INTERNATIONAL RELATIONSHIP
5. EUROPE
India-EU bilateral relations:
Various facets of India-EU bilateral relations:
Trade and Investment:
The EU is India’s largest trading partner, accounting for 12.9% of India’s overall trade. Further the trade
in services have almost tripled in last decade. Overall, the EU is the second largest investor in India,
with €70 billion of cumulative FDI from April 2000 to March 2017, accounting for almost one quarter
of all investments flows into India.
A new study from the European Parliament assesses the potential impact of an EU-India
trade agreement at between €8 billion and €8.5 billion gains from increased trade for
both sides
EU and India remain close partners in the G20 and have developed a regular macroeconomic dialogue
to exchange experience on economic policies and structural reforms.
Energy Cooperation: EU – India Clean Energy and Climate Partnership.
Research and Development: India, participates in international ITER fusion. India also participates
in research and innovation funding programme ‘Horizon 2020’
The EU and India also cooperate closely on the Indian Clean Ganga initiative and deal with other
water-related challenges in coordinated manner.
Migration and mobility: The EU-India Common Agenda on Migration and Mobility (CAMM)
is a fundamental cooperation agreement between India and EU.
Development cooperation: Over €150 million worth of projects are currently ongoing in India.
Concerns in India- EU relations:
Poor outcomes of strategic summits:The relationship remained far too focused on set- piece summits rather
than fostering dynamic everyday linkages and paucity of bilateral visit shows lac of political will. Unfairly
large emphasis was laid on foreign policy cooperation, but on many issues divisions far exceeded
commonalities, leading to disappointment and an overall delusion in the potential of the partnership.
EU ‘s concerns with India’s ‘human rights violations:India considers human rights violations as a
domestic issue and would wish to handle it within India’s political space. EU’s insistence on including HR
provisions into Free Trade Agreement has hampered trade between the two.
On multilateralism, EU-India interaction and coordination within UN bodies is not robust.
India’s bilateral relations with member countries:Given the lack of cohesion among the EU constituents
on strategic issues, India prefers establishing bilateral relations rather than dealing with the EU as a whole.
In case of the two Italian marines being tried in India is becoming other cause of concern between two. The
EU’s stand on the issue is seen by many in India as a challenge to her sovereignty.
Dual use technology:EU’s strategic dual use technology nhi de rha h which has pushed India into a closer
, huddle with the US and other European countries like France. India therefore, doesn’t see the EU as a
reliable partner.
EU is characterised by over-institutionalized and over-bureaucratized, which affect its bilateral
trading partner attractiveness as compare to ASEAN and SAARC
EU has next to nothing to contribute to her energy demand or other principal security interests.
For Permanent seat in UN - it is not the EU but the existing European permanent members, the UK and
France, who bring more value to the table for India.
Finally, the on-going Eurozone crisis has greatly undermined India’s confidence in the EU.
Although trade remains the primary focus, negotiations for The free trade agreement
(FTA) which was launched in 2007 is still being dragged due to the following reasons:
EU’s concerns:
India’s protectionism to auto mobile sector
India’s Intellectual property regime with the provision of compulsory
Domestic source obligation in the multi brand retail
Duty and tariff protection in areas of wine, sprouts and dairy products
Civil nuclear energy generation legislation
Data Security:Based on current standard of protection to data in India the EU refused to grant the
status of Data Secure Nation. Data secure nation needs to protect the important data related to
innovation, research, individual details, IP etc. to be safeguarded. This affects High end business
products specifically. European companies doing outsourcing business with countries not certified
as data secure have to follow stringent contractual obligations that increase operating costs and
affect competitiveness.
Vodafone case has threatened EU investors from entering India due to retrospective taxation
measures. So such taxation is also acting as road block.
India’s concerns:
European Union’s heavily subsidised agro- industry.This could hurt Indian farmers.
EU Import restriction: like ban on the import of mangoes from India
Work visa restriction–movement of skilled professionals
Technology transfer issue
Way forward:
A framework addressing the above mentioned issues could go a long way in strengthening ties in light of
India and EU’s affinities and common concerns such as increasing fundamentalism.
India EU FTA has a lot of road blocks but it is in benefit of each other. EU will gain market of 1.2 billion
whereas India will gain in terms of Technology, Investments from EU.
Both are needed to be pragmatic in approach while working on it in future. India’s share in services trade
with EU can grow manifold.
Cheaper imports of European luxury items like cars, wine, European expertise in agriculture, infrastructure
and urban management can augment Indian drive in make in India, Swachh Bharat Abhiyan & agricultural
research.
5. EUROPE
India-EU bilateral relations:
Various facets of India-EU bilateral relations:
Trade and Investment:
The EU is India’s largest trading partner, accounting for 12.9% of India’s overall trade. Further the trade
in services have almost tripled in last decade. Overall, the EU is the second largest investor in India,
with €70 billion of cumulative FDI from April 2000 to March 2017, accounting for almost one quarter
of all investments flows into India.
A new study from the European Parliament assesses the potential impact of an EU-India
trade agreement at between €8 billion and €8.5 billion gains from increased trade for
both sides
EU and India remain close partners in the G20 and have developed a regular macroeconomic dialogue
to exchange experience on economic policies and structural reforms.
Energy Cooperation: EU – India Clean Energy and Climate Partnership.
Research and Development: India, participates in international ITER fusion. India also participates
in research and innovation funding programme ‘Horizon 2020’
The EU and India also cooperate closely on the Indian Clean Ganga initiative and deal with other
water-related challenges in coordinated manner.
Migration and mobility: The EU-India Common Agenda on Migration and Mobility (CAMM)
is a fundamental cooperation agreement between India and EU.
Development cooperation: Over €150 million worth of projects are currently ongoing in India.
Concerns in India- EU relations:
Poor outcomes of strategic summits:The relationship remained far too focused on set- piece summits rather
than fostering dynamic everyday linkages and paucity of bilateral visit shows lac of political will. Unfairly
large emphasis was laid on foreign policy cooperation, but on many issues divisions far exceeded
commonalities, leading to disappointment and an overall delusion in the potential of the partnership.
EU ‘s concerns with India’s ‘human rights violations:India considers human rights violations as a
domestic issue and would wish to handle it within India’s political space. EU’s insistence on including HR
provisions into Free Trade Agreement has hampered trade between the two.
On multilateralism, EU-India interaction and coordination within UN bodies is not robust.
India’s bilateral relations with member countries:Given the lack of cohesion among the EU constituents
on strategic issues, India prefers establishing bilateral relations rather than dealing with the EU as a whole.
In case of the two Italian marines being tried in India is becoming other cause of concern between two. The
EU’s stand on the issue is seen by many in India as a challenge to her sovereignty.
Dual use technology:EU’s strategic dual use technology nhi de rha h which has pushed India into a closer
, huddle with the US and other European countries like France. India therefore, doesn’t see the EU as a
reliable partner.
EU is characterised by over-institutionalized and over-bureaucratized, which affect its bilateral
trading partner attractiveness as compare to ASEAN and SAARC
EU has next to nothing to contribute to her energy demand or other principal security interests.
For Permanent seat in UN - it is not the EU but the existing European permanent members, the UK and
France, who bring more value to the table for India.
Finally, the on-going Eurozone crisis has greatly undermined India’s confidence in the EU.
Although trade remains the primary focus, negotiations for The free trade agreement
(FTA) which was launched in 2007 is still being dragged due to the following reasons:
EU’s concerns:
India’s protectionism to auto mobile sector
India’s Intellectual property regime with the provision of compulsory
Domestic source obligation in the multi brand retail
Duty and tariff protection in areas of wine, sprouts and dairy products
Civil nuclear energy generation legislation
Data Security:Based on current standard of protection to data in India the EU refused to grant the
status of Data Secure Nation. Data secure nation needs to protect the important data related to
innovation, research, individual details, IP etc. to be safeguarded. This affects High end business
products specifically. European companies doing outsourcing business with countries not certified
as data secure have to follow stringent contractual obligations that increase operating costs and
affect competitiveness.
Vodafone case has threatened EU investors from entering India due to retrospective taxation
measures. So such taxation is also acting as road block.
India’s concerns:
European Union’s heavily subsidised agro- industry.This could hurt Indian farmers.
EU Import restriction: like ban on the import of mangoes from India
Work visa restriction–movement of skilled professionals
Technology transfer issue
Way forward:
A framework addressing the above mentioned issues could go a long way in strengthening ties in light of
India and EU’s affinities and common concerns such as increasing fundamentalism.
India EU FTA has a lot of road blocks but it is in benefit of each other. EU will gain market of 1.2 billion
whereas India will gain in terms of Technology, Investments from EU.
Both are needed to be pragmatic in approach while working on it in future. India’s share in services trade
with EU can grow manifold.
Cheaper imports of European luxury items like cars, wine, European expertise in agriculture, infrastructure
and urban management can augment Indian drive in make in India, Swachh Bharat Abhiyan & agricultural
research.
