A road map for India-EU ties

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While India celebrates its 75th year of Independence, it also celebrates 60 years of diplomatic relations with the European Union (EU). 

India-EU relations 

• Background 
  • India-EU relations date to the early 1960s, with India being amongst the first countries to establish diplomatic relations with the European Economic Community. 
  • A cooperation agreement signed in 1994 took the bilateral relationship beyond trade and economic cooperation. 
  • The first India-EU Summit, in June 2000, marked a watershed in the evolution of the relationship. 
• Strategic Partnership
  • At the 5th India-EU Summit at The Hague in 2004, the relationship was upgraded to a ‘Strategic Partnership’. 
  • The two sides adopted a Joint Action Plan in 2005 (which was reviewed in 2008) that provided for strengthening dialogue and consultation mechanisms in the political and economic spheres, enhancing trade and investment, and bringing peoples and cultures together
• Common road map
  • The 15th India-EU Summit, in July 2020, provided a common road map to guide joint action and further strengthen the partnership over the next five years.
  • The road map highlights engagement across five domains: 
    • Foreign policy and security cooperation;
    • Trade and economy; 
    • Sustainable modernisation partnership; 
    • Global governance; and 
    • People-to-people relations.
• Economic 

• The India-EU partnership has grown rapidly ever since. Bilateral trade between the two surpassed $116 billion in 2021-22. 
• The EU is India’s second largest trading partner after the U.S., and the second largest destination for Indian exports. 
• There are 6,000 European companies in the country that directly and indirectly create 6.7 million jobs.

• Defence sector: 
  • Cooperation with the EU in the defence sector has also increased substantially. 
    • This is critical for India at this juncture, to reduce its hardware dependence on Russia in the backdrop of the Ukraine conflict and seek diversification of its armament imports from other regions with latest technologies in wake of its confrontation with China.
    • India and the EU regularly conduct joint military and naval exercises which reflects on their commitment to a free, open, inclusive and rules-based order in the Indo-Pacific. 

• Other avenues of collaboration.

• India and the EU have several avenues of collaboration. 
  • For example, the ‘green strategic partnership’ between India and Denmark aims to address climate change, biodiversity loss and pollution.
  • The India-Nordic Summit in May 2022 focused on green technologies and industry transformation that are vital for sustainable and inclusive growth. 
    • All this will act as a catalyst for enhanced cooperation between the two regions.
• Another rapidly growing area of engagement is the start-up and innovation ecosystem across India and Europe. 
• The Science and Technology Joint Steering Committee between the two focus on areas such as healthcare, Artificial Intelligence, and earth sciences. 
• In 2020, there was an agreement for research and development cooperation in the peaceful uses of nuclear energy between the European Atomic Energy Community and the Government of India.

• Progressive steps

• Recently, there has been increasing initiative from both sides to deepen engagement with each other. 
• The target to finalise the Free Trade Agreement has been set for 2023-24.

Challenges

• Both countries have differing opinions and divergent interests in some areas.
• India’s reluctance to explicitly condemn Russia’s intervention in Ukraine, and the country’s increasing economic cooperation with Russia, has been one area of disagreement. 
• India has called out the EU’s double standards on the same, for the EU purchases 45% of its gas imports from Russia in 2021. 
• There is also ambiguity on the EU’s strategy in tackling the rise of China. 
  • Its muted response during the Galwan clash is a case in point.
•  India’s economic, political and demographic weight could be deftly leveraged by the EU to counterbalance China’s influence across the region. But there seems to be some hesitancy about this.

Conclusion & Way Forward 

• India and the EU should not let such divergences of views overwhelm the many areas of convergence among them. 
• The proactive resumption of the ambitious India-EU free trade and investment agreement in 2021 is a step in the right direction. 
• European partners acknowledge India as an important pillar in ensuring stability in the Indo-Pacific region. 
• India and the EU are each political and economic poles in an increasingly multi-polar world. 
  • Our ability to work together, therefore, can shape global outcomes.
• India and EU should not let divergence of views on some issues overwhelm the convergence of views on other areas
• India and EU can cooperate better by investing in cleaner and greener technologies in India and helping in cleaning up production in India. 
  • Such a partnership will ensure that both India and the EU have their agendas of economic growth and sustainability fulfilled, a win-win situation for both entities.