India-EU Relations: Evolving A Vision for Future

          Indian and the European Union (EU) share multiple similarities of diversity in terms of languages, cultures and ethnicities. India is often cited as the world's largest democracy and the EU as the biggest union of democracies. In 1963, India was one of the first countries to establish diplomatic relations with the European Economic Community (EEC), EU’s predecessor. Since then, there have been several efforts to build cascading relations in different issue areas.

          One important initiative in this direction include the common Joint Action Plan (JAP) in 2005 and 2008 covering domains of trade, law enforcement, security, education and cultural exchanges. JAP was launched to realise the full potential of this partnership in the areas of mutual interest. Over the past few decades, the EU-India partnership has developed from a merely development-oriented partnership to a partnership with a clear focus on trade and economics. The engagement between both partners has also been gradually expanding from the economic to the political and security realms.

          Dating back to the early 1960s, the 1994 Cooperation Agreement governs the current bilateral relationship between the two and has resulted in sectoral dialogues, frequent ministerial meetings and annual summits between them. Since the EU identified India as one of its ten strategic partners in 2004 at their summit at the Hague, multilayered annual dialogues were initiated to explore and consolidate the same. The EU-India strategic partnership reflected India’s increasing importance for the EU.  

          Despite these developments, the EU-India strategic partnership is considered neither comprehensive nor strategic.   The EU-India strategic partnership is said to have failed to make any significant progress as both partners do not seem to agree on a manageable set of strategic priorities. This basically makes the status of the EU and India as strategic partner nothing but a rhetorical facade.

          Growing at around seven per cent with massive opportunities of wealth creation, India has already become an attractive destination for major economic players. EU would not like to miss the India bus. That is why, today India is the EU‘s eight largest trading partner, accounting for approximately 2.5% of EU’s total trade, while the EU is India’s largest trading partner representing 19% of India's exports and 14% of its imports. The bilateral trade in goods between the two increased to US$ 95 billion in 2013 and the trade in commercial services rose to US$ 31 billion in the same year.

          A recent study by the Europe India Chamber of Commerce (EICC) and the European Business and Technology Centre (EBTC) revealed that EU firms have emerged into becoming the largest inbound investors in India. The report further states that EU enterprises have invested $198 billion over a period of ten years, and have provided 1.5 million Indians with direct employment.

          There is optimism in the energy sector as well. According to a report, EU enterprises have already spent $118 billion on 2,566 Greenfield projects. Thus, having 12 million English-speaking Indian youth entering the job market every year and the EU’s innovative energy research, a EU-Indian collaboration in high-tech areas is set to complement each other.

          FDIs from the EU to India accounted for US$ 45.3 billion in 2013, thereby making the former one of the biggest investors in India’s growth. However, the European Commission still sees India as a "comparatively restricted" trade partner. The Ease of Doing Business Index, as published by the World Bank, ranked India at 130 of 189 countries. Since then, India has taken many positive steps and initiatives to improve the ease of doing business in India.

          Building on this relationship, the EU and India intend to increase their trade in goods, services and investment through the establishment of a Free Trade Agreement (FTA) between them. The EU and India have been negotiating a common Free Trade Agreement (FTA) called Broad-based Trade and Investment Agreement (BTIA) since 2007. The two partners have been inching closer towards this goal with every bilateral meet or negotiations. However, still a lot more needs to be done before FTA becomes a reality.

           Despite all these positive developments, EU-India relations are still underperforming compared to many other foreign relations of the two unions. This becomes obvious when looking at the EU’s and India’s stance with regard to multilateral governance. First of all, mirroring the worldview of BRICS countries and other emerging powers, India has divergent views on issues of global governance and multilateralism than those held by the EU.

          India strongly espouses respect for national sovereignty and prefers legally non-binding commitments agreed by consensus, while the EU is in general a strong proponent of powerful legally-binding international regimes and commitments. The EU encourages social protection, respect for the environmental and human rights, while India remains rather reluctant to let its economic growth and development be hamstrung by concerns about these issues.

          It is, however, notable that India, the world’s third largest emitter of greenhouse gases, formally joined the Paris Agreement i.e. COP21 (referring to the Conference of Parties Protocol that commits both rich and poor nations to rein in rising carbon levels and aims to eliminate greenhouse gas emissions from human activity) on Climate Change in October, 2016.

          The EU is in general pleased with the current system of multilateral governance, as the EU or European countries have privileged positions in most of the major global organisations including the UN Security Council, the WTO, the IMF and the WB while India remains underrepresented in these organisations and seeks to increase its international influence through various newly emerging power alliances such as the BRICS, IBSA and BASIC.

          Again, the positions of Brussels and New Delhi within the World Trade Organization (WTO) do not point to a true strategic partnership either. Despite the negotiations on a bilateral FTA, both India and the EU are often at loggerheads in the WTO on sundry matters of international trade. These are the areas deemed highly important for India’s economy including agriculture, textiles and services. Moreover, India opposes inclusion of core labour standards in WTO negotiations as it also opposes linking trade with environmental standards.

          A similar trend of diverging positions and interests between India and the EU could be noticed in their approaches at the United Nations. India has often noted with chagrin that it could not count on the full support of the EU and its member states for institutional reforms in the UN Security Council, in order to gain a permanent seat therein. On environmental issues, in the United Nations Framework Convention on Climate Change (UNFCCC), the 2009 Copenhagen meeting and many others pointed to lack of a true strategic partnership between the EU and India. India negotiated a deal together with the US and other emerging powers such as China, Brazil and South Africa only after sidelining EU.

          The divergence is conspicuous also with regard to foreign policy issues at the UN General Assembly (UNGA). An analysis of the voting cohesion demonstrates that in case of full EU cohesion (i.e. when all EU member states cast the same vote as India), the voting cohesion per annual UNGA session between the 27 EU members and India varies from 43% to 53%. This means that, overall, in half of the resolutions voted upon during an annual UN General Assembly session, the EU members and India cast split votes. An issue-based analysis shows differences in the degree of voting cohesion in several issue areas.

          It has been observed that in the vast majority of the UNGA resolutions concerning international security, both parties cast split votes. In case of full EU consensus on UNGA resolutions about human rights and development issues, the EU states and India took identical stands in approximately 30 percent of the resolutions voted upon. The only exception is the year 2005, when both parties voted as one in 47 percent of the resolutions adopted with vote. India and the EU members cast split votes on, e.g., the human rights situation in the Democratic Republic of Congo, Iran, Myanmar and North Korea.

          This limited degree of identical votes on human rights resolutions at the UNGA indicates that both parties can hardly be seen as like-minded partners on the issue. The EU considers human rights issues as highly important in its foreign policy and expects other democratic countries to take the similar position. However, the experience shows that the EU considerably differs with India, world’s largest democracy, on these issues despite the former having designated it as a strategic partner.

          The observation that India and the 27 EU member states do not cast identical votes on human rights issues in the UNGA can be explained by India‘s strong reverence for the national sovereignty of third countries to uphold the principles of non-interference and equality among nations. India considers these principles more important than the promotion of human rights and democracy which figure at the top of the EU’s normative discourse. The EU-India strategic partnership begun in 2004 does not yet seem to have helped them in overcoming their differing approaches.

          The EU still is not perceived as a vital factor in India’s foreign and security policy, which reflects the lack of common strategic interest between the two partners. The low visibility of the EU and the greater importance of bilateral relations with some of the largest EU states and other major powers including the US prove this. Besides the EU, India has strong relations with the UK, Germany, France and the Netherlands. This raises the question if some EU member states are strategically more important to India than the EU as a whole.

          Bilateral negotiations seem easier than consultation with the whole Union.  Against this background, one can hardly speak of a true partnership, let alone a strategic partnership, evolving between the two. A more constructive way to strengthen bilateral relations would be for both to zero in on a prioritized agenda containing strategically important issues and objectives to better synergise their actions to move gradually, firmly and strongly.

          A nation’s foreign policy is strongly influenced by the imperatives of its strategic environment, its perception of its neighbourhood and the perception of its own status in the international community. On the basis of the above, India has sought to engage and build multifarious relationships with European Union and the Commission. It is a relationship built on cooperation deeply anchored in mutually beneficial economic agreements.

         The European Maritime Security Strategy is optimistic that EU´s pre-existing maritime security cooperation with India will flourish. On the bilateral level, the Konkan series between the Indian Navy and the Royal Navy of Britain is a success story, and similar exercises will hopefully continue to thrive, as well as other exercises between the European and Indian Navies.

          It is important to encourage capacity-building in smaller countries in the Indian Ocean in order to strengthen regional emergency preparedness and capacity to resist maritime threats, like piracy, illegal arms trafficking and terrorism, among others. Reinforcing the EU-India maritime security partnership is mutually beneficial, as the EU wants to secure its commercial shipping, while India looks for strategic equities and improved maritime influence.

          Although EU-India relations are stable, both the partners need to address the challenges and opportunities to expand and intensify bilateral cooperation though there continue to be some sticking points. For example, India would like the EU to address visa regulation challenges for Indians who seek access to the European labour market. The EU has urged India to reduce the taxes on car imports as well as a liberalisation of the hurdles for Foreign Direct Investment (FDI).

          India has been upset in the past with Europe’s insistence on human rights and sees it as interference in its internal affairs. However, giving up the human rights clauses in FTAs with other countries would betray the European idea of a peace project. The EU has recently welcomes the economic and trade initiatives by the new government in India and hopes to take advantage of latter’s desire to invite foreign investment and technologies by providing more ease of doing business.

India, too, can benefit from the EU's know-how and can derive immense benefit by supporting the EU in terms of maritime security, counter-piracy and counter-terrorism. Both the EU and India are multilingual, multiethnic, multi-religious and multicultural societies and believe in the common values of peace, democracy, tolerance, non-discrimination freedom of speech and respect for human rights. Therefore, it is important to encourage more people-to-people contacts to build on mutually beneficial relations in a world of complex interdependence.        

India and the EU do not need to reinvent policies and should work towards strengthening the existing ones. The visibility of the EU in India has to be increased and this would require efforts from both sides. India can interact with the EU member states as well as EU as a whole. It need not choose one over the other as both the relationships can be pursued simultaneously. However, the EU has to decide about the future of its existence. Merely having a Joint Action Plan is not enough to sustain the India-EU relations. There is a need to move beyond that to further develop their bilateral relationship in a globalised world.

Globalization and India-EU Relations

In this era of globalization, the only way states can safeguard their interests is by cooperating with like-minded partners. It is believed that the main objective of democratic politics is to provide security to the people. The people also hope for prosperity, for which the prerequisites are socio-economic growth, social responsibility and efficiency. Even in Europe, people are afraid that their social status might be undermined by competitors from beyond their borders. They demand minimum standards for environmental protection, human rights, and minimum wages for employees to keep a check on cheap imports from developing countries.

The developing countries in turn are concerned about the domination of big international players, unpredictability of international financial transactions and the consequences for their own economic and social situation. However, there is a need to accept the realities of globalization and recognize its opportunities and requirements. The problems resulting from globalization can be effectively dealt with an efficient system of international cooperation and multilateralism.

Placing EU-India relations in the context of globalization, both India and EU should reinforce their strategic alliance for the promotion of an effective multilateral approach, peace, security, human rights and democracy in the world. Efforts should be made to promote intellectual and cultural ties through the development of parliamentary, academic and cultural exchanges. These would require India and the EU to streamline their institutional architecture. Globalization requires collective political management and strong international cooperation to tide over complex global challenges.