The EU-India strategic partnership has for long focused largely on trade and cultural aspects rather than political and strategic issues. However with the changing geopolitical scenario - an assertive China and uncertainty of US policy under the Trump administration - Europe and India have realised they have much to offer each other. The 15th India-European Union (EU) Summit held virtually on 15 July 2020 provided an opportunity to India and EU to upgrade their partnerships on the issues of mutual concerns. The paper analyses the key outcomes of the summit, and looks at important issues highlighted in the EU-India Strategic Partnership Roadmap for 2025.
India-EU Relations: A Snapshot
After a promising start in the 2000s, the EU-India partnership lost much of its momentum focusing largely on trade and cultural issues instead of political and strategic concerns. Although, India’s relations with European member states - like Germany, France, and the United Kingdom (UK) – developed bilaterally, this did not help in expanding its strategic relations with the Union. On the other hand, Europe focused on China as its key partner and market in Asia. Nonetheless, the global situation in the past few years has changed. With US President Donald Trump upending the liberal order on hand, and the rise of an assertive China on the other, Brussels has realised that a substantive engagement with India is crucial. As India’s international reach and relevance continue to grow, it makes it imperative for the EU to renew its focus on developing its economic, diplomatic and defence capabilities with India.
Economics and trade remains the core of the partnership with the EU, as India’s largest regional trading partner, while India was EU’s 10th largest trading partner. India’s bilateral trade with EU in 2018-19 stood at 115.64 US$ billion comprising of 57.20 US$ billion Indian exports to EU and imports worth 58.43 US$ billion.[i] During April 2000 to June 2017, FDI flows from EU countries totaled $83.7 billion.[ii] There are more than 6,000 EU companies currently present in India, providing direct and indirect employment to over 6 million people.[iii] However, strategically, through its Strategy on India, released in 2018, the EU acknowledged its interest in promoting India’s advancement and treating India on an equal footing. “A strong modernisation partnership between the EU and India should also support the EU’s job creation, growth and investment objectives, and help promote sustainable connectivity for Europe and Asia”.[iv]
With regards to Indian position on the EU, India’s relations with European member states - like Germany, France, and U.K. – developed bilaterally, this did not help in expanding its strategic relations with the Union. This is so because for India, dealing with European powers bilaterally was much easier than engaging with the EU as a collective unit. A shift has been visible since 2016 with proactive foreign policy adopted by the Modi government and its continued outreach to the continent. India has recognised EU as a reliable partner in various strategic areas like climate change, connectivity, and military to military dialogue.
Outcomes of the 15th India-EU Summit
The Summit came at the time when both the partners are facing challenges on multiple fronts – India and the EU are reeling under the pressure of COVID-19 where their respective economies have taken a massive hit and their health-care systems are under severe stress. Secondly, in their own ways, both the partners are confronted with multiple challenges emerging from the rise of an assertive China. The Summit was also important because it not only produced a joint statement, unlike in the EU-China Summit, but also the EU-India Strategic Partnership Roadmap for 2025 was adopted. The following are the six key outcomes of the 15th India-EU Summit on 15 July 2020:
First is economics – as stated earlier, the core of India-EU partnership is trade and economics, however, the free trade agreement between the two still remains elusive. During the summit, India and the EU “reaffirmed their commitment to work towards a balanced, ambitious and mutually beneficial trade and investment agreements”[v] and established a new mechanism of a ministerial level dialogue to “provide political guidance to the bilateral trade and investment relation and continue the dialogue on a regular basis.”[vi] However, the timeline for the resumption of Bilateral Trade and Investment Agreement negotiations remained unanswered. Despite multiple rounds of negotiations, major irritants remain over issues of market access in services, agriculture, automobile and Intellectual Property Rights. EU’s insistence on including human rights provisions into the Free Trade Agreement has also hampered progress. Given that India represents 3% of total EU trade and EU represents 11% of total India’s trade[vii] – there remains immense economic potential in the partnership. The EU and India represents world’s largest economies and markets, with the EU as India’s largest trading partner and one of the leading investor, it is an opportune time for both partners to tap into each other’s strengths to unlock the economic potential.
Second, security cooperation emerged to be a key agenda during the summit. The military-to-military ties were first articulated by EU in its Strategy on India, 2018. With the EU trying to build a credible military infrastructure, the strategy stressed the importance of developing “military-to-military relations with India, including between leaders of the Indian armed forces and the EU military structures, as well as joint exercises”[viii]. The Roadmap 2025 takes the partnership further with the establishment of a maritime security dialogue replacing the counter-piracy dialogue to explore opportunities for further maritime cooperation. As compared with the Roadmap 2020, signed in 2016, in the new roadmap cooperation between EU Naval Force (EUNAFOR) Atlanta and the Indian Navy is also highlighted, along with the efforts to conclude a working arrangement between EUROPOL and Central Bureau of Investigation on the issues related to organised crime and terrorism. Another key highlight was the inclusion of Indo-Pacific region in the larger security framework, showing the acceptance of the concept by the EU and the need to work together to maintain peace, openness, and freedom in the maritime domain.
Third is connectivity – a new addition to the Roadmap 2025. The EU and India share the view that the approach to connectivity should be environmentally, economically, socially and fiscally sustainable and provide a level playing field for businesses, while respecting international standards and enhancing governance. Connectivity was also identified as an area of high potential for cooperation between the two partners in the EU’s strategy on India. While India is yet to formulate a policy framework on connectivity, the EU published its strategy document titled “Connecting Europe and Asia: Building Blocks for an EU Strategy” in 2018. The Roadmap 2025 places importance on the exploration of initiatives to improve connectivity between EU and India and to “seek synergies between their cooperation on connectivity with third countries including in the Indo-Pacific region.” The new roadmap calls for enhanced dialogue between the two in the promotion of sustainable connectivity and transparency in the investments. It is true that there is an untapped potential in sustainable connectivity between India and EU and it raises the possibility of increased cooperation between the two. For the EU and India to jointly undertake projects, both partners need to increase their strategic trust and complement it with increased investments.
Fourth is the signing of the civil nuclear cooperation agreement between EURATOM and Indian authorities, which would focus on cooperation between EU’s research programmes on new ways of using nuclear energy and similar activities on the Indian side. The agreement was negotiated over thirteen years. While EURATOM has many nuclear cooperation agreements with other partners like US, Japan, and Australia - this agreement stands out because this is the first time EU has signed a nuclear agreement with a non-NPT member highlighting the importance it attaches to its partnership with India.
Fifth, as the pandemic laid bare the fragilities of health care structures around the world, India and EU recognised the need to strengthen their health cooperation. During the summit, the leaders discussed the need to advance global cooperation, development of a vaccine, mitigation of the socio-economic consequences and to enhance preparedness. European dependence on pharmaceuticals from Asia[ix] was very much visible during the COVID crisis. India’s pharmaceutical manufacturing capabilities coupled with access to the healthcare technologies from European countries can provide new avenues for enhancing partnerships and promoting innovation between the two. To promote this idea of health as a ‘global public good’ – India and EU, during the summit, established an EU-India Joint Working Group on pharmaceuticals, biotechnology and medical devices. This was aimed at fostering alignment with international standards and practices and ensuring the quality of pharmaceutical active ingredients and medicines[x]. They also decided to cooperate in multilateral fora such as the Global Research Collaboration for Infectious Disease Preparedness, the Global Alliance for Chronic Diseases, and the Coalition for Epidemic Preparedness Innovations (CEPI) to strengthen their partnership in areas of health and bio-economy. Also with the EU renewing its focus on diversifying global supply chains, this can provide new avenues of collaborations in enhancing trade and connectivity between the two partners.
Sixth is the strengthening of multilateralism. Multiple factors such as a pandemic, tensions between major powers, stress on institutions of global governance and economic stagnation, have led to increasing concerns regarding the sustainability of the multilateral system. The EU has been a strong supporter for multilateralism and the rising concerns related to the viability of this system had found resonance in the establishment of informal Alliance for Multilateralism of which India is also a member. Launched in 2019, it is a German-French Initiative to protect and preserve international norms, institutions, and agreements that are under stress. India while joining this alliance had called for “reformed multilateralism with a purposeful reform of existing structures so that they continue to serve the international community even more in this complex and uncertain time”[xi]. During the summit, both the partners re-committed themselves to promote an effective and a rule-based multilateral order. The Roadmap 2025 defined both India and the EU as “unions of diversity….sharing values of democracy, rule of law and human rights… equally convinced of the necessity to preserve the rules-based international order and effective multilateralism.”[xii] Both sides have decided to enhance cooperation in the United Nations and other multilateral fora, and jointly address the challenges in the WTO. This also allows them to address the challenges that are being posed to multilateralism and to promote dialogue and cooperation on global issues.
Assessment
In his recent writings, High Representative Josef Borrell acknowledged that the western-led order is in crisis. He stated that “We have now a real crisis of multilateralism: the G7 and G20 are absent; the UN Security Council is paralysed and many ‘technical’ organisations are turned into arenas where countries compete for influence…Europe feels somewhat lonely, trying to hold the multilateral ring. For sure we know that we need partners.”[xiii] With the COVID pandemic and increased tensions between US and China on the other, international multilateralism is under stress. India and EU are uniquely placed in this system to rebuild this fraying multilateralism. This was one of the main agenda of discussion during the summit. Both partners committed themselves to enhance cooperation through dialogue and to work towards defending the rule-based global order based on sustainable growth, stability and security.
India-EU ties in the past few years have become strategic with discussions taking place on issues beyond economics. India-EU have had more than 30 dialogue mechanisms on issues ranging from counter-terrorism, cyber-security, science and technology, climate change and environment, foreign policy, among others. There is an increasing push in Brussels to emerge as a geopolitical actor and India is a natural partner in many respects. At the same time, India is also emerging as a credible player beyond South Asia and the Indian Ocean, which has led the EU to look beyond its own periphery. The EU has become part of the International Solar Alliance in December 2018, and as stated in the Agenda 2025, it is looking forward to enhanced participation in Coalition for Disaster Resilient Infrastructure programme launched by India in 2019 to ensure that the infrastructure is resilient to climate change. The two have also been coordinating closely on regional issues. The inclusion of Indo-Pacific and “cooperating to preserve freedom, openness and an inclusive approach in the maritime domain, in full compliance with international law” highlights the expanding scope of the partnership beyond the traditional issues.
However, it is not enough to just reiterate that India and the EU are “natural partners”, the areas and the priorities highlighted needs to be focused on. One of the key priorities is the conclusion of EU-India FTA. Although during the summit, a ministerial-level dialogue on trade and investment was established to restart the negotiations and both sides affirmed the need for balanced trade and investment agreement, both India and EU would need to be flexible and find middle ground to address the core issues like market access for services, IPR etc. Moreover, in a post-pandemic world, Europe is looking at diversifying its supply chains away from China, India should not miss this opportunity to attract investments and intensify its economic relations. Also, India needs resources and expertise from the EU for its various priority areas, such as cyber-security, urbanisation, environmental regeneration, and skill development. As the EU shifts its focus to India, and acknowledges its economic growth and rising global profile, the outcomes of the summit point to a long-term strategic vision to redefine and revitalise the partnership, which is the need of the hour.
*****
*Dr. Ankita Dutta is a Research Fellow at Indian Council of World Affairs.
Disclaimer : The views expressed are personal
End Notes
[i] EU-India Trade, Department of Commerce, Ministry of Commerce & Industry, https://commerce.gov.in/InnerContent.aspx?Id=70#:~:text=India's%20overall%20bilateral%20trade%20with,11.37%25%20of%20India's%20imports)., Accessed on 18 July 2020
[ii] India-EU Bilateral Brief, Indian Embassy, Brussels, 17 March 2018, https://www.indianembassybrussels.gov.in/pdf/Revised_Brief_Unclassifiedmar19_2018.pdf, Accessed on 18 July 2020
[iii] EU-India Fact Sheet, EU Strategy on India, https://cdn2-eeas.fpfis.tech.ec.europa.eu/cdn/farfuture/bKxeumPzObF8OEde6SrD5qWyKo9-suTMQp3ZZLfv93M/mtime:1542703624/sites/eeas/files/eu-india_factsheet_november_2018.pdf, Accessed on 19 July 2020
[iv] Elements for an EU strategy on India, Joint Communication to the European Parliament and the Council, 20 November 2018, European Commission, Brussels
[v] Joint Statement - 15th EU-India Summit, European Council, 15 July 2020, https://www.consilium.europa.eu/en/press/press-releases/2020/07/15/joint-statement-15th-eu-india-summit-15-july-2020/, Accessed on 20 July 2020
[vi] EU-India Strategic Partnership: A Roadmap to 2025, European Council, 15 July 2020, https://www.consilium.europa.eu/media/45026/eu-india-roadmap-2025.pdf, Accessed on 20 July 2020
[vii] Trade with India, European Commission, https://ec.europa.eu/trade/policy/countries-and-regions/countries/india/, Accessed on 21 July 2020
[viii] Elements for an EU strategy on India, Joint Communication to the European Parliament and the Council, 20 November 2018, European Commission, Brussels
[ix]Euractiv, 16 March 2020, https://www.euractiv.com/section/health-consumers/news/europes-dependence-on-medicine-imports/, Accessed on 21 July 2020
[x] EU-India Strategic Partnership: A Roadmap to 2025, European Council, 15 July 2020, https://www.consilium.europa.eu/media/45026/eu-india-roadmap-2025.pdf, Accessed on 21 July 2020
[xi] The Economic Times, 12 July 2020, https://economictimes.indiatimes.com/news/politics-and-nation/et-analysis-india-eu-should-lead-multilateralism-rules-based-order/articleshow/76924345.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst, Accessed on 21 July 2020
[xii] EU-India Strategic Partnership: A Roadmap to 2025, European Council, 15 July 2020, https://www.consilium.europa.eu/media/45026/eu-india-roadmap-2025.pdf, Accessed on 21 July 2020
[xiii] ‘In a world of disorder, Europe needs partners’, Josef Borrell, European Union External Actions, 10 July 2020, https://eeas.europa.eu/headquarters/headquarters-homepage/82725/world-disorder-europe-needs-partners_en, Accessed on 21 July 2020