India Europe relations ― the Way Ahead

Bilateral relations between India and Europe, dates back to 1960s when India was among the first nations to establish relations with what’s now the European Union (EU). The EU is India’s single largest trading partner and accounts for over 20 percent of Indian trade. India, however, accounts for a little over two percent of trade with EU and attracts a paltry 0.3 percent of European foreign direct investment.

India-EU relations

While negotiations for the India-EU free trade agreement (FTA) are on its final stages, it’s evident that Europe’s focus, till now, has been heavily biased towards China. With India’s growing clout as an emerging economic major, the EU has so far, missed a valuable opportunity which could have served to strengthen it’s own economy as also augur well for the economy of India. But better late than never.

Challenges of climate change and clean energy remain particularly important for both India and EU. Differences are bound to crop up with EU being the more developed side but strategies to develop a decarbonized economy are the need of the hour. The two sides face the biggest difference in opinions over usage of nuclear energy, which has strong support in India. Yet untested but renewable sources of energy, like methanol, could hold the key to cleaner energy.

Security issues continue to feature high in all India-EU dialogues. Perspectives have been placed on pertinent matters including New Delhi’s relationship with Islamabad, the input of India and EU in Afghanistan as well as the internal dynamics of the Kashmir conflict. Both sides have been able to recognize a key impediment in India-EU relations whereby India is usually more comfortable in dealing with members states of the EU on a bilateral or individual basis, especially on security matters. This also holds true for arms deals.

Reviewing the efforts of both the sides in developing bilateral strategic partnership in the last decade, it can be said that politics, cooperation and dialogue between India and the EU have enhanced via exchange of visits and regular summits. As regards economy, joint investments have augmented dramatically in the recent years. Dialogue in financial services and macro economic policies has forged cooperation in science and technology, energy and environment issues.

It’s expected that the two sides, in the coming years, will enhance dialogue and consultation as regards human rights under the UN framework. Though a recent resolution approved by the European Parliament on FTA has asked India and EU to ensure that a dialogue on “open issues” is construed with specific reference to Kashmir, Thomas Matussek, German envoy to New Delhi, said that the Kashmir issue, “in my view, doesn’t have any bearing on the FTA.” As such, the long overdue agreement needs to be realized as early as possible. Then the present trade volume of $72 billion could well transcend $100 billion over the next five years.

The two sides should also forge cooperation in global peacekeeping missions, fight against terrorism and proliferation of arms and promote exchange and cooperation to develop civil nuclear energy.

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