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The 13th EU-India summit

By GovernanceToday
In International Relations
May 4, 2016

The summit made right noises and not much of substantive progress on contentious issues

EUINDIAThe relationship between India and the European Union (EU) has grown since its inception in 1963 and expanded significantly in the post Cold War era. However, this partnership has not achieved its potential partly because of the low political visibility of the EU in New Delhi and the strong bilateral relations between India and the major European powers. The European Union pushed to transform its relation with India in 2004 by establishing a Strategic Partnership. It is noteworthy that the context of EU-India trade has changed with the recent Euro zone crisis and slow growth rate in the European Union.

With the end of Cold War, both, EU’s and India’s common views on democracy, multipolarity and multiculturalism came together leading to enhanced economic cooperation and bilateral agreements.  Given the geopolitical changes that opened up both opportunities and challenges the EU had also reconfigured its Common Foreign and Security Policy (CFSP). Post 9/11, the EU recognized that its foreign policy needs new focused approach with partnerships. In the backdrop of Iraq war in 2003 the EU focused on presenting a coherent approach to peace and development by articulating the European Security Strategy (ESS) in 2003. Here it identified partnership as way forward. The rejuvenated relation which began after the end of Cold War got accentuated further by signing of the Joint Action plan (JAP) between the EU and India in 2005. It was taken forward by launching negotiations for a broad based free trade agreement in 2007 which includes trade in goods, the deregulation of services, investment, government procurement and enforcement of intellectual property rights. The aim was to conclude the agreement in 2011 but there have been major concerns on both sides prompted by limited information that has emerged from the ongoing negotiations about different aspects of inequality, market access, IPRs, agriculture and environment. With enhanced bilateral trade and investment relations India is set to garner benefits on pharmaceuticals, textile, gems and jewelry industry and it hopes to increase foreign investment particularly in defense and financial sector. India’s fast economic growth coupled with increase in purchasing capacity of Indian middle class population, harmonized trade portfolio and untapped market opportunities especially in financial and automobile sector seem to be the source of profit and gain for the EU.

Both European Union and India are among the world’s largest economies and with their significant leadership role are critical players in several key issues including financial markets and trade, security and climate change, poverty alleviation and energy supply, although their strategic interests may both converge or diverge. The economic structure of the European Union has changed in the last three to four decades. While the manufacturing component has gone down, there has been a substantial increase in knowledge based economy. The EU holds abundant finance capital, IPR and patent and India has resources and manufacturing potential. This offers a reliable synergy for further strengthening the trade ties. This very complimentarity of the markets provides new opportunities for trade and investment engagement. The growing profile of India within international politics and the sheer size of the economy (GDP based on PPP $7996 billion, World Economic Outlook, IMF, 2015), population and strategic significance draw attention to the changing economic distribution, which were among the reasons for the EU to upgrade its relationship with India.

With the above historical background and justifying need of enhanced cooperation between the two regions, on 30 March 2016 after a gap of 4 long years the 13th EU- India summit took place in Brussels immediately after Brussels terror attacks on 22 March 2016. Modi’s decision to visit Brussels in such time of crisis, tightened security and high terror alert shows the intensity and rigor on both sides to re-establish the relationship which have been moving at a sluggish rate over the past few years where no annual summits were held. The summit largely focused on counterterrorism which overshadowed other important aspects of trade, investment and other forms of cooperation. EU and India re-vouched their commitment for a united fight against terrorism and violent extremism.

On issues of foreign policy on neighborhood and beyond, the joint statement addressed issues of cooperation in Africa, diplomatic solution to Ukrainian crisis, arbitration procedure on Italian Marine case, IAEA-Iran nuclear commitments, Stability in middle east and Syria, Afghanistan peace and reconciliation process, stability and democracy in Pakistan, situation and political party’s cooperation in Maldives and post earthquake reconstruction of Nepal and issues of constitutional inclusion in newly promulgated Nepalese constitution. However the issues of agreement on foreign policy could not remain uncontroversial as Nepal came out with strong objections and seeking clarifications from both sides, where it objected by expressing that, commenting on Nepalese constitutional issues in bilateral summits was highly uncalled for and is an attempt to interfere on exclusive internal matters of an independent sovereign state.

The EU-India bilateral relations are still dominated by economic and trade issues. While the 2005 Joint Action Plan (JAP) that detailed the Strategic Partnership emphasizes the political engagement, it is the economic dimension of this partnership which is the most important for growth and development for both parties. In the upheld summit the leadership reemphasized on importance of economic growth and jobs through fostering economic co-operation. The greatest takeaway of the summit was agreement and initiation on reengagement with discussions and negotiations for the Broad based Bilateral Trade and Investment Agreement (BTIA). The largest issues of contentions on the trade agreement mainly remain on issues of agricultural subsidies, tariff and non tariff barriers, issues on Intellectual property protection, patents and generic medicines especially for pharmaceutical industry, labor standards and GATS mode in liberalization services.

The Summit re-connected the halted bilateral talks between the EU and India. No big breakthrough or new agreement was neither expected/perceived or were in discourse nor did anything as such happen. As India strongly holds Westphalian realist view of state as primary actor, because of which member state of the Union are considered to be of more important and prioritized by India over the EU, India’s strong bilateral relations with United Kingdom, Germany, France, Italy and other member states overshadow the relations with the Union focusing with enhanced cooperation with strong member states.

The EU-India summit was coupled with state visit of Belgium (Belgium is second largest trading partner within EU) where different aspects of bilateral technological, economic and security co-operations were discussed. The leadership acknowledged growing convergence of views on international issues committed to strengthen partnership for present and future. Belgium re-affirmed its commitment for India’s seat for permanent membership in UN Security Council and working together for India’s membership of four multilateral export control regimes namely, Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group and Wassenaar Arrangement.

The Summit was positive push for further cooperation between EU and India as the EU remains India’s most important and largest trading partner. The EU remains India’s most important trading partner. EU’s trade with India in goods and services stood at Euro 95.51 billion both ways in 2014. The Strategic Partnership with EU has, however, not realized the promise as initially was thought of. The lost momentum of trade negotiations since last few years has gained a little motion, though no remarkable breakthrough has happened or is expected. The discussions on BTIA are expected to resume soon which were called off on August of last year due to ban of 700 Indian pharmaceutical products by EU in its internal market. Alongside with enhanced cooperation, EU can learn a lot from India’s first-hand experience of fighting with terrorism since a long time.

Overall, not much was achieved in substantive terms, but the Summit made all the right noises and by doing so, put the vehicle of meaningful engagement in motion again.

Deepak Raj Pandaya | The writer is a Marie Curie Early Stage Research Fellow in International Relations at Jawaharlal Nehru University (Program on Power and Region in a Multipolar Order–PRIMO) and Doctoral candidate of University of Hamburg, Germany