India-EU Relations

Why in the News?

India celebrates 60 years of diplomatic relations with the European Union (EU).

Key Points:

Areas of cooperation:

• Economic Partnership: Bilateral trade between the two surpassed $116 billion in 2021-22.
  • The EU is India’s second largest trading partner after the U.S., and the second largest destination for Indian exports.
  • India enjoys preferential tariffs under EU Generalised system of Preference(GSP). 
• Energy: Finalised civil nuclear cooperation agreement (European Atomic Energy Community)
• Green Strategic Partnership: India and Denmark aims to address climate change, biodiversity loss and pollution
  • The India-Nordic Summit in May focused on green technologies

• Defence sector: India and the EU regularly conduct joint military and naval exercises which reflects their commitment to a free, open, inclusive and rules-based order in the Indo-Pacific.
  • The first maritime security dialogue in 2021 focused on cooperation in maritime domain awareness, capacity-building, and joint naval activities.
  • France’s on-time delivery of 36 Rafale fighter jets and willingness to offer Barracuda nuclear attack submarines to the Indian Navy reflects the growing level of trust.
• Science and technology: It focus on areas such as healthcare, Artificial Intelligence, and earth sciences.

Other areas of cooperation:

• Effective implementation of the Paris agreement.
• Start-up and innovation ecosystem across India and Europe.
• Offshore wind and solar infrastructure
• Clean Ganga initiative

Challenges: 

• Differing opinions and divergent interests: India’s reluctance to condemn Russia for the Ukraine crisis is not agreed upon by the EU, 

• For both India and the EU, China forefronts a major challenge that requires specific attention. 
• There is an ambiguity on the EU’s strategy in tackling the rise of China.
• Delay in signing proposed Broad-based Trade and Investment Agreement (BTIA).
• Fit for 55 agenda, presents challenges for Indian industries.
  • It is EU 2030 goal of reducing emissions by 55% from 1990 levels.

Way Forward: 

• India’s economic, political and demographic weight could be leveraged by the EU to counterbalance China’s influence across the region.
• For that, the resumption of the ambitious India-EU free trade and investment agreement in 2021 is a step in the right direction.
• India and the EU should renegotiate the trade deal and trust each other not only to promote rules-based multilateral order in the Indo–Pacific but also to achieve other strategic ambitions.
• With the rise of multipolarity both sides can elevate their strategic partnership to find solutions for impending geopolitical challenges.
• Need to build cooperation on data protection and regulation.
• Human connectivity and digital connectivity can be the newer areas of cooperation.