EU-India Relations in a Changing Strategic Environment –

India’s relations with the European Union over the years have been built on the principles of cooperation, shared values and common concern for global peace, security, and development. This makes them natural partners as well as factors of stability in the present world order. Together, they are capable to create a dynamic future for their 1.8 billion people as they have tools and mechanism to construct a relationship which will keep on unfolding over the next decades. This relation is also crucial determinants of international relations, including the governance of international trading system. In a rapidly evolving international environment, strategic partnership between EU and India is not just about trade and geo-politics, but also about what future will look for the two largest democracies of the world in the coming decades.

Sunil Prasad is Secretary General at Europe India Chamber of Commerce.

These are challenging times for EU and India, and a closer alignment of interests and a wider usage of the tools of diplomacy will help in bolstering a better EU-India relationship at a time when the international system is undergoing rapid changes. Looking beyond the well-established trade and economic agenda, they must further strengthen their capacity to work together on issues such as terrorism, promotion of democracy, human rights, and sustainable development.

Ukraine war – a common concern

The ongoing war in Ukraine has upended the existing world order and is reshaping a new world order with unimaginable political, economic, social and national security consequences for all countries. This new situation is also reshaping the global energy supply, production, distribution, and financial system.

India’s stance over the Russian invasion of Ukraine may have disappointed EU but one must appreciate how India’s nuanced diplomacy has helped in preventing a unipolar centre of gravity in international politics. India’s position has always been that dialogue and diplomacy are the only way forward. India is most concerned with strategic developments in its immediate vicinity. The problem with Europe is that it painted the Ukraine war as war against all, thus closing doors of diplomacy. As many senior experts in the know of things say, Europe has to grow out of the mindset that Europe’s problems are the world’s problems, but the world’s problem are not Europe’s problems. Only if Europe comes out of this mindset, shall it realise the new economic, social and security challenges that the countries beyond European shores are facing.

New pathways to conclude FTA

EU and India are rediscovering new pathways to conclude the free trade negotiation. The Bilateral Trade and Investment Agreement (BTIA) has strategic importance for EU and India. It is also a geo-political opportunity for peace and security in the Indo-Pacific, and a geo-economic opportunity for opening new areas of economic cooperation. As global power dynamic shifts, it is important that EU and India assert their role in the emerging multi-polar world order with closer economic cooperation. If EU and India take the FTA negotiation as a matter of strategic and economic urgency, it would help the FTA negotiations. Negotiating a successful trade deal which will impact the lives of more than 1.8 billion people is a complex and complicated exercise and will require visionary approach where “rigidity” has no place and “compromise” becomes the Mantra of the negotiating mechanism. It is also important that EU follows the developments in the free trade negotiations between India and Britain, and how the two are set to finalise FTA framework by October.

India’s stakes in EU Green Deal

Adequate response to face the challenges of climate change requires transitional and adaptive policies and it is important for EU and India to redesign their existing cooperation. The European Green Deal offers an unequivocal and binding commitments on climate action, thereby breaking the quandary inherent to climate transitions. With this bold initiative, the EU can shape new types of diplomacy and incentivize climate action across the globe with credibility. The EU Green Deal is an opportunity to strengthen EU-India partnership and foster ties between them in areas that are not yet adequately explored. These include clean technologies, enhanced cooperation for technology development and transfer, increased investment in sunrise sectors, knowledge sharing and cleaner finance. As India aims to become a net-zero economy by 2070 and has set a target of installing a non-fossil energy capacity of 500 GW by 2030, India cannot afford not to be a part of this socio-economic and political progress. This new dynamic in India’s relationship with EU extends beyond trade in today’s world.

Trade and Technology Council

The formation of the Trade and Technology Council comes at a pivotal time in the EU-India relations. The TTC will provide the political steer and the necessary structure to operationalize political decisions, and report to the political level to ensure implementation and follow-up in areas that are important for the sustainable progress of European and Indian economies. It will help to strengthen the strategic partnership and leverage the relationship to address global challenges, including the rise of China.

The TTC will be instrumental in coordinating EU and Indian approaches to key issues like artificial intelligence and global supply chains and encourage the spread of democratic and market-oriented values. The Council, through its Working Groups, will help EU and India resolve issues on tariffs, and counter non-market, trade distortive practices in their free trade negotiation. This strategic coordination mechanism offers both sides to work on fields such as 5G, artificial intelligence, climate modelling and health-related technology. This mechanism will also help cooperation by expanding access to digital tools for small-and medium-sized enterprises and will secure critical supply chains such as semiconductors. Critical areas of collaboration which will be important are the emerging technology standards, climate and clean tech objectives, competitiveness, and the misuse of technology threatening security and human rights. In many ways, the setting up of the TTC is a recognition of India’s increasing political importance in an uncertain global strategic environment but the challenge for India will be to capitalize on this value in economic terms.

EU and Indo-Pacific

As EU seeks to engage deeper in the Indo-Pacific, strengthening partnership with India will be crucial. With the rise of China, the EU needs a powerful alliance and a stronghold in the Indo-Pacific security architecture. Also, the speed with which the EU is reshaping its Indo-Pacific agenda speaks of realisation how China aims to increase its pre-eminence within the established world order, and even fundamentally revise it. Therefore, Europe’s new strategic orientation towards India in the Indo-Pacific and India’s priority towards maintaining its strategic autonomy with Europe will help build a robust relationship.

Notwithstanding the above challenges, the growing realities in EU-India relationship offers more than a foundation of mutual benefit rather it offers a strong commitment for reinforcing a rule-based order in the Indo-Pacific region. Democracy has also been a realm of strategic relations between them and working together they can collectively change the geo-political and economic dynamics of the new global order.

As India celebrates seventy-five years of its Independence; the celebrations called ‘Azadi Ka Amrit Mahotsav’ is a dedication towards the people of the country who have been instrumental in bringing India thus far in its evolutionary journey and hold within them the power and potential to take forward the dreams of every Indian, catalysed with the spirit of Atmanirbhar Bharat (Self-reliant India). Also, as EU and India celebrate sixty years of their bilateral relations, this is a “defining moment” in their relations which will shape the future of India-EU relations. The success of this will depend upon their ability to transform themselves and their preparedness to share their values and ethos.

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