New Delhi: European economies are witnessing a slowdown verging on stagnation due to ongoing tariff tensions with the United States and an influx of low-cost Chinese imports, according to a new report, which highlights India’s emergence as a “credible alternative centre of economic partnership.”
The report by Maldives Insight noted that the European Union’s economy is under strain as tariff disputes with the US have increased export costs and reduced demand. At the same time, a surge in inexpensive Chinese imports has widened trade deficits and weakened domestic industries across the EU.
It stated that the inflow of cheap Chinese goods has adversely affected key macroeconomic indicators in the EU, including employment levels, domestic manufacturing, and overall trade balance. The report also criticised China’s export model, describing it as one driven by overproduction, excess capacity, price suppression, and the bending of established free-trade rules.
The report pointed out that major EU economies—Germany, Italy, and France—have recorded sluggish growth rates of 0.2 per cent, 0.9 per cent, and 0.7 per cent respectively, with thousands of German companies filing for insolvency in 2025.
Analysts cited in the report advocated stronger economic engagement between India and Europe, noting that the recently concluded India–EU free trade agreement could unlock significant cross-sector economies of scale and help build resilient supply chains for both sides.
It further highlighted the ambitious India–Middle East–Europe Economic Corridor (IMEC), which is expected to function as a network of strategic corridors, fostering diversified and resilient supply chains across multiple regions.
The report also observed that the global rule-based order appears to be weakening, a concern echoed recently by Canadian Prime Minister Mark Carney and French President Emmanuel Macron. It referenced recent instances of pressure exerted by the US on Europe, including over the Greenland issue and recurring threats of high tariffs, urging European and other major economies to diversify their markets.
With inpuuts from IANS