India and European Union (EU) relations UPSC

India European Union (EU) Relations

Background of India European Union Relations:

• India-EU relations date to the early 1960s, with India being amongst the first countries to establish diplomatic relations with the European Economic Community. 
• Cooperation agreement was signed in 1994 between two, taking relationship beyond trade and economic cooperation. 
• First India-EU Summit took place in 2000. In 2004, the relationship was upgraded to a ‘Strategic Partnership’.
• A Delegation for Relations with India was formally constituted in the European Parliament in 2007.

Economic and commercial relations of India European Union:

• EU as a block is India's largest trading partner, accounting for €80 billion worth of trade in goods in 2019 (11.1% of total Indian trade).
• Also, EU is the biggest foreign investor in India, with €67.7 billion worth of investments made in 2018 (22% of total FDI inflows).

Defence and security cooperation between India European Union:

• EU and India have instituted several mechanisms for greater cooperation on pressing security challenges like counter-terrorism, maritime security, and nuclear non-proliferation.
• Information Fusion Centre – Indian Ocean Region in New Delhi (IFC-IOR) has recently been linked-up with the Maritime Security Centre – Horn of Africa (MSC-HOA) established by the EU Naval Force (NAVFOR).

Cooperation in Science and Tech between India European Union:

• EU is supporting the Mobilize Your City (MYC) programme in India currently in three pilot cities to reduce their urban transport-related Green House Gas (GHG) emissions.
• India and the EU set up an Energy Panel in 2005 for cooperation in energy and energy security and both cooperate on forums such as EU-India Clean Energy Cooperation and India-EU Water Partnership.
• Also, both have official mechanisms in fields such as Digital Communications, 5G technology, Biotechnology, artificial intelligence etc.

People to People of India European Union Relations:

• India and the EU organize Festivals of culture (e.g. Europalia-India festival), exchanges on heritage such as yoga & Ayurveda etc.
• Both signed Horizontal Agreement on Civil Aviation in 2018 to boost bilateral travel and tourism.
• Both sides also inked the Common Agenda on Migration and Mobility (CAMM) in 2016 as a framework for cooperation on migration.
• There are over 50,000 Indian students currently studying in various European Universities, many of whom are under EU’s Erasmus Mundus scholarship programme for higher education.

Factors shaping India-EU relations in the current times

• Changing Geopolitical developments: As highlighted by EU strategy on India, released in 2018, EU sees EU-India relations in the context of broader geopolitical developments, primarily the rise of China. Impact of China in Europe and Asia (e.g. Belt and Road initiative) has pushed EU to change the nature of its partnerships in the region, particularly with India.
• Convergence of interests in the Indian Ocean: Increasing Naval base race and security competition in the Indian Ocean region will impact both Europe and India as the Indian Ocean is the main conduit for global trade and energy flows. India, EU see each other as partners in securing the Indian Ocean by strengthening institutions, rule of law, and a regional security architecture.
• Retreat of the U.S. from global leadership and uncertainty of US policy under Trump has provided opportunities for EU- India cooperation and trilateral dialogues with countries in the Middle Fast, Central Asia and Africa.
• Strategic rivalry between the US and China: Both EU and India have a common interest in avoiding a bipolarized world and sustaining a rules-based multilateral trading system with the United Nations and the World Trade Organization at its core.
• Green governance: After the US exit from the Paris climate agreement, India and the EU stand to gain from a joint leadership on global governance matters such as climate change, clean energy or circular economy.
• New emerging world order after COVID-19: As EU seeks to move away from a global supply chain that is overly dependent on China, India can emerge as its most natural ally. EU and India could find a common path in ensuring supply chain resilience to reform the global system in response to health emergencies.

Concerns in of India European Union Relations

• Stalled EU-India BTIA: It is being negotiated since 2007 and both sides have major differences on crucial issues such as-
• EU’s demands significant duty cuts in automobiles, tax reduction on wines, spirits etc, a strong intellectual property regime, relaxation in India’s data localisation norms, protection to all its items with Geographical Indication etc.
• India’s demands: ‘Data secure’ status (important for India's IT sector); Ease norms on temporary movement of skilled workers, relaxation of Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade(TBT) norms etc.
• Trade imbalance: India accounts for only 1.9% of EU total trade in goods in 2019, well behind China (13.8%).
• India’s perception of EU: It views EU primarily as a trade bloc, preferring bilateral partnerships with Member States for all political and security matters. This is evident from lack of substantive agreements on matters such as regional security and connectivity.
• Brexit: It is unclear how U.K.’s withdrawal from EU will affect India’s relation with EU as whole.
• Human Rights concerns of EU: The European Parliament was critical of both the Indian government’s decision to scrap Jammu and Kashmir’s special status in 2019 and the Citizenship (Amendment) Act.