India is a priority partner for the US in Central and Eastern Europe
Increasing friction between the United States and India in recent months risks fracturing a relationship that is too important to fail. As an emerging economic colossus, India is a critical trading partner for the US and an economic counterweight to China in Central and Eastern Europe.
To help India on its path to economic diversification and to ensure it serves as a counterbalance to China, the US and its European partners should incentivise mutually beneficial trade and investment between India and the Central and Eastern European countries (CEECs). As America’s biggest rival, China is making inroads with the CEECs. India provides a key economic counterweight that will bolster the strategic depth of the US and its allies.
This may be the Indian century. As it sits astride global trade routes, India is well positioned to keep China off-balance geopolitically. It is the world’s largest democracy and has the fourth-largest economy, set to drive change regionally and globally. And yet, despite average annual economic growth of 7 percent since 1991, India will struggle to keep its young, growing population of 1.46 billion employed. Additionally, New Delhi is concerned about its reliance on Chinese goods, and bilateral trade remains heavily skewed in Beijing’s favour.
To mitigate China’s increasingly aggressive efforts at gaining influence, India is pursuing domestic programs such as Make in India, while also seeking new economic partnerships that bolster its resilience and provide alternatives to China. This creates a window for the US and Europe to encourage Indian investment in Europe, particularly in the CEECs. For India, European partnerships serve as a back-up plan and a promising pathway, ensuring economic diversification and underpinning autonomy.
Washington is beginning to think along these lines. In July, US Secretary of State Marco Rubio announced that America’s global engagement is shifting to prioritise ‘trade over aid, opportunity over dependency, and investment over assistance’. These changes focus on countering ‘China’s exploitative aid model and further our strategic interests in key regions around the world’.
Prioritising India as a key partner across the CEECs aligns with this shift and is urgently needed. China continues to make inroads in the region through programs such as the Belt and Road Initiative and Digital Silk Road. China has reported record trade with the CEECs of 522.88 billion yuan (US$72.85 billion) in the first half of 2025, up 6.8 percent on a year earlier. This follows a previous record high in 2024, underscoring persistent Chinese interest in the region. Its growing presence and economic expansion in the CEECs present challenges and demand creative responses.
To offset risks and build strategic depth, the US should promote India as a key CEEC partner. To do this, US leaders should consider energising existing collaborative frameworks such as the India-Middle East-Europe Economic Corridor, the India Trilateral Forum, and the US–India TRUST (Transforming the Relationship Utilizing Strategic Technology) Initiative. Taken together or separately, these existing frameworks offer potential starting points for incentivising Indian investment in the CEECs.
India is already present in Central and Eastern Europe and is expanding its trade and investment opportunities there. One example of India’s regional presence is its 2017 US$557 million investment in the Apollo Tyres plant in Hungary. In Poland, India-based information technology companies employ more than 10,000 local employees. The region offers economic diversification and opportunities for India’s growing population to live, work and travel. From the CEEC perspective, India is an emerging global power and a viable economic counterweight to China.
India’s strongest trading partner in the region is Poland, with which it had nearly US$6 billion in bilateral trade in 2023 and approximately US$5 billion in 2024. Others, such as Ukraine, Hungary, Czechia and Slovakia are also increasingly engaging with India. Due to India’s long relationship with the Soviet Union and now Russia, its economic presence and investment in the region is already established. Building on this, the CEECs offer an untapped potential for a rapidly growing and modernising India.
For India, its economic presence in the CEECs supports its ‘Developed in India by 2047′ strategy and offers a path to reduce reliance on Chinese goods while retaining strategic autonomy. For the CEECs, India’s presence offsets growing Chinese investment in the region. This is critical given recent memories of Chinese economic coercion and what some call ‘weaponised interdependence‘, as experienced by Lithuania in 2021. For the US and Europe, which are already competing with China in the region, incentivising Indian investment in the CEECs brings the world’s fastest-growing economy and largest democracy into the arena.
While the US is unlikely to contain a rising China, it can build partnerships to balance it. India should be viewed as a priority partner in Central and Eastern Europe. Investing now for the future, the US must prioritise India, incentivise India and not squander what may be the most important relationship of the century.