Modi's geo-economic pivot: implications for Pakistan

Europe's new courtship of India is not just another trade story; it is a signal of how power is being reorganised in a world of fractured globalisation. By anchoring India into emerging connectivity corridors that link South Asia, the Middle East and Europe, the EU is betting on New Delhi as a strategic counterweight in an increasingly polarised global economy. For India, the payoff is more than market access. It is recognition as a pivotal node in the next phase of geopolitical competition, where infrastructure, standards and supply chains matter as much as military alliances.

This European outreach has also led President Trump to ease recently placed tariffs on a range of Indian exports. Taken together, the EU India deal and the US tariff easing signal a broader Western recalibration toward India as a preferred partner in an era of strategic derisking from China.

For Narendra Modi, the timing could hardly be more fortuitous. Only months ago, his political aura of inevitability dimmed. His party lost its outright majority, forcing him into coalition politics at home, while inflation and job anxieties eroded support among urban and rural voters alike. Trade frictions with the United States had complicated India's external economic narrative. The US tariff cut, paired with the EU-India partnership, now offers Modi a narrative reset. It allows him to claim that despite domestic headwinds, India's global standing is rising and that major Western powers view New Delhi as indispensable to the future of global commerce.

Yet, despite this Western embrace, India's unfolding political project remains anchored in majoritarianism and intimidation of religious minorities, especially Muslims. While some of the most provocative cultural initiatives appear tactically paused, the broader project of Hindutva politics has not been reversed. However, India's geo-economic clout increasingly eclipses concerns over its domestic human rights record.

For Pakistan, the convergence of Western economic and strategic overtures toward India should prompt a sober reassessment. Relations with India remain frozen over Kashmir, and renewed strains around the Indus Waters Treaty have added another layer of volatility to an already brittle relationship. Islamabad's efforts to rebalance ties with Washington have not yielded comparable economic dividends.

With tariff relief from the United States and deeper integration into European supply chains, India is trying to position itself as both a manufacturing platform and a logistical bridge across regions. Pakistan has also sought to leverage its own geo-economic potential, but such efforts have thus far delivered underwhelming results. While CPEC has brought much-needed infrastructure, it has also deepened Pakistan's debt burden and, more importantly, has yet to generate the dividends of sustained integration into regional and global value chains.

As major powers reconfigure supply chains around trusted corridors, Pakistan must extend CPEC outward by linking it to Central Asia, the Gulf, and broader maritime trade routes. The long-term viability of Gwadar port, however, hinges on addressing grievances in Balochistan, where concerns over resource control, political marginalisation and state repression have repeatedly disrupted projects and eroded investor confidence. Foreign investment should remain a priority for Pakistan, but it must be directed to provide real economic relief to citizens, not merely enrich the ruling elite.

Pakistan needs to pay more attention to integrating itself within regional and global supply chains and it must work harder to capitalise on increased market access by expanding its exports. Promoting productivity and inclusive growth is also a security imperative for Pakistan, since growing imbalances with India threaten its strategic standing and long-term security.