From Aid and Trade to Partnership-based industrial policy: How the EU–India Partnership Points Towards a New Model of International Cooperation

Author: Julius MURKE

Europe's relationship with the Global Majority is changing. The EU–India strategic partnership offers a concrete illustration of what this transformation could look like: moving beyond traditional trade liberalisation and development assistance towards jointly developing technologies, investing in strategic industries and building shared economic capabilities.

In several previous editions of World.OS, I have argued that international cooperation is entering a new era. As geoeconomics becomes increasingly important, economic security, industrial competitiveness and technological sovereignty are becoming central objectives of international cooperation. I have also argued that Europe cannot achieve these objectives alone.

What I call partnership-based industrial policy is an approach that places international partnerships at the centre of industrial strategy. Rather than developing technologies and industrial capabilities independently and subsequently looking for markets abroad, countries identify shared strategic interests, combine their respective strengths and invest in developing technological and industrial capabilities together.

Until recently, this has largely been a conceptual argument. The emerging EU–India cooperation agenda now provides a concrete illustration of how such an approach can work in practice.

The Joint Comprehensive Strategic Agenda Towards 2030 , adopted at the EU–India Summit in January 2026, and the subsequent third meeting of the EU–India Trade and Technology Council  in July 2026, establish a framework that connects economic security, industrial development, research, investment and technological cooperation.

The agenda goes beyond the traditional objectives of international economic cooperation. It identifies specific technologies and industrial value chains in which India and Europe intend to develop capabilities together. It combines research cooperation with industrial investment, connects European and Indian innovation ecosystems, and seeks to make digital public infrastructure interoperable.

Importantly, these are not merely abstract declarations of partnership. Several initiatives are already being translated into joint research programmes, dedicated innovation platforms and concrete technological development projects.

This is precisely the kind of transformation that I have been discussing in World.OS: international cooperation that is no longer primarily organised around transferring resources or technologies from one part of the world to another, but around building shared economic and technological capabilities.

1. From trade liberalisation and development assistance to partnership-based industrial policy

Traditionally, economic cooperation between Europe and countries of the Global Majority has been organised around two broad approaches.

The first is trade liberalisation. The underlying assumption is that reducing tariffs and other barriers to trade allows countries to specialise according to their comparative advantages. Companies respond to market opportunities, investment flows across borders and economic integration generates mutual benefits.

The second is development cooperation. European governments and institutions finance projects that contribute to economic development, infrastructure, institutional capacity or public service delivery in partner countries. Although modern development cooperation is increasingly based on national ownership and joint decision-making, its financing structures often retain a distinction between the country providing resources and the country receiving support.

Both approaches remain relevant. However, neither necessarily creates the institutional framework required for countries to develop new strategic industries together.

Trade liberalisation can improve market access without guaranteeing that the industrial capabilities needed to benefit from that access will emerge. Development cooperation can strengthen institutions and infrastructure without necessarily creating technologies or industrial assets that both partners subsequently use.

Partnership-based industrial policy introduces a different organising principle.

The starting point is not simply how countries can trade more efficiently or how Europe can support development elsewhere. It is the identification of specific technological and industrial capabilities that partners have a shared interest in developing.

This requires cooperation across several dimensions simultaneously: research and development, industrial investment, technological infrastructure, standards, skills, supply chains and access to markets.

Crucially, it also recognises that each partner contributes different capabilities. Cooperation is not conceived as a one-way transfer of technologies and expertise from Europe to another country.

This was the central argument of my earlier article, International Technology Development Partnerships – Toward a Partnership-Based Industrial Policy in a Multipolar World .

The EU–India agenda translates several elements of this idea into a concrete international cooperation framework.

It does not abandon traditional trade policy. The free trade agreement remains an important component of the relationship. Rather, the strategic agenda adds an industrial dimension: it connects market access with deliberate efforts to develop technologies, mobilise investment and establish industrial capabilities in selected sectors.

The fundamental distinction is between creating the conditions in which industrial cooperation might emerge and deliberately organising cooperation around the development of specific industries.

2. Why digital technologies are at the centre of the partnership

The particular emphasis on digital technologies is no coincidence.

India has developed substantial capabilities in software engineering, digital services, semiconductor design and large-scale digital public infrastructure. Its experience with digital identity, digital payments and the provision of digital public services makes it a particularly relevant partner for countries seeking to modernise their digital economies and public administrations.

Europe brings complementary capabilities, including industrial research infrastructure, advanced semiconductor equipment, manufacturing expertise, regulatory experience and substantial research and innovation programmes.

The joint strategic agenda explicitly identifies this complementarity. For example, its semiconductor cooperation objectives refer to combining Indian design strengths with European research infrastructure.

However, India's technological capabilities explain only one side of the partnership.

The other is Europe's own strategic need.

In my earlier article, The End of Development and the Beginning of Economic Security , I argued that economic security is becoming an organising principle of international cooperation.

The EU's economic security agenda (European economic security - Consilium) reflects concerns about technological dependencies, vulnerable supply chains and the concentration of strategically important capabilities outside Europe. Its approach combines three pillars: promoting European competitiveness, protecting against economic security risks and partnering with other countries to address shared interests.

The EU–India partnership puts this third pillar into practice.

Europe needs access to technological capabilities, innovation ecosystems, skilled professionals, markets and investment opportunities that extend beyond its own borders.

India, for its part, has an interest in expanding its industrial capabilities, strengthening its position in advanced technologies, attracting investment and accessing European research infrastructure and markets.

The partnership therefore reflects a convergence of strategic interests rather than a relationship organised primarily around one partner's development needs.

This is especially important for understanding the changing role of countries of the Global Majority in Europe's economic strategy.

India is not simply a market for European technologies or a destination for European investment. It is a potential co-developer of the technologies, industrial capabilities and digital infrastructure that Europe itself needs.

3. What the partnership actually entails: Five concrete areas of cooperation

The distinctive feature of the EU–India agenda is the combination of several complementary instruments. It links technological development, infrastructure interoperability, research funding, industrial investment and market integration within a common strategic framework.

The following areas show what that means in practice.

Digital identity: Connecting digital public infrastructure rather than simply exporting it

One of the most interesting elements of the partnership concerns digital public infrastructure.

India has developed a large-scale digital ecosystem that includes Aadhaar-based identity services, the Unified Payments Interface and DigiLocker, which enables users to access and share digital documents.

Europe is developing its own digital public infrastructure, including the European Digital Identity Wallet.

The joint strategic agenda commits both partners to exploring technical interoperability between their digital wallets. At the July 2026 Trade and Technology Council meeting, the two sides agreed to advance technical discussions and explore a pilot linking the European Digital Identity Wallet with India's DigiLocker, based on jointly agreed use cases. They are also working on the interoperability and potential mutual recognition of electronic signatures.

This is a very different approach from the traditional model of financing the deployment of a digital solution in a partner country.

Here, both sides have already developed digital infrastructure. The objective is to connect these systems so that individuals and businesses can use digital credentials and trusted electronic documents across jurisdictions.

For example, interoperable digital wallets could eventually make it easier for individuals to present recognised credentials when travelling, studying or working abroad. Businesses could benefit from simpler cross-border verification and administrative procedures.

The interoperability is still being explored; these cross-border capabilities should not be mistaken for services that are already universally available.

Nevertheless, the strategic significance extends beyond administrative convenience.

Digital identity and trusted digital credentials are foundational components of digital public infrastructure. They enable a wide range of services, including digital transactions, public administration and the exchange of verified information.

Developing interoperability can therefore create a shared foundation on which companies and public institutions from both regions can build new services.

The strategic agenda also envisages cooperation on the deployment of joint digital public infrastructure solutions in third countries.

This introduces an additional dimension: Europe and India could jointly develop interoperable digital solutions and subsequently cooperate with other countries in adapting and deploying them.

The relationship is no longer simply between a technology provider and a technology recipient. It becomes a partnership capable of developing technologies and making them available to a wider international ecosystem.

Semiconductors: Jointly developing strategic technological capabilities

Semiconductors provide an even clearer example of partnership-based industrial policy.

The joint agenda goes beyond general commitments to research cooperation or supply-chain diversification.

It identifies specific activities, including semiconductor design, prototyping for artificial intelligence applications, advanced packaging, manufacturing technologies, reciprocal talent exchanges and collaboration between research infrastructures.

The July 2026 TTC statement adds an important operational dimension: the partners intend to explore collaboration between semiconductor design facilities under the India Semiconductor Mission and European pilot lines established under the EU Chips Act.

This could give participating researchers and companies access to design tools, technological platforms and cost-effective silicon prototyping opportunities across the two ecosystems.

The important point is that this partnership aims to develop technological capabilities rather than merely facilitate the import and export of semiconductors.

Instead of approaching supply-chain resilience exclusively through efforts to relocate production, Europe and India are exploring how their research, design and manufacturing capabilities can complement one another.

This is directly connected to the logic of economic security.

A more diversified and interconnected technological ecosystem can reduce exposure to concentrated supply chains while giving both partners opportunities to strengthen their domestic industries.

Whether these commitments lead to substantial new industrial capacity will depend on the investments and projects that follow. The agenda establishes the framework, but it does not itself guarantee the creation of new semiconductor manufacturing facilities.

Artificial intelligence and computing: Building capabilities across the technology stack

The cooperation agenda also covers artificial intelligence, high-performance computing and quantum technologies.

The partners intend to collaborate on large language models, multilingual datasets, AI applications in healthcare and agriculture, and the development and evaluation of trustworthy AI systems.

Their high-performance computing cooperation envisages reciprocal access to computing facilities, co-developed applications, researcher exchanges, joint doctoral programmes and co-funding arrangements.

The July TTC meeting also identified a coordinated research project involving applications in natural hazards, climate change and bioinformatics, while the two sides agreed to explore a joint AI roadmap.

This reflects an important characteristic of advanced digital technologies.

Building competitive AI capabilities is not only a question of developing algorithms. It also requires computing infrastructure, access to data, specialised skills, research institutions, applications and markets.

Consequently, international AI cooperation can involve several layers of technological development simultaneously.

Europe and India are exploring cooperation across these different layers rather than treating AI primarily as a product to be exported or imported.

Joint research, innovation and investment: From cooperation agreements to common projects

The partnership also offers concrete examples of how joint technological development can be organised and financed.

In July 2026, the EU and India agreed to move towards formal negotiations on India's association with Horizon Europe, with the objective of concluding negotiations before the end of 2026.

Association would allow Indian researchers and institutions to participate more extensively in European collaborative research programmes under the applicable arrangements.

This is significant because research cooperation would no longer depend solely on individual bilateral projects. It could become part of a more durable institutional framework connecting universities, research organisations and companies across both regions.

There are also already concrete examples of jointly financed research.

The July TTC statement reports that the EU and India agreed in 2025 on a combined investment of €60 million over four years for collaborative research through three coordinated Horizon Europe calls.

The research areas include waste-to-hydrogen technologies, marine pollution and electric-vehicle battery recycling. The statement identifies several selected collaborative projects, including research using advanced sensors and AI-based models to study marine pollution.

These projects demonstrate how the partnership can move beyond knowledge exchange towards jointly financing the development of technologies addressing shared challenges.

Another instrument is the planned establishment of EU–India Innovation Hubs.

The first announced hub will focus on electric-vehicle charging technologies and testing. It will connect the European Commission's Joint Research Centre and the Automotive Research Association of India, bringing together research capacity, testing infrastructure, standards expertise and startup ecosystems.

Such cooperation connects research with the practical requirements of industrial development.

Developing electric-vehicle charging technologies is not only a question of scientific innovation. It also requires testing facilities, common technical standards, industrial partners and conditions that allow new technologies to reach the market.

The innovation hub is intended to connect these elements across the two regions.

Strategic value chains: Moving towards joint industrial development

The EU–India strategic agenda identifies Blue Valleys as a framework for strengthening selected strategic value chains through investment facilitation, standards alignment and structured cooperation between businesses.

At the July TTC meeting, both partners agreed to explore a dedicated platform for this initiative, with the aim of developing sector-specific industrial clusters bringing together regulators, companies, startups and other stakeholders.

This is particularly interesting because it addresses a limitation of cooperation based primarily on trade liberalisation.

A free trade agreement can reduce the barriers faced by companies seeking to enter each other's markets. It cannot, by itself, coordinate the creation of the industrial ecosystems required to develop and manufacture new technologies.

Industrial clusters, by contrast, can bring together research institutions, specialised suppliers, investors, companies and public authorities to develop capabilities in specific sectors.

The proposed Blue Valleys initiative aims to connect this industrial-development logic across the EU and India.

It is still at an exploratory stage, and the actual investment structures, industrial projects and distribution of activities remain to be determined.

Nevertheless, its inclusion in the strategic agenda illustrates how the relationship is expanding from facilitating trade towards deliberately building industrial capabilities together.

4. Economic security through partnership rather than isolation

The EU–India agenda is clearly an expression of Europe's economic security strategy.

It addresses several of the risks identified in that strategy: concentrated supply chains, dependencies in advanced technologies, access to critical inputs and vulnerabilities in digital infrastructure.

However, its instruments are not limited to defensive measures.

Export controls, investment screening and restrictions on sensitive technology transfers seek to manage exposure to specific risks. Cooperation on research, technological development and investment can address economic security from another direction: by creating additional capabilities and alternative supply relationships.

The two approaches are not mutually exclusive. Indeed, the EU–India strategic agenda also explicitly addresses research security and the protection of sensitive technologies.

What makes the partnership particularly relevant to my arguments I put forth in World.OS is that it treats international cooperation as an instrument for developing the capabilities on which economic security depends.

Europe is not simply attempting to reduce its exposure to external actors. It is cooperating with another major economy to expand the technological and industrial capabilities available to both.

This is an important distinction.

Technological sovereignty does not necessarily require national or regional self-sufficiency. In many sectors, it can also be strengthened through diversified supply chains, interoperable systems, shared research infrastructure and access to alternative technological ecosystems.

This was the argument I developed in International Technology Development Partnerships : technological sovereignty can be understood as the ability to maintain strategic choices and exercise control over critical capabilities without having to produce every component independently.

The EU–India partnership provides a practical setting in which to examine this proposition.

It also shows how economic security and international cooperation can become mutually reinforcing policy objectives rather than competing agendas.

5. Can the India model become a broader approach to cooperation with the Global Majority?

India's size, technological capabilities and industrial ambitions give it a particular position in the global economy. Not every country in the Global Majority can contribute to advanced semiconductor development or AI research in the same way.

The EU–India agenda should therefore not be treated as a ready-made template that can simply be replicated elsewhere.

Its broader relevance lies in the underlying logic of cooperation.

The starting point is the identification of shared strategic objectives and complementary capabilities, followed by the development of a partnership that connects research, investment, infrastructure, industrial development and markets.

The specific technologies and instruments will necessarily differ from one partner to another.

With some countries, the focus might be on critical minerals, industrial processing and battery supply chains. With others, it might involve pharmaceutical manufacturing, renewable energy technologies, digital public infrastructure or advanced industrial software.

Countries with smaller economies may contribute specialised research capabilities, particular industrial expertise, implementation experience or innovative technological solutions that address challenges also faced in Europe.

This is where the India partnership becomes particularly relevant to the future of international cooperation.

It offers a framework in which countries are approached not primarily according to their income classification or development needs, but according to the specific capabilities and strategic interests they bring to a relationship.

However, moving from a promising bilateral agenda towards a broader transformation of EU cooperation requires addressing several unresolved challenges.

6. What still needs to change?

International partnerships need a more central role in European industrial policy

There is an important tension between the EU–India strategic agenda and Europe's internal technological sovereignty agenda.

The India partnership explicitly identifies international cooperation as a way to develop technological and industrial capabilities.

By contrast, the European Technological Sovereignty Package presented in June 2026 focuses primarily on strengthening capabilities within Europe.

Its measures include Chips Act 2.0, the Cloud and AI Development Act, the EU Open Source Strategy and a roadmap for digitalisation and AI in the energy sector. Their principal objectives include expanding European semiconductor production, strengthening cloud and computing infrastructure, developing European technological ecosystems and reducing dependencies on external providers.

In my previous article, Will We See New European Global Tech Giants Within the Next Five Years? , I examined this gap between Europe's domestic industrial ambitions and its international technology partnerships.

The technological sovereignty package does recognise the role of international cooperation. Yet its main instruments are organised around what Europe intends to develop, finance and deploy internally. Partnership remains largely a supporting element rather than an organising principle of its industrial strategy.

The contrast with the EU–India agenda is revealing.

On the one hand, Europe is establishing a strategic partnership to jointly develop advanced technologies, connect digital infrastructure and strengthen industrial value chains.

On the other hand, its internal industrial policy remains principally structured around strengthening European technological and industrial capacity.

Whether partnership-based industrial policy can become a durable approach will depend on how closely these two agendas are connected.

For example, cooperation between European semiconductor pilot lines and Indian design facilities could become a meaningful component of European semiconductor policy rather than remaining a separate bilateral initiative.

Similarly, Europe's investments in open-source technologies, digital public infrastructure and AI could be designed to facilitate joint development with international partners from the beginning, where their contributions and strategic interests align.

A stronger connection would also create opportunities to combine the objectives of Europe's internal technological sovereignty agenda with instruments such as Global Gateway.

Instead of treating international cooperation primarily as a means of financing connectivity or deploying technologies abroad, the two policy areas could support the development of shared technologies and industrial capabilities.

The EU–India partnership illustrates how this connection could work. Its long-term significance will depend partly on whether the cooperation is reflected in the actual design, financing and implementation of European industrial policy.

Partnership requires moving beyond inherited assumptions about the Global Majority

A second challenge concerns the way European institutions understand the countries with which they cooperate.

In Colonial Thinking Is a Strategic Liability , I argued that inherited assumptions about the direction of technological development can prevent European institutions from recognising capabilities emerging in countries of the Global Majority.

The problem is not that contemporary international cooperation has remained unchanged since the colonial era. National ownership, participation and partner-led implementation have become increasingly important features of development cooperation.

The more subtle problem concerns the roles that different countries are expected to play.

European institutions are accustomed to imagining European technologies being transferred to partner countries. They can find it more difficult to recognise that technologies developed through cooperation in Africa, Asia or Latin America might also contribute to Europe's own economic and technological objectives.

The India partnership provides a useful contrast.

India's technological capabilities are explicitly recognised as assets from which Europe can benefit. The partnership is designed around combining Indian and European strengths rather than assuming that technological expertise flows primarily in one direction.

The same principle has implications for cooperation with countries whose technological capabilities are less immediately visible to European policymakers.

A country can face considerable development challenges while also possessing excellent engineers, innovative companies, specialised research institutions or public-sector technologies with international applications.

Recognising these capabilities does not imply abandoning poverty reduction or other development objectives. It means avoiding the assumption that development needs exhaust the potential of a country's relationship with Europe.

For partnership-based industrial policy to extend beyond relationships with major economies such as India, the capabilities of other partner countries will need to be identified and assessed on their merits.

This also has implications for the governance of cooperation.

A partnership based on joint technological development requires meaningful participation in defining objectives, determining investment priorities, establishing intellectual property arrangements and deciding how the resulting technologies and economic benefits will be shared.

Co-development is not simply a new label for European institutions financing projects that have already been designed in Europe.

It requires a genuine negotiation of shared interests and complementary contributions.

The agenda still needs to translate commitments into industrial outcomes

The third challenge is implementation.

The EU–India partnership contains a substantial number of specific commitments, and some joint activities are already underway. Nevertheless, much of the wider agenda remains at the stage of planned initiatives, negotiations or exploratory cooperation.

The joint strategic agenda explicitly states that it does not itself create financial commitments or legally binding obligations.

Consequently, the existence of a comprehensive agenda does not automatically establish the investment volumes, governance arrangements or industrial capabilities required to realise its objectives.

The transition from strategic cooperation to partnership-based industrial policy will become more tangible as individual initiatives move towards financing agreements, operational research platforms, commercial investment decisions and functioning industrial partnerships.

The Blue Valleys initiative, semiconductor collaboration and joint AI programmes will be particularly relevant areas in which to observe this process.

Questions of governance and the allocation of economic benefits will also become more significant as cooperation moves from research to commercialisation.

The development of a jointly financed technology, for example, raises practical questions about intellectual property, manufacturing locations, market access and the distribution of returns from public investment.

Addressing these questions will determine whether the partnership creates technological and industrial capabilities that benefit both economies.

Conclusion: From development cooperation to shared industrial development

The EU–India strategic agenda brings together several developments that I have discussed in previous World.OS articles.

It reflects the growing importance of economic security in international cooperation. It recognises that technological sovereignty can be pursued through partnerships rather than exclusively through national or regional self-sufficiency. And it illustrates how countries can cooperate in developing specific technologies and industrial capabilities rather than limiting their relationship to trade liberalisation or development assistance.

The emerging partnership is particularly interesting because it connects these elements within a single strategic framework.

Its digital public infrastructure agenda focuses on interoperability between existing systems. Its semiconductor and AI cooperation aims to combine complementary technological capabilities. Its research programmes include joint financing and co-development. Its proposed industrial clusters seek to connect investment, innovation and the development of strategic value chains.

Taken together, these initiatives illustrate the practical meaning of partnership-based industrial policy.

They also point towards a broader change in how Europe can understand its relationships with countries of the Global Majority.

The traditional distinction between countries that develop and provide technologies and countries that receive and adopt them is becoming less useful for organising cooperation in a world of increasingly distributed technological and industrial capabilities.

The more relevant question is where countries have shared strategic interests, what capabilities each can contribute and which technologies or industries they can develop together.

India's technological capabilities make it a particularly visible partner in this transformation. But the underlying approach is not limited to India, nor is it limited to digital technologies.

Whether it becomes a broader model of international cooperation will depend on the integration of partnerships into European industrial policy, the recognition of technological capabilities across the Global Majority and the ability to turn joint strategic objectives into sustained investment and industrial development.

The EU–India agenda provides a concrete example of how this transformation is beginning to take institutional form.