So near yet so far: the EU and India

History

Relations between the European Union(EU) and India date back to the early 1960s with India being one of the first countries to establish diplomatic ties with the then European Economic Community (EEC). However, it was the 1994 co-operation agreement between the EU and India which took the bilateral relations to a different level. This was preceded by the Joint Political Statement signed in 1993 which opened the way for annual ministerial meetings and a comprehensive political dialogue.

The Lisbon Summit in June 2000 marked the beginning of the India-EU Summits. A major landmark in the relations was the 2004 India-EU Summit in The Hague which endorsed the proposal to upgrade the India-EU relationship to the level of a “Strategic Partnership”.

In the initial years, the EU and India had differing viewpoints on their respective roles in the world. India, after independence, preferred to remain non-aligned, although its close ties with the erstwhile Soviet Union was not to the liking of many European nations. However, the end of the Cold War and the collapse of the Soviet Union accompanied by India's economic reforms initiated a gradual shift in the way the EU and India perceived and dealt with each other.

Areas of co-operation

The EU and India have common interests in many areas. In 2005, a Joint Action Plan (JAP) was launched at the Sixth EU-India Summit to implement the multi-dimensional EU-India Strategic Partnership. This committed the EU and India to strengthening dialogue and consultation mechanisms, deepening political dialogue and co-operation in areas such as pluralism and diversity; democracy and human rights; peace-building and post-conflict assistance; regional co-operation; nuclear non-proliferation; and the fight against terrorism and organised crime. The Joint Action Plan was revised at the Marseille Summit in 2008.

Other areas of co-operation include climate change and agriculture; sustainable development; research and technology; people-to-people contacts; and cultural exchanges.

Terrorism is a common area of concern for both the EU and India. The 2009 EU-India annual summit reaffirmed the need for co-operation for combating the scourge of international terrorism. The Joint Statement at the end of the summit announced measures for strengthening the UN Counter Terrorism Implementation Task Force (CTITF), enhancing negotiations between Europol and the relevant Indian agencies and noted EU’s support for India’s membership of the Financial Action Task Force (FATF).

The Indian economy is one of the fastest growing economies worldwide with a growth rate of between 8 and 10 per cent. The annual trade in goods between India and the EU for the year 2008 stood at €61 billion (1.9 per cent of EU’s total trade). The EU is India’s largest trading partner while India emerged as the EU’s 9th largest trading partner in 2008. In 2008, total Indian exports to the EU in the services sector stood at €7.94 billion and total Indian imports from the EU stood at €8.56 billion.

Areas of divergence

One of the problem areas in the relationship has been that Indian foreign policy has tended to traditionally concentrate on four large member states of the European Union, viz. France, Germany, the United Kingdom, and Italy. However, following the addition of more countries into the EU, especially the East European countries, India and Indian policy makers need to make an extra effort to build up linkages with the new member countries.

Recent years have seen many of the European countries get involved with security issues in the Afghanistan and Pakistan (Af-Pak) region. While India understands the concerns of many of the European nations who have contributed troops to the NATO-led ISAF(International Security and Assistance Force) in Afghanistan, there is a scepticism about the role that the EU can, and is willing to, play in the region.

With the US and the NATO forces already deciding on an exit strategy in Afghanistan, Indian officials are worried as to the grave implications it would have for security in the region, especially India’s security, particularly because the idea of reconciliation with the Taliban is a frightening prospect for India.

Besides these concerns, there are issues regarding India maintaining substantial tariff and non-tariff barriers on imports of goods from the EU.

India has also been upset by what it sees as European interference in India’s internal matters such as human rights issues, the Kashmir issue, child labour and the Gujarat riots. There is also a perceived tendency among some sections of Indian officialdom to look at the EU as a "has-been"; an organization way past its prime with an untenable welfare state.

The way ahead

The European Union has been a trusted partner in India’s development efforts, contributing funds to tackle poverty, improve healthcare and provide access to good education in India. In recent years, co-operation has increased to such areas like civil aviation, solar energy, research on nuclear fusion and ITeS (IT enabled services). There are many ways in which India and EU can give a fillip to their ties.

First, there has been an enormous focus in India’s foreign policy to developing closer ties with the United States to the detriment of its ties with other countries and blocs like the EU. Indian foreign policy mandarins need to realise that putting all their eggs into one basket is not a prudent strategy.

Second, the EU also needs to overcome its China fixation. China is presently the EU's 2nd largest trading partner and the biggest source of imports. The EU is China's biggest trading partner. In 2009, EU exported goods worth €81.6 billion to China 2009 while importing goods worth €214.7 billion from China. However issues like human rights, democracy and workers’ rights have been pushed to the background as the EU courts a rising China.

Third, institutional linkages need to be developed between the EU and India which could include universities, think-tanks and research institutions.

Fourth, people-to-people ties need to be further enhanced. In the case of the improved ties between India and the United States, the Indo-American community in the US has played a key role, while this has not been the case for India-EU ties, even though there is a sizeable Indian community in EU member countries.

Finally, private sector linkages between Indian and EU industries are also very important to further the growth of India-EU ties.

India and the EU have a long way to go. The key lies in agreeing to disagree over some issues and yet move ahead with their ties.