India EU 300+
History + Introduction line
• India-EU relationship is founded on the bedrock of democratic values and shared commitment to multilateralism.
• S Jaishankar in "The India Way" [2020] writes - although earlier India looked EU through prism of CW, now we are
taking more nuanced view. India EU roadmap 2025 outlines vision for the deeper strategic partnership.
History
• 2005 - SP
• 2007 - FTA talks began
• 2018 - India strategy paper recognizing India as 'emerging global power' and factor of stability in the current
multipolar world
• India EU roadmap for 2025 - deeper strategic partnership
• 2021 - Landmark 27+1 summit
Convergences
• Strategic outlook
◦ Principles of democracy, rule of law and respect for human rights
◦ committed to multilateralism and rules-based world order underpinned by UN charter
◦ France blocked Chinese attempts to bring Kashmir question on the UNSC
• Sino-US rivalry
◦ Europe is concerned about intensifying Sino-US competition. Macron warned that Sino-US confrontation may turn
Europe into 'vassal states' and called for greater strategic autonomy -> India natural partner
• Assertive China
◦military adventurism in Asia, misuse of the multilateral trading system (e.g., via subsidies and forced technology
transfers), and gross human rights’ violations in Xinjiang
◦ China and Russia announced a “no-limits” partnership
• Indo Pacific
◦ EU countries- France, Netherlands and Germany have come up with their Indo-pacific strategy that calls for a free
and open Indo pacific based on rules based world order.
◦ EU's strategy highlights “china’s expansionism as threat to european security and prosperity” and focuses on
“centrality of ASEAN” in the Indo pacific
◦ EU is under pressure from the US to share a greater part of the defence burden in Europe against Russia and
contribute to Asian security by boosting the US balancing effort against China
◦ Global Gateway - mobilise 300 billion Euro by 2027 to address infrastructure investment gap in developing
countries
◦Rajiv Bhatia - India at heart of EU's IP strategy 2021 -> Chinese expansionism threat to European security
◦ For India, EU countries is a natural partner in forging a durable BOP in the Indo-pacific region.
• Trade & investment
◦ $132bn [2022-23]. EU is India's largest trading partner
◦ Investment = $94bn [2023]
◦ Shared concerns over China’s threat to economic security = 'China+1' -> for relocation of global supply chains in
areas like solar panels, critical minerals, electronics
◦ Connectivity partnership 2021
• Defence partnership
◦ EU aims to reduce reliance on US security guarantee and wants to build own deterrence capabilities
◦ Greater Paris is replacing Moscow as India’s most trusted defence partner over the last 25 years. Whether it was
the refusal to punish Delhi in the wake of the 1998 nuclear tests or giving access to Rafael (France - 2nd largest
defence supplier SIPRI 2022)
• Green partnership
◦ International platform for sustainable finance; EU joined India's CDRI.
Challenges
R Jayasimha Reddy | AIR 46 CSE 2024
• High on promise short on delivery
• Hardeep Singh Puri - tendency to lecture India on democracy, HR, Kashmir issue - diplomatic distrust
• Love-less arranged marriage - Raja Mohan -> as Europe was treated as diplomatic backwater in India.
◦ BTIA - negotiations began in 2007, put on hold in 2013 and resumed in 2021
◦ China-EU trade = $938bn (2021-22) & EU's investment in Brazil is $270bn compared to paltry $94bn in India
despite India's size and growth rate
◦ RCEP for India, Brexit for EU, diversifying supply chains (China+1)
◦ BTIA is very comprehensive - services, investments and labour intensive sectors like leather, textiles and
engineering goods.
◦ Services trade (India -> Liberal Visa; EU -> banking & insurance sector)
◦ Goods trade (Non-tariff barriers; Wines & automobiles)
◦ Technical Barriers to Trade (TBT) - legal requirements to ensure safety and environment protection. Tea exports
were hurt due to 'maximum residue level', rice exports due to 'fungicide limit'
◦ IPRs (WTO-plus, CL, patent evergreening)
◦ Data governance (Data secure status; Data localisation - India boycotted Osaka track)
◦ EU Green deal - CBAM
◦ Negotiations complicated due to differing positions of 27 countries
◦ Vietnam example - textiles India lost out
◦ Functionalist approach can be adoptde - start with non-conflictual areas like textiles, gradually expand
◦ Recently - trade and technology council to tackle above challenges
◦ European Parliament elections saw resurgence of far-right parties due to growing backlash against immigration,
inflation and environmental reforms. This may make signing migration and mobility partnership even difficult
• Brexit consequences (covered under regionalisation of world politics)
• Fundamental disagreements on geostrategical issues
◦ Europe frustrated over India's reluctance to condemn Russia.
◦ Europe sees Russia as the principal threat and China as an opportunity. For Delhi, Beijing is the principal challenge
and Moscow is part of the answer
◦ Differences over Ukraine war
▪ upset that India didn't condemn Russia
▪
S Jaishankar notes "Europe has to grow out of the mindset that Europe’s problems are the world’s problems,
but the world’s problems are not Europe’s problems."
• Lack of convergence on China
◦ 'systemic challenger' not willing to contain or economically decouple
◦ Some in Europe bet Xi is the only world leader who can moderate Putin’s policies towards Ukraine
◦ While France & Germany are critical, for Italy, Portugal, Greece & Hungary China is a major investor. Through 17+1
framework, southern European countries work closely with China on economic cooperation
Recent measures
• US retreat & Chinese expansionism pushing closer
• 2021 - landmark 27+1 = Only USA other country with which EU has such arrangement
• Revived BTIA talks in 2021 after breakdown in 2013 -> fallout of Brexit
• Trade and Technology council 2022
◦ India is the only second country after the US with which the EU has a TTC mechanism.
◦ Signed semiconductor pact at 2nd India EU TTC in November 2023
Pre conclusion line
• As Delhi realizes that every European nation from Luxembourg to Poland has something to offer it is coming out of
'strategic neglect'
• India is the largest market and fastest growing economy
• EU's India strategy paper recognizing India as 'emerging global power' and factor of stability in the current multipolar
world
• Faced with the growing assertiveness of authoritarian powers—both globally and on their borders—the “world’s largest
democracies”[5] should be collaborating more closely than ever
• Europe's heightened focus on defence in the aftermath of Russia's invasion of Ukraine
R Jayasimha Reddy | AIR 46 CSE 2024
• Truly geopolitical EU would recognise that stronger ties with India can foster economic de-risking amid rising anxiety
over Chinese power
• Potential return of Trump in USA necessitates deeper mutual ties as a useful geopolitical hedge, allowing each other to
de-risk their respective relations with the USA
Measures needed
• Raja Mohan - Delhi has barely scratched India’s strategic possibilities in Europe
• Conclude BTIA (key to India's $10 trillion aspiration & Make in India)
◦ H.V Pant - In the age of de-globalisation, strategic logic of trade pacts among like-minded countries is the new norm
• Migration and mobility partnership
• Cooperate in high tech - 6G, AI, space technologies, cybersecurity, etc. - more strategic depth
• Potential French role in modernising India’s defence industrial base through co-development and co-production of
weapons.
• long-term imperative of deeper engagement with European security institutions - NATO as well as the emerging
European ones like the mechanism for Permanent Structured Cooperation (PESCO)
Conclusion
• step up its engagement with Europe
India Middle East Europe Economic Corridor
India-EFTA FTA
• ECTA with Australia, CEPA with UAE
• Talks are on with EU and UK
• EFTA - Iceland, Liechtenstein, Norway and Switzerland
• EFTA states shall aim to increase FDI into India by $50 billion within 10 years, and another $50 billion in the five years
thereafter. This could facilitate the generation of one million direct jobs in the country
• India will reduce tariffs on industrial goods like pharmaceutical products, machinery, watches, fertilisers, medicine,
chemical products and others
• EFTA’s “market access offer covers 100 per cent of non-agri products”. The services sector also forms a vital part of this
trade agreement. The agreement would help stimulate services exports in areas such as information technology and
facilitate the movement of key skilled personnel
R Jayasimha Reddy | AIR 46 CSE 2024