Dynamic relations with the European Union (EU) has been a key aspect of India’s foreign policy. In fact, as is already well known, India was among the first countries to establish diplomatic relations with the then European Economic Community (EEC), the precursor to the EU. The ‘strategic partners’ adopted the Joint Action Plan in 2005 providing a platform for strengthening dialogue and consultation mechanisms in the political and economic spheres, enhancing trade and investment, while also bringing peoples and cultures together.
The EU-India partnership has deepened since the announcement of strategic partnership in 2004. One of consistent features of the relationship is the holding of the EU-India Summits. Since 2000, fourteen annual summits have been held between them, the last one was held in New Delhi in October 2017. At the last Summit, both Indian and EU leaders adopted a Joint Statement, which reiterated their commitment to tackle terrorism, combat climate change, implement the 2030 Agenda for Sustainable Development and encourage global low greenhouse gas emissions, climate resilient and sustainable development. The leaders at the summit welcomed the launch of the ‘Investment Facilitation Mechanism’ for EU investments in India which will provide procedural guidance to EU companies.
At the political level, both the sides hold foreign policy consultations at the level of Secretaries. On trade and investment, the EU is India’s largest regional trading partner while India was the EU’s 9th largest trading partner in 2016. Over the period April 2000 to June 2017, FDI equity flows from EU member countries totalled $ 83.7 billion. At 24.45% of total FDI flows to India ($ 342.39 billion), this makes the EU India’s largest source of FDI. A special trade and economic relationship is thus a major pillar of the India-EU relationship.
The EU has also been providing considerable infrastructural aid to India. The European Investment bank (EIB) loan agreement for Bangalore Metro Phase-II Project was agreed to during the 14th India-EU Summit. The Horizontal Agreement on Civil Aviation between India and the EU became operational in February 2018. The EIB also committed 800 million euros for renewable energy investment across India. Besides, the EU and India also cooperate in the field of science and technology, energy security, smart and sustainable urbanisation, education, culture and ICT.
India also has traditionally good bilateral relations with several European countries. One such country with which India enjoys a harmonious relation covering a gamut of issues is Italy. As part of the ongoing celebrations to commemorate the 70th anniversary of the establishment of diplomatic relations between the two countries, the Italian Prime Minister Prof. Giuseppe Conte will visit India later this month to discuss trade investments, space technology and innovation, robotics and artificial intelligence among other areas of interest. The visiting Italian Prime Minister will also to participate in the 24th edition of the DST-CII India-Italy Technology Summit 2018, where Italy is the Partner Country.
Over the years, India and the EU have signed a number of bilateral agreements and MoUs on a range of issues. However, they are still negotiating the bilateral Broad-based Trade and Investment Agreement (BTIA) since 2007, with both sides having major differences on key issues like intellectual property rights, duty cut in automobile and spirits, and liberal visa regime.
The direction of development of India-EU relations is moving in the positive direction and its destination is clear. Both sides share the same set of democratic values and have a continued commitment to move forward on areas of strategic interests. The immense possibilities of a strong relationship between EU and India based on mutual interest and benefits cannot be negated. The full potential of this relationship, when realised, can lead to progress and prosperity for both EU and India. For this to happen, strong political will and mutual recognition of each other’s strength at a time when the underpinnings of global geopolitics are fast changing is an absolute necessity.
Script: Dr. Sanghamitra Sarma, Strategic Analyst On European Affairs