India-EU Relations (GS2: International relations)
History and progress
India-EU relations date to the early 1960s, with India being amongst the first countries to establish diplomatic relations with the European Economic Community.
A cooperation agreement signed in 1994 took the bilateral relationship beyond trade and economic cooperation.
At the 5th India-EU Summit at The Hague in 2004, the relationship was upgraded to a ‘Strategic Partnership’.
The India-EU Science and Technology Steering Committee meets annually to discuss S&T cooperation.
India and the EU set up an Energy Panel in 2005 for greater cooperation in the critical sector of energy and energy security.
The EU as a bloc of 28 countries is India’s third largest regional trading partner while India was the EU’s 9th largest trading partner in 2018-19. India’s overall bilateral trade with the European Union for the period 2018-19 was 115.64 USD billion. The EU continued to be one of the largest sources of Foreign Direct Investment (FDI) for India with FDI valued at USD 609.84 billion from Apr 2000-March 2017.
Amongst India’s exports to the EU, the top goods and services include gems and jewellery, apparel and textile, machinery, organic chemicals, iron and steel, automobiles, mineral fuels and pharmaceuticals.
On the other hand, major imports from EU include machinery and equipment, gems and jewellery, auto, plastics and organic chemicals.
Issue affecting the ties between Indian and EU
The ambitious start in 2007 of efforts to negotiate a broad-based trade and investment agreement stalled in 2013 and hasn’t shown any progress since then.
Questions have been also been raised in EU business circles over the slowing down of economic reform in India.
Serious concerns were expressed in the European Parliament recently over India’s passage of the Citizenship (Amendment) Act.
Scope for harnessing the untapped potential between India and EU
As the world moves away from a global supply chain that is overly dependent on China, India emerges as the most natural ally for the EU in this regard.
Europe’s dependence on Asia for life-saving health goods has been starkly revealed during the current pandemic. With India’s vast drug manufacturing capabilities and the EU’s technical expertise, a partnership between the two for the exchange of ideas, innovations, and capabilities in the health sector will benefit both regions.
As the 5G debate rages, Cooperation between India and the EU in information and communications technology (ICT) sector could range from building strategic autonomy in the digital sphere to investments in emerging and disruptive technologies as it is vital for enhancing cyber security threats across the world.
EU and India should seek out ways to converge technological safety protocols, privacy provisions, and investment screening approaches especially at a time when global dividing lines are epitomized especially by discussions on 5G and associated lock-ins on infrastructure, standards, security protocols, and the potential weaponisation of technological interdependence.
 It would also be prudent to jointly promote democratic principles by way of recognition of data protection equivalency which would enable data transfers that are necessary for the development of digital industries as well as with the help of institutions like the Global Partnership on Artificial Intelligence and the D-10 (G-7 countries plus Australia, South Korea, and India, and other like-minded democracies) alliances to abide by shared standards.
Technology and climate are top priorities to both EU and India as both cannot achieve them alone.
In the area of climate, the Paris Agreement and EU-India Clean Energy and Climate Partnership provide a foundation to build on.
The EU-India agenda here should include the promotion and de-risking of investment in renewable energy and green technology, the channeling of post-COVID-19 stimulus into green infrastructure, joint research and development, and business-to-business cooperation to contribute to the green transition.
India, however, needs to forge new relationships in a post-Brexit EU to advance its own policy aims and better capitalise on an underutilised partnership with the EU.
Options for bolstering these industries include talent exchanges, the facilitation of work permits for students and professionals, rules on reciprocal market access for businesses, joint innovation initiatives, and funding for joint research projects.
Currently, India’s relationship with the EU is underutilized and has not reached its full potential as compared to the US.
The EU-India Strategic Partnership is based on people to people contact, shared values, and these values are becoming more salient given the unprecedented threats facing the rules-based multilateral order.