News Highlights
India and the European Union (EU) concluded the first round of talks for the proposed free trade agreement (FTA) that acts as a milestone in India-EU Relations.
Focus Points of Talks
- India and the EU resumed negotiations on June 17, after a gap of over eight years, on the proposed agreements on trade, investments, and Geographical Indications (GI).
- The first round of talks, which began on June 27, ended on July 1.
- India’s FTA negotiations were led by the Joint Secretary in the Department of Commerce, and the EU was represented by its Chief Negotiator Christophe Kiener,
- Areas of Focus
- During the first round, 52 technical sessions covering 18 policy areas of FTA and seven sessions on investment protection and GIs were held.
Why is the EU Significant for India?
- The trade agreement with the EU would help India further expand and diversify its exports of goods and services, including securing the value chains.
Analysis of India- EU Relations
- India and the EU are considered good trading partners that have a potential future that evolved through various ups and downs in the past 60 years.
Timeline of India – EU Relations
Areas of Cooperation in India-EU Relations
Political Relation
- 1993 – Joint Political Statement signed in 1993 that widened India – EU dialogue.
- 1994 – The Cooperation Agreement signed by both parties upgraded the relationship from economic to the next level.
- India – EU Summit
- The first India-EU Summit took place in Lisbon in 2000.
- At the 5th India-EU Summit in 2004, the partnership was elevated to a “Strategic Partnership.”
- The 12th annual Summits have been held, the last one in New Delhi in 2012
- The 13th India-EU Summit in Brussels supported the India-EU Agenda for Action 2020.
- In 2018, the European Commission released the EU’s strategy for India, titled “A Partnership for Sustainable Modernization and Rules-based Global Order.”
- Other Mechanisms
- Both sides have recently instituted Foreign Policy Consultations at the level of Secretaries which met for the first time in 2011.
- An annual India-EU Ad-hoc Dialogue on Human Rights is held in New Delhi
- There is also a Delhi-based Joint Working Group on Consular Issues
- Parliamentary Level
- A Delegation for Relations with India (D-IN) was formally constituted in the European Parliament (EP) in 2007.
- Currently, the EU serves as a significant point of comparison for India’s legislative process regarding data security and privacy.
Defence Relation
- In order to work together more closely on urgent security issues like counterterrorism, maritime security, and nuclear non-proliferation, the EU and India have established a number of institutions.
- 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).
- Other Mechanism
- 2018 saw the holding of the 6th India-EU Foreign Policy and Security Consultations to evaluate strategies for advancing the India-EU Strategic Partnership.
- Since 2006, a Security Dialogue envisioned by the Joint Action Plan has been held annually.
- The Security Dialogue receives reports from the dialogues on cyber-security and counter-piracy as well as a bilateral Joint Working Group on Counter-Terrorism.
- In January 2021, India and the EU hosted the first Maritime security dialogue in a virtual format.
Economic Relation
- Bilateral Trade
- India’s bilateral trade with the EU amounted to $116.36 billion in 2021-22.
- At present, the EU is India’s second-largest trading partner after the US and the second-largest destination for Indian exports.
- The largest sectors of India’s Exports to the EU are engineering goods, pharmaceuticals, gems and jewellery, other manufactured goods, and chemicals
- India has benefited from preferential tariffs for exports since the 1970s under the Generalised System of Preferences (GSP) of the EU.
- Investment
- Over the past ten years, the EU’s percentage of foreign investment inflows to India has risen from 8% to 18%. Because of this, the EU is a significant foreign investor in India.
- A Broad-based Trade and Investment Agreement (BTIA) between India and the EU has been developing since 2007.
Development Partnership
- The focus areas of development include health, education, poverty reduction, water and sanitation
- There are currently initiatives in India funded by the EU totaling more than €150 million.
- The metro projects in Bangalore, Pune, and Lucknow are receiving loans from the European Investment Bank (EIB).
Cooperation in Science and Technology
- Energy
- Both parties have now signed a civil nuclear cooperation pact known as the European Atomic Energy Community (EURATOM) in the field of civil nuclear energy.
- Space
- Since 1970, ISRO and the European Space Agency have been working to improve their partnership in earth observation via a Joint Working Group (JWG).
- A 2018 Cooperation Agreement concerning the Copernicus program between the European Commission and the Department of Space offers a framework for information sharing and further cooperation in the space industry.
Climate Change
- The EU and India emphasise on successful implementation of the Paris Agreement.
- The 2016 Summit adopted the India-EU Clean Energy and Climate Partnership, which aims to advance R&D, access to clean energy and climate-friendly technologies, and their dissemination.
- The EU and India work closely together on the Clean Ganga effort.
- A co-funding mechanism (CFM) has been established by the Ministry of Earth Sciences (MoES) and the European Commission (EC) to support collaborative research projects chosen under Horizon 2020.
Why is India Significant for the EU?
- Alternate for China in the field of manufacturing hub and manpower.
- Support for EU for World Health Organisation (WHO) reform.
- Potential of India’s huge market.
- Avoiding the condition of bipolarity and developing the multilateral world.
Why is the EU Significant for India?
- Counter China’s influence in the region through the Belt and Road Initiative.
- Access to modern technology.
- Access to the European market for Indian goods.
Issues in India – EU Relation
- The negotiations for a Broad-based Bilateral Trade and Investment Agreement (BTIA) remain suspended.
- European Union’s strong Sanitary and Phytosanitary (SPS) measures hinder Indian export to the region.
- China’s dominance in trade by 13.8% and India has only 1.9% in the EU.
- EU’s critics on internal matters of India include revoking Article 370 and the Citizenship (Amendment) Act.
Way Forward
- Both sides can realize their potential for cooperation in the fields like trade and boost relations through bilateral engagements.
Pic Courtesy: Hindustan Times, Business Standards
Content Source: The Indian Express