EU-India relations enter new chapter under the shadow of the Ukraine war

It has been 60 years since India accredited its first ambassador to the European Economic Community (EEC), the organisation that served as embryo for the European Union. Back then, India was a protectionist economy attempting to move away from the British colonial era while the EEC consisted of just six European countries within the very early stages of market integration.

Today, things look dramatically different: India is a G20 member value €3 trillion, an emerging global power and the soon-to-be most populous country in human history. It it the biggest democracy within the planet and a number one actor within the Indo-Pacific, home to almost two-thirds of the world’s economy.

India’s enormous political, economic and demographic weight represents a useful source of potential for the EU, which, in the same vein to the US, is attempting to develop a pivot to Asia to act as a counterbalance to China’s towering influence across the region.

“Our values usually are not shared by everyone. All of us see the rising challenges to our open and free societies. That is true for the technological and the economic domain – but it is usually true for security,” said Ursula von der Leyen, president of the European Commission, at the tip of a two-day visit to India, during which she met with the Prime Minister Narendra Modi and President Ram Nath Kovind.

“The truth is that the core principles that underpin peace and security internationally are at stake. In Asia in addition to in Europe,” she told the audience of the Raisina Dialogue, a high-level conference on geopolitics and geo-economics.

The renewed push from Brussels and Recent Delhi follows twenty years of bilateral relations marked by notable ups and downs.

Things were off to an excellent start in 2000, with the primary EU-India summit, and further improved in 2004, when a “strategic partnership” was officially established, but then took a turn for the more severe over deep-rooted disagreements related to a draft trade agreement and a controversial case involving an Italian oil tanker and the shooting of two Indian fishermen.

As China began to exert its prowess in a more controlling and assertive manner, either side realised the advantages of closer cooperation outweighed any type of outstanding discrepancy.

Rapprochement efforts progressively intensified: in 2020, the EU and India unveiled in a joint roadmap for the subsequent five years, touching upon areas of common concern reminiscent of climate change, security, fair trade, human rights research and innovation.

In 2021, the 2 sides agreed to resume negotiations on the stalled trade deal and launch a dialogue on maritime security, a vital aspect in Indo-Pacific politics. The EU also arrange a connectivity partnership – the second of its kind after Japan’s – to spice up investments in energy, transport and digital infrastructure.

These diplomatic achievements were characterised by a surprising level of “detail, depth and richness” that set them other than previous announcements, said Stefania Benaglia, an associate researcher on the Centre for European Policy Studies (CEPS).

Maritime security and connectivity “are two areas where you actually have an investment that sort of paid back, meaning that you may have the political statement that was actually accompanied by developments on the bottom,” Benaglia, whose work focuses on EU foreign policy and EU-India relations, told Euronews.

“The potential shouldn’t be only to do an excellent deal and have an economic gain. The potential is geopolitical, it’s really strategic for each of them.”

Coincidentally, the brand latest chapter in EU-India relations has include a large rise in trade of products, which reached an all-time high figure of €88.1 billion in 2021. Aircraft components, vehicle parts, machinery, oil, pearls and pharmaceutical products are among the many most exchanged products.

Foreign direct investment has also steadily increased over the past years, making the bloc one in every of the biggest investors within the country with €83 billion spent between 2000 and 2021. About 4,500 EU firms are present in India and supply greater than six million direct and indirect jobs.

A wealth of untapped potential

Casting a shadow over the copious and lucrative business links is a plethora of technical barriers, divergent standards and discriminatory measures that, in Brussels’ view, create a restrictive and unfair environment for EU businesses attempting to set shop and bid for public tenders in India.

“When the pandemic first hit and we realised there was a giant dependency on China, the primary immediate response must have been: ‘Well, there’s India right round the corner.’ India could have thoroughly served as the choice to the Chinese market, offering the identical service,” Benaglia said.

“That clearly didn’t occur. [European] firms didn’t move out from China to enter the Indian market. It’s a very different dynamic, sometimes very difficult – but not unimaginable.”

The upcoming trade talks, the primary round of which is scheduled to happen in mid-July in Recent Delhi, is anticipated to deal with a few of these points of friction although no major breakthrough is anticipated within the near term as EU negotiations are notoriously technical and lengthy.

To make discussions easier, either side have agreed to ascertain a Trade and Technology Council, modelled after the homonymous EU-US forum, to tackle challenges that transcend national borders.

“Our strategic cooperation should happen on the nexus of trade, trusted technology and security, notably in respect of challenges posed by rival governance models,” said von der Leyen, in a thinly veiled reference to China’s state-run system.

Over the past months, the federal government of Narendra Modi has showcased a powerful desire to expand its foreign trade: the administration has struck trade deals at record speed with the United Arab Emirates (UAE) and Australia, and is working on latest ones with the UK, Israel and Canada.

But India doesn’t need to be viewed as an “alternative” market to China but as a standalone regional power, said B. Rahul Kamath, a researcher on the Observer Research Foundation (ORF), a Delhi-based independent think tank.

“India would like if Europe looks at India as a latest market with significantly high potential for growth and development,” Kamath told Euronews.

“India’s large market size aided by a progressively growing economy not only makes Recent Delhi a rising economic power but additionally strengthens its political and diplomatic stature on the international level.”

Besides the successful conclusion of the incipient trade agreement, Kamath noted, either side should construct common ground by working together on health policy, infrastructure and regional security.

“A stronger partnership would allow the EU to extend its engagement within the Indo-Pacific while India could look into increasing its footprint in Central and Eastern Europe, an area by which there was minimal development,” the researcher said.

‘A difficult balancing act’

The blooming relations between India and the EU – and more broadly, the entire West – recently hit a bump within the road: Russia’s invasion of Ukraine.

Ever because the war broke out, the EU and the US have been rallying their allies to harshly condemn Russia’s unprovoked aggression and synchronise an unprecedented raft of international sanctions.

The joint campaign has to this point yielded limited results, attracting only advanced economies with a consolidated democratic system: the UK, Norway, Japan, South Korea, Australia, Recent Zealand and, in a shocking break from its neutrality tradition, Switzerland.

While India has called an “immediate cessation of violence” and offered its help to secure a ceasefire, it has kept away from condemning the invasion and imposing equivalent sanctions. Notably, the country decided to abstain on two key United Nations votes: one to censure Russia for its military actions and one other to suspend its membership from the Human Rights Council.

The equidistant position has won Moscow’s praise for “taking this example in the whole lot of facts, not only in a one-sided way” but visibly ruffled India’s Western partners.

In a rare public rebuke, US President Joe Biden called India’s stance “somewhat shaky” as in comparison with the opposite two members of the so-called Quad, Japan and Australia.In her Raisina speech, Ursula von der Leyen avoided direct criticism but evoked the horrors of the Bucha massacre to induce “all members of the international community” to support the West’s diplomatic efforts.

“The end result of Putin’s war won’t only determine the longer term of Europe but additionally deeply affect the Indo-Pacific region and the remaining of the world,” von der Leyen said. “For the Indo-Pacific it’s as necessary as for Europe that borders are respected. And that spheres of influence are rejected.”

India’s balancing act, experts say, responds to the country’s inherent suspicion to anything that appears to resemble Western imperialismand a fixation to take care of a non-aligned and independent foreign policy whose important purpose is to serve the federal government’s domestic agenda and make sure the nations’ prosperity.

As an alternative of embracing the us-versus-them mentality that usually makes it way into Washington’s pondering, Recent Delhi has opted for a more inclusive, growth-driven approach to foster ties with a terrific host of nations that, in some instances, could also be hostile towards one another.

Maintaining healthy links with Russia is a very important piece of an even bigger geopolitical puzzle that also includes China and Pakistan, two neighbours which were involved in border skirmishes with India.

These military tensions weight heavily on India-Russia relations: Russia is India’s largest supplier of major arms, accounting for over 46% of all of the weapons Recent Delhi bought between 2017 and 2021, down from 69% in the course of the 2012-16 period.

Overall, India is the world’s largest buyer of arms: the country purchases about 11% of all traded weapons world wide, in line with a latest report by the Stockholm International Peace Research Institute (SIPRI).

“For India, it is sort of crucial to balance its relationship with the West – the US and Europe – by which it has invested rather a lot in recent times,” Dr. Garima Mohan, a fellow within the Asia program of the German Marshall Fund, told Euronews.

“Its partnership with Russia is at this point a really one-note relationship focused largely on military and defence equipment for which India is critically depending on Russia, due to this fact it cannot afford to completely alienate the country. It is a difficult balancing act for the Indian government.”

India’s noncommittal position on the war should not be seen as “antagonistic” or “opposed” to the Western united front, Mohan said, noting the Modi government has provided humanitarian aid to Ukraine via Poland.

But in a move set to further exacerbate the West’s frustration, Indian firms have begun to ramp up purchases of Russian oil after Moscow offered a reduction of $35 per barrel. In line with an estimation released by Reuters, India has bought no less than 40 million barrels because the start of the Ukraine war – greater than twice as much because it bought in the entire of 2021.

The country “is attempting to preserve whatever remnants of leverage Recent Delhi has with Moscow, with the complete understanding that the China-Russia relationship is changing,” Mohan said.

“India also desires to play the role of a responsible actor globally. So it is going to be mindful of the relation and the trading it does with Russia and, after all, the impact of sanctions.”


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