Is Europe Breaking Away From The US And China? What’s The Big Indo-Pacific Pivot, And India’s Role?

Last Updated:April 08, 2026, 12:14 IST

Hedging reflects a broader shift in diplomacy. It is not about choosing sides between US and China, but about de-risking and diversifying ties. For India, this is an opportunity

In the shifting global order with rising geopolitical uncertainty, the European Union (EU) is quietly crafting a new strategy in the Indo-Pacific. Rather than forming a rigid military bloc, it is building a flexible network of partnerships with countries such as India, Japan, Australia, and South Korea.

This approach, often described as “hedging," reflects a broader shift in global diplomacy. It is not about choosing sides between the US and China, but about diversifying partnerships to reduce risk and increase strategic autonomy. For India, this evolving strategy presents both opportunities and challenges.

Let’s understand the term ‘hedging’, how Europe is partnering with other countries to stay relevant, and what it matters to India.

Is Europe Building An Alliance Away From The US, Russia, And China?

The EU’s Indo-Pacific outreach marks a departure from its traditionally cautious geopolitical role. This includes promoting a rules-based maritime order in the South China Sea, enhancing naval presence, and initiating projects such as Enhancing Security Cooperation in and with Asia (ESIWA).

For years, Europe relied heavily on the US for security while maintaining strong economic ties with China. Europe lacks essential high-end technology, specifically software, satellites, and mid-air refuelling capabilities. Therefore, it is dependent on the US in specialised areas such as air defence, missiles, and 5th-generation fighter aircraft.

In 2024, the US covered nearly half of NATO’s total defence budget, far exceeding the combined defence budgets of all other members. Moreover, roughly 100,000 US troops are stationed in Europe, with another 200,000 ready for deployment, along with roughly 100 US tactical nuclear bombs stored in Europe, according to Bruegel — a Brussels-based economic think tank.

That balance is now under strain.

Rising tensions with China, over trade practices, technology competition, and strategic influence, have pushed the EU to rethink its dependencies. The EU is adopting a “de-risking" approach, conducting anti-subsidy probes into Chinese electric vehicles (EVs) and strengthening investment screenings, while navigating high-tech competition and challenging Chinese influence in critical sectors, according to a report by the Atlantic Council — a US think tank founded in 1961.

China’s massive trade surplus with the EU, which exceeded $350 billion in 2024, is considered unsustainable. The EU has initiated anti-subsidy investigations into Chinese EVs, solar panels, and wind turbines, amid accusations of Chinese overcapacity causing deindustrialisation in Europe.

Europe is also restricting Chinese technologies, including 5G infrastructure, over espionage fears. The EU faces reliance on China for critical raw materials, prompting moves to secure supply chains. Recent concerns include Chinese cyber threats to critical infrastructure.

China’s alignment with Russia in the Ukraine war has severely damaged trust. Europe is reducing its strategic dependence on China, aiming for “de-risking, not decoupling", which has led to a freezing of the Comprehensive Agreement on Investment.

Thus, instead of binding commitments, the EU is building a web of partnerships that can be activated depending on the issue, be it trade, technology, or security.

What Is the ‘Hedging Alliance’?

Unlike traditional alliances such as NATO, ‘hedging’ is emerging as an informal and issue-based framework. It connects Europe with Indo-Pacific “middle powers"—countries that have significant economic and strategic influence but are not global superpowers.

These partnerships focus on practical cooperation. In defence, this could mean joint naval exercises or maritime security coordination. In trade, it involves diversifying supply chains away from overdependence on a single country. In technology, it includes aligning standards and building resilient digital ecosystems.

For example, under President Moon Jae-in, South Korea practised a form of hedging after experiencing Chinese retaliation for hosting a US THAAD missile defence battery in 2017. Seoul agreed to the “Three No’s" (no additional THAAD deployments, no joining a US-led regional missile defence, no forming a trilateral alliance with Japan) to calm Chinese anger — a stark illustration of balancing between security needs and economic coercion.

This model reflects a wider global trend: countries are increasingly avoiding rigid blocs and instead opting for flexible, overlapping partnerships that allow them to adapt to changing circumstances.

Are Middle Powers Like India, Japan, And Australia Rising?

At the heart of this strategy are middle powers — nations that are neither dominant superpowers nor passive actors. Countries such as India, Japan, Australia, South Korea, and key Southeast Asian states are gaining prominence in a more distributed global order.

Countries are increasingly building flexible, non-exclusive partnerships across security, trade, and technology to navigate the intensifying US-China rivalry. Rather than siding with one power, they are adopting a “hedging" approach, working together to strengthen strategic autonomy, secure supply chains, and expand defence and industrial capabilities.

Their importance lies in their ability to shape regional outcomes without being tied to a single power centre. They have economic weight, growing military capabilities, and strategic autonomy.

For the EU, partnering with these countries offers a way to remain relevant in the Indo-Pacific without directly confronting China or overcommitting to US-led frameworks.

Why India Is Central To This Strategy

For India, the EU’s approach creates a significant opportunity to expand its global role. Unlike traditional alliances, this framework aligns well with India’s long-standing policy of strategic autonomy.

India is seen as a credible and independent partner — one that can engage with both Western countries and the Global South. This makes it a key player in any effort to balance China without forming overtly anti-China blocs.

There is also a strong economic dimension. Trade talks between India and the EU have gained momentum, with both sides looking to deepen economic ties. India and the European Union finalised a landmark Free Trade Agreement on January 27, 2026, after nearly two decades of negotiations. Touted as a comprehensive “mother of all deals," it aims to remove tariffs on over 99% of Indian exports to the EU, deepen economic ties, boost services growth, and expand market access in sectors such as textiles and pharmaceuticals.

As companies seek to diversify supply chains away from China, India stands to benefit as an alternative manufacturing and investment destination.

On the strategic front, cooperation could extend to areas such as maritime security, defence technology, and critical infrastructure. On January 27, 2026, the EU and India signed a Security and Defence Partnership on the margins of the EU-India Summit, marking a new chapter in the strategic relationship between the two countries.

Perhaps most importantly, this evolving alignment enhances India’s leverage. By engaging with multiple partners, India can strengthen its position without being locked into any single bloc.

What Are The Limits Of Europe’s Approach?

Despite its ambitions, the EU’s strategy has clear limitations. Unlike the US, Europe lacks a unified military presence in the Indo-Pacific. Its ability to project hard power remains limited.

There are also internal divisions within the EU. Member states often have differing priorities when it comes to China, trade, and security. This can slow decision-making and weaken collective action.

Moreover, hedging itself is not a permanent solution. It is a strategy designed to manage uncertainty, not eliminate it. As geopolitical tensions intensify, countries may eventually be forced to take clearer positions.

For middle powers like India, this creates a delicate balancing act. While flexibility offers advantages, it also comes with the risk of increased pressure from competing powers.

What Next?

The coming years will be crucial in determining how this strategy evolves. One key indicator will be the progress of EU-India cooperation, particularly in trade, defence, and technology.

Another will be Europe’s growing presence in the Indo-Pacific, whether through naval deployments, joint exercises, or new partnerships. These moves will signal how far the EU is willing to go in translating strategy into action.

China’s response will also be critical. As Europe deepens its engagement in the region, Beijing may adjust its approach, either by countering these efforts or by seeking to maintain economic ties.

Finally, the broader global context will shape outcomes. If geopolitical tensions escalate, the space for hedging may shrink, forcing countries to make more definitive choices.

News explainers Is Europe Breaking Away From The US And China? What’s The Big Indo-Pacific Pivot, And India’s Role?