTA failed to take off and the White House has become impatient with Commerce Secretary Howard Lutnick referring to ‘Trump’s staircase model of deal-making’, where delays are punished, India is compelled to look for an alternative market in the EU to compensate for its shrinking market in the USA.

The India-EU FTA is expected to offer access to a large, stable market across 27 EU countries, an alternative market for Indian labour-intensive industries hit by US tariffs like textiles, jewellery, leather goods, etc., and provide an alternative market for Indian IT/services exports and movement of skilled professionals, reducing heavy reliance on the US. On the other hand, the EU is expected to benefit from an expanded market access via the reduction or elimination of tariffs to a rapidly growing Indian market, diversified supply chains by funnelling investments to develop alternative manufacturing sites for electronics and renewable energy components in India.

However, India is still trying to revive the stalled negotiation. Indian Commerce and Industry Minister Piyush Goyal, on January 19, 2026, met the U.S. Ambassador to India, Sergio Gor, and American Senator Steve Daines and discussed bilateral issues. The meeting is important as India and the U.S. are engaged in negotiating a bilateral trade agreement amidst a steep 50 per cent import duty imposed by the Donald Trump administration on Indian goods since August.

During the last year, since Donald Trump became the US President for the second term in January 2025 and initiated his ‘global tariff war’, global trade and investment is passing through a state of turmoil and uncertainty. USA’s long-trusted allies, including Europe, Japan, South Korea, and India, faced steep import tariffs – the so-called ‘reciprocal tariff. Unlawful invasion of Venezuela and Trump’s threat to capture Greenland from Denmark have shattered the post-WW2 rule-based world order. The USA’s trusted allies, the EU and NATO, were devastated.

A new poll of 25,949 respondents across 21 countries conducted in November 2025 for the European Council for Foreign Relations (ECFR) and Oxford University’s ‘Europe in a Changing World’ research project, reveals: “the West” seems to be a spent geopolitical force for the foreseeable future. America’s traditional enemies fear it less than they once did—while allies now worry about falling victim to a predatory US. According to the survey, this splitting of the West is most visible in Europe, and in what others think of Europe. Russians now regard the EU as more of an enemy than they do the US, and Ukrainians look more to Brussels than to Washington for succour. Most Europeans no longer consider America a reliable ally, and they are keen to rearm. Even before Trump’s dramatic intervention in Venezuela and threat to occupy Greenland, his aggressive “America First” approach was driving people closer to China. Paradoxically, his disavowal of the liberal international order may have given people licence to build stronger links to Beijing, since they no longer feel the need to fall in line with a US-led alliance system, the study concludes.

French President Emmanuel Macron has urged on Tuesday for more Chinese investment in key sectors in Europe. Speaking at the World Economic Forum on Tuesday, Macron said that “China is welcome, but what we need is more Chinese foreign direct investment in Europe in some key sectors to contribute to our growth.” Meanwhile, highlighting India’s importance to the USA, the influential Foreign Affairs commented, America must salvage its relationship with India or risk losing a global swing state. Trump declined to sign a trade deal with India and imposed draconian tariffs on its United States–bound exports, and in August, he called the country a “dead economy.” Indian Prime Minister Narendra Modi, in turn, travelled to China—his first visit there in seven years—and appeared clasping hands with China’s and Russia’s leaders. This prompted Trump to conclude that the United States had “lost India.” The relationship between India and the United States is not quite lost. But it is teetering badly, and if U.S. officials want to fix it, they will need to move quickly.

Moneycontrol reported that India is considering a significant rethink of its post-2020, China-focused curbs on foreign investment and government procurement, with the emphasis shifting towards economic impact rather than nationality. “Policy needs to reflect India’s growth ambitions. Investment that generates meaningful employment and technology transfer should be treated on its merits, not on the investor.” The report said that discussions had taken place on both Press Note 3 and government procurement norms, with a view to attracting more capital into non-strategic sectors while safeguarding national interests.

Meanwhile, Russian Foreign Minister Sergey Lavrov on Tuesday (January 20th) lauded Moscow’s bilateral ties with Delhi and Beijing and called for reactivating the Russia-India-China (RIC) axis, asserting that multi-polarity is “here to stay”.

On the purchase of sanctioned crude oil from Russia and Venezuela, India made a few hasty decisions that could have been avoided. Reuters reported that after the invasion of Venezuela by the USA in January 2025, an Indian refiner (Reliance) expressed interest in buying Venezuelan crude if sales to non-US buyers were permitted. Reliance imported 63,000 bpd from Venezuela under US licenses in the first four months of 2025. It is also reported that Reliance Industries Ltd, is set to receive sanctions-compliant Russian oil in February and March after a one-month pause. Reliance last received Russian crude in December after securing a one-month U.S. concession that allowed it to wind down dealings with the sanctioned Russian oil producer Rosneft beyond a November 21 deadline. India’s purchase of sanctioned Russian oil led to a serious trade dispute with the USA, which led to the imposition of hefty tariffs on Indian exports to the USA.

Need for a resilient foreign trade and investment policy

On Wednesday, the rupee plunged to an all-time low of 91.64 against the US dollar due to persistent foreign fund outflow amid heightened uncertainty in global markets. This steep depreciation has occurred when the USD itself is weakening against the basket of other major global currencies. Nevertheless, as of 2025, India has 13 active free trade agreements (FTAs). India’s merchandise trade deficit for the full fiscal year (April 2024-March 2025) 2024-25 was around USD 282.83 billion, a rise from the previous year, driven by higher imports. Merchandise trade deficit during April-December 2025 was USD 248.32 Billion as compared to USD 223.96 Billion during April-December 2024 notwithstanding India has received an all-time high in remittance inflows, receiving USD 135.46 billion in FY25 Even seventy-six years after the Republic was born., remittance of skilled and semi-skilled workers, engaged in various countries as migrants, is the main source of foreign exchange for India.

India’s foreign trade and investment policy must get rid of the “Aaya Ram, Gaya Ram” (“Ram has come, Ram has gone”) syndrome, coined in 1967, which symbolises the phenomenon of frequent floor-crossing and political defections by elected officials. It was that year, a Haryana MLA, Gaya Lal, changed his party affiliation three times within a single fortnight (specifically, twice in one day), moving from Congress to the United Front, back to Congress, and then back to the United Front again. Though it originated in domestic Indian politics to describe opportunism, its usage may be extended, metaphorically, to refer to a non-ideological, opportunistic, and mercurial approach to international relations.

A “Aaya Ram, Gaya Ram” foreign policy implies switching between different global power blocs (e.g., shifting from a pro-Western to a pro-Russian or pro-Chinese stance) based purely on immediate, transactional benefits, such as securing economic, energy, military, or diplomatic, rather than strategic, long-term partnerships. Such a foreign policy is characterised by sudden, unexpected, and frequent changes in diplomatic positions, making the country an unpredictable international actor. The purchases of Russian and Venezuelan crude by India, at a discounted price, are cases in point.

India, once considered the leader of the global south, must follow a long-term foreign policy doctrine centred on Non-Alignment and Peaceful Coexistence.