INDIA-EU STRATEGIC PARTNERSHIP AND BILATERAL RELATIONS

GS2 INTERNATIONAL RELATIONS

The India-European Union (EU) relations have grown steadily, with both sides committed to building a mutually beneficial partnership. Recent discussions, led by the Minister of Commerce and Industry, aim to strengthen the strategic and economic ties between India and the EU by focusing on shared values, trade, and technological cooperation.

Six Broad Principles for Enhancing the Partnership:

1. Focus on Common Values:
   • Both India and the EU share a commitment to democracy, the rule of law, and an independent judiciary, which form the foundation for their partnership.
2. Commercially Meaningful Trade Agenda:
   • Efforts will be made to create a fair and equitable trade agenda that addresses trade barriers and promotes a more open and transparent trading environment.
3. Harmonizing Standards:
   • There is a focus on exchanging best practices and harmonizing standards to achieve zero defect and zero effect production capabilities, ensuring sustainability and quality in production.
4. Technological Cooperation and Supply Chains:
   • Both nations aim to develop cutting-edge technologies, secure critical raw material supply chains, and build resilient supply chains to ensure economic stability and innovation.
5. Sustainable Development Cooperation:
   • India and the EU will work towards cooperation in trade and sustainable development, adhering to the principle of Common but Differentiated Responsibilities (CBDR), ensuring that actions are taken according to respective capacities.
6. Mutual Growth and Development:
   • The partnership is designed to foster mutual growth and development, ensuring benefits for both parties, particularly in emerging industries and sectors.

Significance of the EU for India:

1. Concerns Regarding China:
   • India views its growing relationship with the EU as essential in countering China’s global expansion through initiatives like the Belt and Road Initiative, military adventurism in Asia, and perceived misuse of the multilateral trading system.
2. Economic De-risking:
   • India is heavily dependent on China for strategically important inputs and has a large and growing trade deficit with China. Strengthening ties with the EU can help mitigate these risks and offer diversification in economic partnerships.
3. Critical and Emerging Technologies:
   • The EU offers advanced capabilities in emerging technological fields such as cybersecurity, space exploration, quantum technology, and synthetic biology. These areas are vital for India’s long-term development and global competitiveness.

India-EU Relations: Background and Challenges:

1. Background:
   • The India-EU Strategic Partnership was signed in 2004, followed by the adoption of the EU-India Joint Action Plan in 2005, which focuses on political, economic, and development cooperation.
2. Economic Relations:
   • Bilateral trade between India and the EU is estimated at over $180 billion in 2023-2024. The EU is also a significant source of Foreign Direct Investment (FDI) in India, with total FDI estimated at $117.34 billion to date.
3. Challenges:
   • The India-EU Free Trade Agreement (FTA) has not yet been concluded, with disagreements over issues like labour standards, environmental regulations, and other trade-related matters hindering further progress.