This paper examines India’s strategically significant early-2026 trade repositioning through the conclusion of negotiations on the India–European Union Free Trade Agreement (FTA) on 27 January 2026, and evaluates its likely implications for India–US trade relations. As of February 2026, the India–EU FTA has completed negotiations but still requires formal signature, approval, and ratification before entry into force. The agreement is nevertheless a major structural milestone: the EU is currently India’s largest trading partner, with €120 billion in goods trade in 2024, and the agreement is expected to reduce or eliminate tariffs on a very large share of bilateral trade while deepening market access in goods and services. The paper argues that the India–EU FTA should be understood not merely as a bilateral commercial pact, but as a strategic instrument of trade diversification, supply-chain resilience, and geopolitical hedging. Its timing is especially important because India and the United States also announced an interim trade arrangement in February 2026, involving reciprocal tariff adjustments, expanded market access, and a broader pathway toward a bilateral trade agreement. Against this backdrop, the India–EU FTA may reshape India–US trade relations in three ways: first, by improving India’s bargaining leverage with Washington; second, by reducing India’s overdependence on any single export market; and third, by intensifying competitive pressure on the United States to secure deeper and more stable market access in India. At the same time, closer India–EU integration may generate selective friction in India–US trade where regulatory standards, tariff preferences, or sectoral priorities diverge. Overall, the study positions the India–EU FTA as a catalyst for a more multi-aligned Indian trade strategy, one that strengthens India’s autonomy while recalibrating, rather than weakening, its economic engagement with the United States.