Opinion In a turbulent world, India and Europe provide an anchor
There is a temptation among some observers to attribute the timing and content of the India-EU Agreements above to the current security and defence strategy of the US. This would be a mistake
As a multipolar world takes shape, it is obvious that both India and the EU fancy pole position for themselves. It is hard to overstate the importance of what the European Union (EU) and India have just accomplished. In one fell swoop, the two sides have concluded the long-pending free trade agreement (FTA), finalised a Security and Defence Partnership, zeroed in on a Comprehensive Framework for Cooperation on Mobility and decided on a Comprehensive Strategic Agenda for 2030. In a geopolitically turbulent world, these agreements lend a measure of stability not just to the two parties but also to the world at large.
The FTA was a long time coming. There were certainly substantive difficulties for both sides. For India, agriculture and dairy were non-negotiable, the auto sector presented political challenges, the country was not ready for discussion on environment, labour standards, government procurement, and so on. For the EU, agriculture exports were crucial, the prospect of auto exports to the third-largest market was mouth-watering and the mood in the European Parliament was in favour of environment and labour standards in FTAs. It is therefore commendable that both sides burnt the midnight oil to arrive at a mutually acceptable deal.
The EU is a $22-trillion economy with a population of 450 million high-income consumers. India may only be a $4-trillion economy for now, but it is the fastest-growing one. For the EU, India also offers a clear alternative to China in the medium term. The FTA delivers unprecedented market access for more than 99 per cent of India’s exports while preserving policy space for sensitive sectors. Sectors like leather, footwear, textiles, garments, marine products, medical instruments, gems and jewellery, plastics and chemicals should see growth in exports. The mobility partnership agreement is crucial for the movement abroad of Indian professionals, students and skilled workers. With a carefully calibrated opening of the economy, Indian manufacturing may be expected to become more competitive, and a much-needed surge in investment is likely.
It is nevertheless worth pointing out that India must continue to carry out deep reforms to get maximum mileage out of this and other FTAs. This FTA should also help India meet the regulatory challenges of the European market. More than anything else, it enables India to integrate into European value chains and attract significant FDI.
The Security and Defence Partnership is hugely significant. Hitherto, India has had substantial defence ties with European countries such as France on a bilateral level. The new deal provides an overarching framework for defence cooperation between India and the EU. This is happening at a time when the EU, partly under pressure from the US and concerns emanating from the war in Ukraine, is increasingly fashioning its own defence architecture. India can help in the task of building European defence, not just by trade, but also by actively participating in co-design and co-production of weapons systems and platforms and facilitating transfer of technology from Europe.
There is a temptation among some observers to attribute the timing and content of the India-EU Agreements above to the current security and defence strategy of the US. This would be a mistake. India and the EU have been negotiating for years now. They share values and beliefs, including strategic autonomy, a multipolar world, secularism, pluralism, democracy and tolerance.
The Joint Comprehensive Strategic Agenda (2030) is based on five pillars. The FTA will further the first pillar, prosperity. The second pillar of tech and innovation will require progress in the Trade and Technology Council, while the third pillar of defence will require implementation of the Security and Defence Partnership. The fourth pillar of connectivity will require advancing the India-Middle East-Europe-Economic Corridor, and the fifth pillar of people-to-people ties will benefit from the mobility partnership. Both sides have their work cut out.
India and EU have resembled two lovers who have taken their own sweet time to tie the knot. The fact that they have eventually come together is evidence of demonstrable compatibility and strategic convergence. As a multipolar world takes shape, it is obvious that both India and the EU fancy pole position for themselves.
The writer is a former Indian ambassador to France and currently dean/professor at O P Jindal Global University. Views are personal
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