Deepening India-Europe Engagement

General Studies Paper-2

Context

External Affairs Minister S Jaishankar’s second visit to Europe within a month reflects a deepening India-Europe engagement.

India-EU Relations

• Political cooperation: India-EU relations date to the early 1960s, and a cooperation agreement signed in 1994 took the bilateral relationship beyond trade and economic cooperation.
  • The first India-EU Summit, in 2000, marked a landmark in the evolution of the relationship.
  • At the 5th India-EU Summit at The Hague in 2004, the relationship was upgraded to a ‘Strategic Partnership’.
• Economic cooperation: India’s bilateral trade in goods with the EU was USD 137.41 billion in 2023-24, making it the largest trading partner of India for goods.
  • EU is India’s largest trading partner for goods, 17% of India’s exports go to the EU and 9% of EU exports come to India.
• India-EU Free Trade Agreement (FTA) Negotiations:
  • Negotiation Resumption: Talks resumed in June 2022 after an 8-year hiatus (stalled in 2013 due to market access disagreements).
  • Objective: To finalize a comprehensive trade agreement covering goods, services, investments, and geographical indications.
• Negotiation Structure: The agreement will be concluded in two phases, following India’s phased approach used in previous FTAs (e.g., with Australia).
  • This is partly due to the volatile global trade environment, including US tariff actions.
  • Prime Minister Narendra Modi and the European Commission President agreed to seal the deal by the end of this year.
• Other areas of cooperation:
  • The India-EU Water Partnership (IEWP), established in 2016, aims to enhance technological, scientific, and policy frameworks in water management.
  • 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.
  • India and the EU established the Trade and Technology Council (TTC) in 2023. The TTC is a forum for the two parties to collaborate on trade, technology, and security. The TTC’s goals.
• India’s Two Levels of Engagement
  • EU as a bloc: Regular summits, strategic dialogues on trade, tech, security, foreign policy.
  • Bilateral with major EU members: Deepening ties with France, Germany, Nordic and Eastern European countries.

Issues/Factors Shaping India-Europe Relations

• Geopolitical Shifts and Strategic Autonomy: Return of war in Europe (Russia–Ukraine) and the global erosion of multilateralism.
  • Europe seeking greater strategic autonomy from the US (especially post-Trump era).
  • India aims to maintain a multipolar world order while diversifying its partnerships beyond the US, Russia, and China.
• Trade and Economic Cooperation: EU is one of India’s largest trade and investment partners.
  • India and EU are keen on concluding India–EU Free Trade Agreement (FTA) and Investment Agreement.
  • IMEC (India–Middle East–Europe Corridor) provides opportunities for the strategic connectivity and trade.
• Technology and Digital Sovereignty: Both have the shared interest in promoting digital technologies as public goods.
  • India can benefit from Europe’s strengths in deep tech, semiconductors, digital manufacturing.
• Defence and Strategic Cooperation: Europe is a key arms supplier to India.
  • India seeks joint development, co-production, and technology transfer.
  • Europe is rearming due to the Ukraine war; India is pursuing Atmanirbharta (self-reliance).
• Mobility and People-to-People Ties: Need for a high-ambition mobility agreement to promote student and academic exchanges, research partnerships.
  • Skilled migration and tech workforce integration.
• Indo-Pacific and Maritime Strategy: Europe increasingly views the Indo-Pacific as a strategic priority.
  • India is working with France, Germany, and others to promote free and open Indo-Pacific.
• Shared goal: Prevent coercion by any hegemonic power (implied reference to China).

Europe’s Internal Challenges

• Political Fragmentation and Rise of Nationalism: Increasing polarisation within EU member states.
  • Rise of right-wing populism and Euroscepticism (e.g., in Hungary, Italy, Poland).
  • Despite Brexit, these forces challenge EU unity and the idea of European integration.
• Economic Strains: Inflationary pressures, energy crises post-Ukraine war, and post-pandemic recovery.
  • Supply chain vulnerabilities and deindustrialisation risks due to reliance on external sources.
  • Pressure to achieve digital and green transitions while maintaining economic competitiveness.
• Immigration and Identity Crisis: Europe is facing uncontrolled immigration from Africa, West Asia, and Eastern Europe.
  • This is causing strain on public services and rise of xenophobia and anti-immigrant politics.
  • There is a cultural anxieties over national identity vs European values.
• Institutional and Policy Faultlines: Divergences among member states on issues like defence spending, fiscal policy, migration burden-sharing.
  • Frictions in EU governance, especially between Western and Eastern Europe.
• Defence Dependence and Strategic Autonomy: Long-standing dependence on US and NATO for defence.
  • The need for a unified European security policy grows amid US unpredictability and regional threats.

India’s Role in Addressing Europe’s Internal Challenges

• Strategic and Defence Partnership: India’s defence procurement and co-development with France and other European nations supports Europe’s defence industry.
  • Shared interest in strategic autonomy and multipolarity aligns with Europe’s need to reduce US dependency.
• Economic and Trade Cooperation: India is a fast-growing market for EU exports and a source of affordable, skilled labour.
  • Concluding the India–EU Free Trade and Investment Agreements can help diversify Europe’s economic partnerships.
  • India is central to the success of IMEC (India–Middle East–Europe Corridor), helping secure long-term trade and energy routes.
• Migration and Mobility: Europe’s ageing population needs skilled workers; India’s young workforce can help address this through bilateral mobility partnerships, academic exchanges, especially in STEM.
• Digital and Technological Cooperation: India offers trusted partnerships in digital public infrastructure, AI governance, and cybersecurity.
  • Both share a vision of tech as a public good.
  • Indian IT and innovation sectors can enhance Europe’s digital competitiveness.
• Green Energy and Sustainability: India’s leadership in solar energy, biofuels, and green hydrogen aligns with Europe’s green goals.
  • Partnerships in climate finance, clean energy tech, and sustainable agriculture help the EU meet green targets.
• Multilateralism and Rule-Based Order: India supports multilateral reforms (e.g., UN, WTO) aligned with EU values.
• In a fragmented world, both India and Europe can co-lead coalitions based on norms, not coercion.

Challenges in the India – EU Relations

• India’s Stand on Ukraine War: Europe expects India to be more critical of Russia; India maintains strategic neutrality.
• EU’s Stand on Pakistan and Terrorism: India expects the EU to hold Pakistan accountable for state-sponsored terrorism — especially given Europe’s own experience with Islamist terrorism.
• Slow Progress on Trade Agreements: The India–EU Free Trade Agreement (FTA) negotiations, started in 2007, have faced multiple deadlocks.
• Carbon Border Adjustment Mechanism (CBAM) imposed by the EU creates additional trade barriers for India.
• Human Rights and Normative Pressure: EU often adopts a prescriptive stance on India’s internal matters (e.g., Kashmir, CAA, farm laws).
• India views this as interference in domestic affairs, causing diplomatic friction.
• Regulatory and Standards Barriers: EU’s strict regulations on data privacy, digital taxation, environmental standards, and labour laws are hurdles for Indian exporters and tech firms.
• Media stereotypes and limited public awareness in Europe with respect to India hinder people-to-people ties.

Way Ahead

• Fast-Track Trade and Investment Agreements: Conclude the long-pending India–EU Free Trade Agreement and Investment Protection Agreement.
• Deepen Strategic and Defence Cooperation: Move beyond buyer-seller relationship to joint development and co-production of defence technologies.
• Expand Mobility and Education Partnerships: Finalise a comprehensive mobility agreement for skilled professionals, students, and researchers.
• Build Resilient Supply Chains: Diversify away from China by promoting trusted, transparent supply chains.
• Leverage initiatives like IMEC (India-Middle East-Europe Corridor) for logistics, energy, and trade.
• Enhance People-to-People and Cultural Ties: Promote tourism, media engagement, and cultural exchanges to break stereotypes and deepen mutual understanding.