Europe's Economy Stagnates Amid US-China Tolicies, India Emerges as Key Partner

The report by Maldives Insight said that the EU's economy is being squeezed by a tariff dispute with the US that has raised export costs and dampened demand.

Meanwhile, a surge of low‑priced Chinese imports has widened bilateral trade deficits and weakened EU's domestic industries.

Import of cheap Chinese goods "has adversely impacted the EU's macroeconomic vitals like employment rate, domestic production, and trade balance," the report mentioned.

The Chinese export model is based on overproduction, overcapacity and price suppression, and openly bending the rules of free trade regimes, it added.

Germany, Italy and France, the growth engines of the EU economy, have shown considerably weak growth rates of 0.2 per cent, 0.9 per cent and 0.7 per cent, respectively, and thousands of German companies filed for insolvency in 2025.

Analysts recommended deeper economic ties between India and Europe, arguing that the recently concluded India‑EU free trade agreement would "unleash a vast cross-sector economies of scale and build resilient supply chains for both economies".

The ambitious the India-Middle East-Europe Economic Corridor (IMEC), would act as a network of strategic corridors, creating a web of resilient and diversified supply chains across different geographies, the report detailed.

The report said that the rule-based order that global powers observed seems to be collapsing, adding that Canadian Prime Minister Mark Carney and French President Emmanuel Macron have recently publicly voiced similar sentiments.

It pointed at the "recent arm-twisting of Europe by the US on the Greenland issue, and as the constant threats of slapping high tariffs" and urged European and other major powers to diversify their markets.

- IANS