EU-India relations

Summary

In this two-part series on the rise of India, the focus is on the evolving relationship between India and the EU. The discussion covers the history of their diplomatic ties, from the 1962 establishment of relations to the 2004 strategic partnership, and the current efforts to finalize a Free Trade Agreement. Experts also explore the significance of the trade and technology council, cooperation on semiconductors, and the challenges faced in the negotiations. Additionally, the potential impact of the new economic corridor linking India, Europe, and the Middle East is examined, along with the strategic and economic importance of these developments for both regions.

Takeaways

• 😀 India established diplomatic relations with the European Economic Community in 1962, making it one of the first countries to do so.
• 😀 In 1994, India and the EU signed a cooperation agreement, which evolved into a strategic partnership in 2004.
• 😀 Negotiations for a Free Trade Agreement (FTA) began in 2007 but stalled in 2013 due to diverging ambitions and leadership changes. The talks were relaunched in 2021.
• 😀 The Trade and Technology Council (TTC) was discussed in 2022, aimed at strengthening EU-India cooperation on trade and technology, including areas like climate change and defense.
• 😀 The TTC led to a significant milestone in 2023 with the signing of a Memorandum of Understanding (MoU) on semiconductor cooperation.
• 😀 The EU-India Free Trade Agreement (FTA) is a crucial step but faces challenges due to the large size of both markets and issues such as sustainability and sanitary products.
• 😀 A Free Trade Agreement between India and the EU could be a game-changer, enhancing trade and signaling stronger ties between the two global economic powers.
• 😀 The G20 Summit in 2023 led to the announcement of an economic corridor linking India, Europe, and the Middle East, aimed at strengthening regional trade.
• 😀 The economic corridor would pass through Saudi Arabia, the UAE, Israel, and Greece, offering an alternative trade route for the EU, but geopolitical tensions, like the Israel-Hamas conflict, have created challenges.
• 😀 While there are no major factors likely to derail the EU-India relationship, the pace of negotiations may slow due to differing priorities, particularly around sustainable trade and labor rights.

Q & A

What is the history of EU-India relations?

India was among the first countries to establish diplomatic relations with the European Economic Community in 1962. A cooperation agreement between the EU and India was signed in 1994, which evolved into a strategic partnership in 2004.

What led to the negotiation of a Free Trade Agreement (FTA) between the EU and India?

In 2007, trade between India and the EU began growing, prompting leaders to start negotiations on a Free Trade Agreement. However, these talks stalled in 2013 due to diverging ambitions and leadership changes.

When were the FTA negotiations between the EU and India relaunched?

The negotiations were relaunched in 2021 following the election of Prime Minister Modi and his government.

What is the Trade and Technology Council, and why is it important?

The Trade and Technology Council is a forum designed to enhance cooperation between the EU and India in areas such as trade and technology, including climate change and defense technology. A significant milestone was reached in 2023 with the signing of a memorandum of understanding on semiconductors.

What is the current status of the Free Trade Agreement negotiations?

There have been seven rounds of negotiation, but the agreement will not be finalized by 2024 as some had hoped. The complexity of negotiating such an agreement with two large markets has caused delays.

Why is the Free Trade Agreement between India and the EU considered important?

The Free Trade Agreement would be crucial for both the EU and India, as it would increase trade in several sectors. It would also signal India's commitment to global trade and strengthen the EU's ties with a key strategic partner in the region.

What is the economic corridor launched between India, the EU, and the Middle East?

The economic corridor is a project that will link India, Saudi Arabia, the United Arab Emirates, Israel, and Greece. It aims to diversify trade routes for the EU and create new economic opportunities, though challenges like the ongoing Israel-Hamas conflict may slow progress.

How does the war between Israel and Hamas affect the economic corridor?

The war has complicated talks about the economic corridor, especially between Israel, the UAE, and Saudi Arabia, potentially delaying progress on the initiative.

Could the EU-India relationship face obstacles in the future?

While the relationship is unlikely to be derailed, the pace of strengthening ties may slow due to challenges such as diverging priorities and the complexity of negotiations on issues like sustainability and labor rights.

What is the importance of the values underlying the EU-India partnership?

The quality of the relationship matters as much as the quantity. For example, the EU has emphasized that the Free Trade Agreement should adhere to the rules of the International Labour Organization and sustainable trade commitments.