India is walking a diplomatic and trade tightrope as the United States and European countries edge towards a tariff war over the Greenland dispute, with trade experts urging caution to protect Indian exporters. While some analysts warn that, going by past precedent under US President Donald Trump, Washington could slap fresh tariffs on major European trading partners, others believe the standoff could open opportunities for India to deepen its footprint in European markets.
“The political tussle over Greenland could spill over into other areas in very different ways. It could result in a significant shift in the EU’s position on trade and WTO issues vis-à-vis the US,” said a former head of the Centre for WTO Studies at the Indian Institute of Foreign Trade (IIFT). India signed a free trade agreement (FTA) with the UK last year and is expected to conclude an FTA with the European Union in the near future.
Trump has announced a fresh 10% tariff on countries opposing his move to acquire Greenland. The US plans to impose tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland, despite trade deals signed in 2025. “There could be pressure on countries to reduce trade with the EU, failing which the US may impose punitive tariffs on them,” said Das, commenting on the potential implications for India.
India, meanwhile, is maintaining a diplomatically neutral stance. A government source confirmed that no immediate decisions are being taken and that trade negotiations with both the EU and the US will continue. “We are closely observing the situation,” the official said.
Some trade experts argue that escalating US–Europe tensions could offer a strategic opening for India, provided it manages its negotiations carefully. “The friction between the US and the EU is also pushing the EU to conclude its FTA with India,” said Rajan Sudesh Ratna, deputy head and senior economic affairs officer at the UN Economic and Social Commission for Asia.
Krishan Arora, partner at Grant Thornton Bharat, said the tensions could prompt European consumers to seek alternatives to US suppliers. “European demand may increasingly turn to India to fill the gap. Demand for Indian goods is expected to rise further, especially as more FTAs come into effect,” he said.