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India And EU: ‘Natural Partners’ Need To Do More To Strengthen Strategic Partnership – Analysis

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By Ankita Dutta*

Europe and India are two pluralistic communities that share much in common – from traditions to histories and cultures, plurality and diversity, commitment to democracy and human rights, independent judiciary and free press, and the strategic role that both are required to play in today’s rapidly changing world. Both have emerged from the debris of the past while dealing with the age old boundary conflicts and border issues. India’s interactions with Europe during the Cold War mainly revolved around the bipolar nature of the global order.

India’s attempt to minimize the adverse effects for the country of the highly polarized Cold War environment led to its non-aligned position, which allowed it to pursue productive relations with both east and west and served it well during most of the decades involved. The end of the cold brought many changes for both Europe and India. On the one hand, the emergence of European Union after years of conflicts and uncertainties has been the most remarkable development of the 20th century, and on the other, the liberalization of Indian economy paved the way for the European companies to make large investments in India, which has been reciprocated by the Indian companies substantial investments in Europe in the recent years.

The Indo-European relationship has, since its inception, been dominated by trade. However, while historically the trade relationship tended to be ‘eurocentric’, the current trend is towards a much more equal dynamic. India is an important trade partner for the European Union (EU) and an emerging global economic power. The value of EU-India trade grew from € 28.6 billion in 2003 to € 72.5 billion in 2014. EU investment stock in India is € 34.7 billion in 2013. Trade in commercial services quadrupled in the past decade, increasing from € 5.2billion in 2002 to € 23.7 billion in 2013. However, trade figures show that India’s economic interaction with European countries is very much focused on specific players within the EU, with the vast majority of India’s trade focused on only a handful of states.

The absence of political will in Brussels is partly due to the preference of the larger member states for dealing bilaterally with India; the partnership is essentially driven by those member states which have substantial trade and economic ties with India. The EU suffers from “a lack of consensus” because different states have different economic competences and priorities. There is considerable time lag in decision- making within the EU because of its compulsion to work by committees and consensus. The dispersal of decision-making power among the different institutions hinders EU’s ability to interact in strategic terms with India. Despite the differences of opinions, there has been immense co-operation and progress between India and Europe – the economic relations are growing fast, especially in the area of foreign investments and co-operation in the fields of biotechnology, telecommunications and energy.

The major step towards strengthening the EU-India relationship was the launching of Strategic Partnership at the Hague Summit in November 2004. The sixth Summit meeting between India and EU held in New Delhi in September 2005 was significant, as it endorsed a comprehensive and ambitious Joint Action Plan (JAP) which provides a framework for deeper cooperation and engagement over a range of issues, especially in economic, trade and investment matters. The JAP provides ways and means of enhancing cooperation over several areas, including the social sector, science and technology, space, energy, clean development, and environmental improvement. Then Prime Minister Manmohan Singh described India and the European Union as “natural partners”. The EU especially after its enlargement, he acknowledged, was emerging as “a politically influential, economically powerful and demographically diverse regional entity” in the world. The strategic partnership symbolized “a qualitative transformation in our interactions based on trust and mutual confidence”.

The EU is widely acknowledged in India as an economic powerhouse and a formidable negotiator in multilateral trade negotiations. But the fact remains that the EU has no coherent and strategic vision or perspective as to what kind of relationship it really seeks with India. The absence of a politically active and influential Indian diaspora makes it even more difficult to get attention. India shares European aspirations for forging a multipolar, rule-based world order, but it did not view the EU as a credible counterweight to the United States given the structural difficulties of making multipolarity work effectively apart from the inherent constraints of an evolving CFSP in a more diverse and heterogeneous Union. India remains highly skeptical about the EU’s political and foreign policy capabilities. Moreover, there is a qualitative difference in the attention and focus given by the European Union to China. The policies towards China are more proactive than those for India.

There has been constant debate on the visibility of Europe and European Union in Indian political scene as well as of India in EU. Most of the European states are unanimous in their belief that India considers United States of America to be far more crucial than the Union; because it is perceived as the “hyperpower” in a unipolar world in which no conceivable combination can possibly challenge the US. Since US has the most impact on the national security environment of India, it has been willing to undertake political risks in dealing with India whereas Europe has not been willing to do so. As a rising power, India is more sympathetic to the American effort to rework the rules of the global game (the most recent example being the July 2005 India-US agreement on civilian nuclear technology) from which it could benefit. Such a quantum jump for the EU is unimaginable.

Despite the divergences and convergences in the political and economic dimensions of the relations between Europe and India, the tremendous effort is placed on the people to people contact, which has been growing effectively over the years. There has been substantial progress on strengthening people-to-people contacts through the India window of the Erasmus Mundus scholarship programme, scientific and technical cooperation, trade exchanges and two-way investment and EU assistance through partnerships with selected Indian states and use of EU’s budgeted funds for supporting Indian government’s programmes on health and education.

India’s growing stature and influence regionally and globally, growing economic interest in a rapidly and consistently growing economy of a billion-plus people with an annual GDP growth rate of over 6 per cent for over a decade, the world’s fourth largest and second fastest growing economy, has lead to the acceptance of India as an important player in international politics. Whether India–EU cooperation forges a meaningful and beneficial relationship would depend on the relative importance of India and EU as the international system evolves. The ‘global war on terror’ which was a consequence of 9/11, failure of the BrettonWoods institutions and the ineffectiveness of the P-5 to represent the diverse range of interests in the world today have called into question the assumptions on which the international order was based. The international community appears to be in a difficult position while dealing with the questions of political participation, terrorism and non-state actors, economic progress and poverty alleviation, nuclear energy and proliferation, environmental sustainability and development, state sovereignty and human security. The realization that the individual—his/her rights, duties and well-being—must be better represented in governance to assure peace and prosperity in the world has become central to international, regional and national action. In such a scenario, their common adherence to democratic institutions and an inclusive society make India and EU natural partners in restructuring of the international system.

The India-Europe relationship is not based on any specific short-term or immediate requirement, but on long-term interests in which both sides seek to widen and deepen mutual cooperation on a broad range of issues. The prospects and potential of the India-EU strategic partnership are indeed considerable. EU-India relations have been, and will continue to be driven by trade and commerce, with limited prospects of really substantial cooperation in political and strategic issues. Both sides routinely stress shared values, but though shared values tend to facilitate the widening and deepening of a relationship, they do not necessarily lead to improved relations.

*Ankita Datta is pursuing PhD in European Studies from Jawaharlal Nehru University, New Delhi. Comments and suggestions on this article can be sent on: [email protected]


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