The European Union and India – An Appraisal


Ranir Pal Saini presents an appraisal of the India-European Union relationship post the highly-successful official visit of Prime Minister Narendra Modi to France and Germany

Prime Minister Narendra Modi, perhaps one of the most frequent flyer prime ministers that India has ever had, hit the foreign trail once again in April, this time to France, Germany and Canada. His tour could well have covered the United Kingdom and Belgium, but the same could not be possible due to the upcoming general elections in United Kingdom and non-finalisation of dates for a summit with the EU. It is against this backdrop of his visit to Europe and Canada that we need to appraise the India-EU relationship.

India-EU Relationship Pre-2000

The India-EU relationship dates back to the early 1960s when India became one of the first countries to establish diplomatic relations with the EU predecessor, the European Economic Community, in 1962. Trade and commerce were the bedrock of India-EU relations up to the fall of the Soviet Union as can be ascertained by the first Agreement between India and the European Community signed in 1973, which was later developed into the Agreement for Commercial and Economic Cooperation signed in 1981. Political dialogue between India and the EU started as long back as 1983.

After signing of the Maastricht Treaty, the EU entered into a broader political dialogue with India, the legal basis of which is formed by the 1993 Joint Political Statement and the 1994 Co-operation Agreement. The 1994 Co-operation Agreement formed the groundwork for deepening India-EU relations on the basis of expanding ties from previously covered areas of economic co-operation and trade to broader areas of political dialogue in industry and services, the private sector, energy, information and communication technology, space technology, standards, intellectual property, investments, agriculture and fisheries, tourism, science and technology, information and culture, developmental cooperation, environment, human resource development, drug abuse control, and, south-south and regional cooperation. Institutionally, the Co-operation agreement retained the Joint Commission – set up in the 1981 agreement – that would meet every year to carry forward the relations in the framework of the 1994 agreement.

India-EU Relationship Post-2000

India and the EU began with their annual summits in 2000 when the then Prime Minister Atal Bihari Vajpayee flew to Lisbon, becoming the first prime minister of India to visit Portugal, at the time it was holding the EU presidency. The summit was meant to give a political colour to the rapidly expanding economic ties between India and the EU. EU at the time already had a mechanism of regular summit level meetings with the other two major Asian powers, Japan and China. Notwithstanding India’s excellent bilateral relations with most of the major EU member countries, there was definitely a need to have a broader political engagement between India and the EU, as the EU en bloc happened to be India’s largest trading partner. The summit could have been seen as a one-off event, save that on the suggestion of Portugal’s presidency of the EU, it was incorporated as a regular feature and mechanism of the India-EU relationship. The institutionalisation of India-EU relationship through annual summits could also be construed as recognition of India’s emergence as a regionally and globally relevant power. Since then, there have been 12 such annual summits in addition to regular meetings at the level of ministers and departmental/ministerial secretaries.

The watershed in post-2000 EU-India relations came at the 5th annual India-EU summit held at The Hague in November 2004 wherein both parties decided to upgrade the relationship to a ‘Strategic Partnership’. It was the EU, which through a communication from the European Commission, first proposed the ‘EU-India Strategic Partnership’. A Joint Action Plan was developed in 2005, and revised in 2008, through which India and the EU have strengthened their association and cooperation in a wide spectrum of international and domestic themes by way of upgraded comprehensive dialogue and consultation mechanisms. Significantly, it was the 7th India-EU summit at Helsinki in 2007 in which the recommendations of the High Level Trade Group to work on a broad-based Bilateral Trade and Investment Agreement was accepted by both sides. Another significant development in the relationship occurred at the 11th India-EU Summit at Brussels, this time on the security front, when both parties adopted the Joint Declaration on International Terrorism affirming to undertake joint efforts multilaterally to combat terrorism as well as cooperate bilaterally to enhance their respective security capabilities.

Current State of India-EU Relationship

The India-EU strategic partnership comprises an annual summit, an annual ministerial meeting, 27 sectoral dialogues, and three other platforms of dialogue for business bodies, parliamentary representatives and civil society. The 12th annual India-EU Summit was held in New Delhi on February10, 2012, which was the first annual India-EU Summit to be held in India after the entry into force of the Treaty of Lisbon. The latest meeting between the two parties at the level of heads of state took place on November 14, 2014 on the sidelines of the G20 summit in Brisbane. The latest sitting of Foreign Policy Consultations at the level of secretaries was held in January 2014. The latest meeting between India’s Minister of External Affairs and EU’s High Representative for Foreign Affairs and Security Policy took place on the sidelines of the 11th ASEM Foreign Ministers’ Meeting in November 2013 in India.

An India-EU annual summit has not been held since 2012, which is a gap of more than 3 years, the first such gap since the institutionalisation of the India-EU relationship in the form of annual summits. Meetings at the highest three levels of officials have become limited to the occasional meeting at the sidelines of multilateral fora. Negotiations on the India-EU Bilateral Trade and Investment Agreement too have remained stalled since 2007. The volume and nature of trade and investment between the two sides has also not shown any remarkable change in the last three years. And the output on cooperation in international and domestic themes is too indeterminate to be interpreted conclusively.

While too much should not be read into this slowed pace of diplomacy, as both India and the EU went through their parliamentary elections in April/May 2014 and a new commission took over at the European Commission in November 2014, one cannot deny that all is not well in the relationship. India had proposed dates for the 13th India-EU Summit in Brussels, Belgium to coincide with Prime Minister Narendra Modi’s visit to France and Germany in April this year, but the summit could not materialise due to lack of an affirmative response to India’s proposed dates from the European Commission. Suggestions in the press indicate that the European Commission’s delay in confirming dates for the summit could be related to the case of the two Italian Marines who are detained in India awaiting trial over the killing of two Indian fishermen in February 2012 off the coast of India. The consistent raising of this issue by Members in the European Parliament, passing of a strong resolution in the European Parliament in January demanding release of the two Marines, raising of the matter by the Italian Foreign Minister in the Foreign Affairs Council of the Council of the EU, as well as strong statements on the issue from the High Representative of the EU for Foreign Affairs and Security Policy, Frederica Mogherini, give credence to the suggestion that the snub could be deliberate.

India-EU Bilateral Trade and Investment Agreement (BTIA)

The stumbling blocks in an India-EU BTIA centre on India’s insistence in providing Indian businesses as well as professionals from the ITES, BPO and KPO sectors access to the EU internal market. Whereas the EU insists that India provide access to its market to EU businesses engaged in accounting services, legal services, insurance, banking and multi-brand retail. Another area of contention is agriculture, poultry, dairy and fisheries wherein the EU heavily subsidises these sectors. India insists on the EU to cut back on these subsidies. Opening up of Government Procurement in India to EU businesses is another major issue for the EU, as Government Procurement in India is considered opaque and discriminatory for foreign businesses. Other major points of contention involve India’s Intellectual Property Rights regime, heavy import duties on EU manufactured automobiles and wines and spirits.

It is imperative on the part of both India and the EU to restart negotiations on the BTIA as soon as possible. For India, any further delay in negotiating a deal will be a lost opportunity to align India’s trade competitiveness with its competitive advantages. The new government in India under Prime Minister Narendra Modi’s leadership will have to review the latest positions in the negotiations and bring out a stance in alignment with the new domestic economic programs of the government. A remarkable development that can enable India to rework its position on the BTIA has been the issuance of a new Foreign Trade Policy by the Government of India. A BTIA with the EU will present trading opportunities which otherwise will be difficult to negotiate piecemeal with each of the 28 EU member countries. The international trade landscape may be at the cusp of a major change. The Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership threaten to up end the current order of international trade relationships at the systemic and normative levels. India has to walk a tight rope in reconciling its short and medium term trade interests with the long view.

The Way Ahead

It cannot be denied that the welfare of the two Italian Marines detained in India is not of legitimate concern to the EU, or that pursuing safety of EU member countries’ civilian and military personnel imprisoned or detained in third countries does not form a part of the Common European Security and Defence Policy. Whatever is the case regarding the link between the issue of the two Italian Marines and the actions of the European Commission in relation to conduct of diplomacy with India, the progress of the broader diplomatic relationship should not be held hostage to issues that can be resolved through regular diplomatic dialogue. It is very unfortunate if the EU out of its own volition or Italy using its leverage in the EU is making progress in diplomatic relations between India and the EU contingent on India’s actions on the Italian Marines’ issue.

India and EU have a relationship that is built on a common ideological pedestal of respect for democracy, human rights, rule of law and multilateralism. There is no substantive issue on which the two parties can be remotely expected to have a confrontational stance. Other than the issue of the Italian Marines, the only other foreign policy issue in relation to India that could be of concern to the EU is India’s sympathetic stance towards Russia’s position on the Ukraine crisis. The way ahead is mutual respect for each other’s positions on their respective interests and priorities.

Moreover, one has to appreciate that the EU is going through multiple crises on the home front, which include, but are not limited to, international terrorism, radicalisation, the Greek debt crisis, the Ukraine crisis, relations with Russia, influx of illegal immigrants and refugees from West Asia and North Africa. Appreciation of the multiple crises that EU is facing must give way to patience in expecting reciprocal action from the EU in the India-EU relationship.

Coordinating and evolving a consensus and common actions on international issues will be a matter of respective positions and interests of the parties. Outcomes in the sphere of development aid and bilateral partnerships in domestic themes will be very much contingent on the respective parties’ administrative capacities and organisational effectiveness. Therefore, the way ahead for upgrading the strategic partnership to the next level is restarting and concluding negotiations on a Bilateral Trade and Investment Agreement. Trade has an unmatched ability to bring societies politically and economically closer. A Free Trade Agreement between India and the EU will give their people greater opportunities to develop and prosper, bring the two societies closer, and align their respective interests.

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