India-EU Relations – Issues and Way Ahead
The 15th India-EU Summit, which was held virtually, saw very little progress in the boosting of the bilateral relationship. Previous summits, since 2000, have failed to address
India-EU Relations – Issues and Way Ahead
The 15th India-EU Summit, which was held virtually, saw very little progress in the boosting of the bilateral relationship. Previous summits, since 2000, have failed to address the differences between India and the European Union because, though they have had vast areas of discussions, they lacked political commitment from both sides. Notwithstanding numerous differences, the shared principles and economic potential can not only bringing change to the bilateral relationship but also the international order that is dominated by US-China tussle.
What is the European Union?
- The European Union (EU) is an economic and political union between 27 European countries.
- The EU’s predecessor is the then European Economic Community, created in 1958 to increase economic cooperation between 6 countries – Belgium, Germany, France, Italy, Luxembourg and the Netherlands.
- Since then, 22 more countries joined (and the UK left in 2020) the Union.
- The name change from European Economic Community to the European Union happened in 1993 to reflect the change from being purely an economic union to a broader alliance focusing on many other policy aspects like climate, health, external relations and security, justice and migration.
How did India’s relationship with the EU begin?
- The bilateral relationship between India and the EU dates back to the early 1960s, with India being one of the first countries to establish diplomatic relations with the European Economic Community.
- A cooperation agreement signed in 1994 took the India-EU relations beyond trade and economic cooperation.
- At the 5th India-EU Summit in 2004, the relationship was upgraded to a ‘Strategic Partnership’.
What is India’s economic relationship with the EU?
- The EU is India’s largest trading partner, while India is the EU’s 9th largest trading partner.
- The EU is the second-largest destination for Indian exports after the United States.
- The 27-nation EU, as a whole, was India’s largest trading partner in 2018.
- The bilateral trade in 2018-19 stood at $115.6 billion – exports were valued at $57.17 billion and imports at $58.42 billion.
- The EU’s share in foreign investment inflows to India has more than doubled from 8% to 18% in the last decade. This makes the EU an important foreign investor in India.
- The EU’s FDI stocks in India are significant.
- Around 6,000 European companies are present, providing directly 1.7 million jobs and indirectly 5 million jobs in India.
- Indian companies invested over €50 billion in Europe since the year 2000.
- India is benefiting from the unilateral preferential tariffs under the EU Generalised Scheme of Preferences (GSP), which links unilateral trade preferences with respect for human and labour rights.
What is the recent nuclear pact signed by India and the EU?
- Ahead of the 15th India-EU Summit, both sides have finalised civil nuclear cooperation agreement after 13 years of negotiations.
- The agreement is between the European Atomic Energy Community (Euratom) and Indian authorities.
- It focuses on cooperation between the EU’s research programmes on new ways of using nuclear energy and similar activities on the Indian side.
- It would involve collaboration in the civil nuclear energy sector, including research and development aimed at the peaceful use of nuclear energy.
- The Euratom-India agreement was signed by both sides’ leaders during the 15th India-EU Summit.
What are the highlights of the 15th India-EU summit?
- The 15th India-EU Summit was held virtually, with India being represented by Prime Minister Modi and the EU by Mr Charles Michel, President of the European Council and Ms Ursula von der Leyen, President of the European Commission.
- The leaders agreed to strengthen the EU-India Strategic Partnership based on shared principles and democratic values.
- They reiterated their support for multilateralism and a rules-based multilateral order with the UN and WTO at its core.
- They also decided to bolster cooperation at multilateral forums to reinforce international security and other aspects.
- Both sides will also enhance their partnership in support of sustainable modernisation by boosting cooperation to support the clean energy transition, resource efficiency and circular economy.
- The two sides agreed to explore concrete initiatives, including possible future comprehensive connectivity partnership between the EU and India and to seek synergies with third countries, including those in the Indo-Pacific region.
- As for addressing the coronavirus crisis, leaders agreed to further develop their trade and investment relations to make use of the opportunities during the crisis.
- They agreed to set up a regular High-Level Dialogue to enhance conditions of traders and investors.
- With regards to climate change, both sides welcomed the efforts under the Climate Energy and Climate Partnership and agreed to cooperate on its implementation.
- They agreed to launch a dialogue to reinforce maritime security, especially in the Indian Ocean, where 40% of the bilateral trade passes.
- Both sides agreed to enhance convergence between their regulatory frameworks to ensure high-level protection of personal data and privacy. They will upgrade their dialogue and cooperation on technology and engage in promoting global standards, safe and ethical deployme