India ostensibly has had two foreign policy successes this month. First, on 19th January, it signed a $3 billion LNG deal for 10 years with the UAE, along with a commitment to boost trade links and sign a defense agreement. Second, on 27th January, India and the European Union signed a Free Trade Agreement, dubbed as ‘mother of all deals’, along with a less hyped security and defense agreement.

Far from being a foreign policy success, these deals materialized because of increasingly uncertain geopolitical realities, not just for India, but the UAE and the European Union as well. The common denominator is, of course, the increasingly uncertain and erratic behavior of the Trump Administration 2.0 and the accelerated American decline, which has had a spillover effect across all regions. 

India was already attempting to diversify its security needs away from its long-standing reliance on Russia to procure arms from France, the United States, and Israel, and to build domestic resilience. At the same time, the 50% tariffs imposed by the Trump Administration on Indian goods, allegedly to punish India for purchasing Russian oil and fueling the Ukraine War, further strained India. New Delhi had to diversify both its energy and trade requirements amidst an increasingly unreliable U.S. 

In the last year, Prime Minister Modi has made strides to this end; India signed a Free Trade Agreement with the United Kingdom in May, finalized a $68 billion investment framework with Japan in August, even de-escalated tensions with China by attending the SCO Summit in September, and signed trade agreements with New Zealand and ‌Oman. It also sought to rekindle ties with Russia, and while President Putin was warmly welcomed, the visit did not procure any defense or oil deal. The U.S. pressure was noticeable, and it was evident that India needed new partners, but turning to the UAE or the European Union was not random; it was driven by geopolitical realities. 

Why UAE, and why now?
The UAE and India have deep economic ties with each other as significant trading partners, with trade volume amounting to $85 billion for FY 2022-3, topped only by trade between India and the US, which stood at $128 billion for FY 2022-3. Prior to this deal, the UAE was India’s fourth-largest supplier of crude oil, accounting for about 9-11% supply, with Russia topping the chart, supplying nearly 50% of India's oil imports. In 2022, both countries signed a Comprehensive Economic Partnership Agreement to boost trade and joined I2U2 – a strategic partnership between the UAE, US, India and Israel, ostensibly for economic development but part of the broader strategy to normalize Israel in the region. The recent oil and trade agreement, and the intent for a defense agreement, are not merely an evolution of these ties. 

In September 2025, Pakistan (arch-rival of India) signed a defense pact with Saudi Arabia (strategic regional rival of the UAE), mirroring NATO’s Article 5 collective security clause, but deliberately remained vague about whether this meant Pakistan’s nuclear umbrella would be extended to Saudi Arabia. This pact has led to two further significant developments. First, as stated by Pakistan’s Minister for Defense Production, a trilateral defense agreement involving Pakistan, Saudi Arabia and Turkey (also a UAE rival) is in the pipeline. Second, Pakistan has increased its arms exports to conflict-ridden areas in the MENA region. These deals are reportedly brokered by Saudi Arabia, and they are not just about expanding Pakistan’s military footprint. Saudi Arabia is involved in these conflicts, rivalling the UAE, so Pakistan is effectively providing military support to Saudi Arabia against the UAE. For example, as of January 9th, 2026, Pakistan was reportedly finalizing a $1.5 billion defense deal to supply weapons and jets to the Saudi-backed Sudanese Government, fighting the paramilitary Rapid Support Forces (RSF) (backed by the UAE, though the UAE officially denies involvement). Earlier in December 2025, Pakistan and Libya finalized a $4 billion defense deal, where, once again, both Saudi Arabia and the UAE have clashing interests. 

The main attraction of these defense deals is the jointly manufactured Sino-Pakistani JF-17 Thunder aircraft (among other weapons). These are battle-tested aircraft that ostensibly downed Indian jets (procured from France and Russia) in the May 2025 Conflict between India and Pakistan. This has led to Pakistan entering talks for potential deals with Indonesia, Bangladesh, and even Saudi Arabia (to reportedly deploy in Libya and Sudan against UAE-backed proxies), with successful sales to Myanmar, Nigeria and Azerbaijan. 

The fact that these weapons (aircraft, tanks, drones, and missiles) are battle-tested has increased demand, but there are concerns about whether Pakistan has enough production capacity to meet the growing demand. To overcome financial and technical hurdles, Pakistan will seek cooperation from China, which will not be difficult to obtain. But production could face supply chain issues: JF-17 Block III uses an RD-93MA turbofan engine produced by the Russian company Klimov. So far, they have been supplied by Russia to China for use by Pakistan (instead of directly supplying them and risking ties with India), but this supply chain could face disruption because of the ongoing war in Ukraine. 

Nonetheless, the growing military and diplomatic foothold of Pakistan is a concern for India, as tensions between the two nuclear-armed neighbors remain high. Until India develops an indigenous defense industry (which will not be in the short term nor without challenges), it must have varied sources to procure arms, lest it develop an unequal dependency on a single state, the underlying calculus of its multi-alignment policy. It diversified its arms procurement away from Russia by sourcing from France, Israel, and the US, and continues to seek other options amid growing geopolitical uncertainty. The UAE emerges as a strong option, not simply because of these geopolitical considerations; the UAE has been strengthening its defense industry, which was largely dependent on U.S. supplies, to now surpassing Egypt to become the regional leader in air defense systems, missiles, land systems, electronic warfare, and even space technologies. While the oil and trade deal offsets much of the pressure from US tariffs and the insistence on halting purchases of Russian oil, it remains to be seen how comprehensive the defense agreement between India and the UAE will be. 

Why EU, and why now?
While that deal is in the pipeline, India did succeed in securing a defense and security agreement with the European Union, along with the much hyped Free Trade Agreement (FTA). Together, the EU and Indiarepresent a quarter of the world’s population (2 billion people) and 25% of the GDP. While the FTA aims to lower tariffs, create new export opportunities, and simplify procedures, many details, particularly those related to agriculture and intellectual property rights, still require follow-up negotiations. India’s protectionist policies (which was a major reason for stalling of the agreement for the past two decades) may continue to be a hurdle in full realization of the FTA and therefore, it may not amount to be a game changer like NAFTA (signed in 1994 between Canada, Mexico and the United States), but regardless, it holds considerable political significance. Both India and the EU were moved by geopolitical considerations to sign an agreement that has repeatedly stalled and ruptured over the past two decades. 

Even as early as September 2025, European diplomats, although recognizing India's geopolitical significance in the Indo-Pacific, particularly as a counterweight to China, were wary of extending ties with India because of India's ties with Russia. India’s participation in the Russia-led defensive military exercises in Belarus in mid-September against a possible NATO invasion drew sharp criticism from European diplomats. Nonetheless, as EU Foreign Policy Chief Kaja Kallas acknowledged, while the EU and India had “clear areas of disagreement", the EU did not want to push India into “Russia’s corner”. 

The recent developments, including the chastisement of Europe in the U.S. National Security Strategy document (compared with a softer tone for Russia), President Trump’s threats to acquire Greenland (autonomous territory of NATO-member Denmark), his blatant disregard for the NATO, all following the imposition of tariffs on foes and allies alike have convinced the traditional US allies that they must diversify from the US (to what extent will they be successful is another question). This, coupled with Chinese export restrictions, has forced the bloc to reconsider foreign policy within changing contexts. 

Brussels has signed a key pact with the South American bloc Mercosur (though yet to be ratified), following deals last year with Indonesia, Mexico and Switzerland. Canada’s Mark Carney and the United Kingdom’s Kier Starmer’s recent visit to China marks a break from the tradition of parroting US policy on China. In this context, the EU-India trade deal marks yet another move by the bloc to expand its ties with key actors in different regions, especially given the shared anxieties arising from an unreliable United States and strategic rivalry with China. And as the US pursues erratic policies rather than making a cohesive attempt to marginalize China, the EU appears to have stepped up to form a partnership with Brazil (through Mercosur) to prevent it from straying into Chinese arms (through BRICS, for example) and to offer India an alternative to Russia. 

The Common Denominator: American Decline
The prime consideration has been the erratic behavior of the Trump Administration 2.0. This itself is a symptom of the American decline. As evident in the National Security Strategy, the U.S. lacks a coherent strategy; the White House is run by multiple voices, and whichever is loudest on a given day seems to dictate policy. And there are some evidences: there was no end goal or exit strategy for Venezuela after Maduro’s arrest, Trump seemed to renege on his threats to acquire Greenland; it is still unknown whether the US will bomb Iran and to what avail; and of course, it is unclear whether the US truly wants to push away its allies or simply coerce them – but again, to what avail? As the United Kingdom, France, and Canada seek trade deals with China, Trump continues to threaten them with tariffs. However, on Monday, 2nd February, Trump announced via Truth Social that the US has reached a trade deal with India, lowering its tariffs to 18% in exchange for India agreeing to end purchases of Russian oil and buying from the US or, potentially, Venezuela instead. As of 3rd February, the details of the deal (and whether there is one at all) have not yet been released.

The trouble is not the decline in American power per se – it is still powerful enough to offer the much-needed security and economic guarantees to these relatively weaker states. The trouble is the unreliability and unpredictability of the US Administration, which has left the so-called allies and aligned states in limbo. Naturally, any vacuum is immediately filled, and right now, these weaker states are forming need-and-opportunity-based alignments where they can. This may offer short-term respites to their needs, but it procures only modest gains at the risk of increasing instability. 

For example, if the UAE-India defense deals go through, they are unlikely to revolutionize the Indian military, but they will certainly blur the lines between South Asian and Middle Eastern conflicts. Nonetheless, while this may offer potential for hedging and reducing dependency on the US for Middle Eastern and South Asian countries, the more traditional ‘allies’ of the US, like the European Union, will find it difficult to enjoy the same benefits of ‘hedging’. Far from being able to chart their ‘third path’ – as Carney invoked them to do at Davos in January – they are likely to only find themselves more vulnerable to coercion, by both the US and China.