Opinion India-EU FTA offers how-tos and how-not-tos

First, the trade deal per se is no mean feat. It brings together the world’s second- and fourth-largest economies, constituting 25 per cent of global GDP. The two together are home to almost 2 billion people, many of whom will gain from new employment opportunities, skill development, technological innovation, and improved labour mobility. The deal provides for preferential market access to 99 per cent of Indian exports to the EU; the EU, in turn, expects to double its goods exports to India by 2032.

For Europe, this deal comes at a time of urgent need. Its partnership with the US is now a relationship of angst. It has been facing pressure to decouple from Russia, and has been uneasy about its overdependence on the Chinese market. The FTA offers not only a large market but also a reliable partnership. India faces different imperatives. Multi-alignment has ensured that it is not as severely affected by Trumpian turnarounds as the EU. But with the WTO offering scarce hope for expanding trade via multilateralism, and a need to diversify that stems from India’s difficult neighbourhood, bilateral trade agreements with like-minded democracies present a sensible path forward.

Second, just as important as the economic gains are the potential national security gains. The EU-India FTA allows both parties to realign and secure supply chains in critical sectors. The Security and Defence Partnership — another key outcome of the summit — is a reflection of how both sides have updated their economic game to a geoeconomic and geopolitical one.

Third is the deal’s method. Besides making use of geopolitical uncertainties and geoeconomic risks to reach a timely deal, the FTA shows elements of pragmatism through carve-outs. The EU, for instance, offers no liberalisation on beef, sugar and rice; India, too, has “prudently safeguarded sensitive sectors, including dairy, cereals”. The framing of the deal is one that appreciates the democratic credentials of the two parties and speaks of “core values”. While making sure to cater to the interests of both sides, it also emphasises their shared norms.

The art of this deal offers interesting pointers for other negotiations. Disillusioned with the WTO Doha negotiations, many members are turning towards agreements that are narrower in scope and membership. The EU-India FTA demonstrates the benefits of small membership but also the utility of having a wider scope to allow for trade-offs and issue linkage. With the US having withdrawn from 66 multilateral organisations, and a demand for reform of global governance from diverse quarters, the EU-India negotiating experience offers useful how-not-tos from the initial phases, as well as helpful routes to subsequent success.

Finally, the three cheers for their recent successes should come with encouragement for the better globalisation that the EU and India can script together. Both stress their commitment to democracy, human dignity, and other worthy causes. Will one reinforce the best traits in the other, and build a model of globalisation that is not only human-centric, but planet-centric? There can be few more “natural allies” in the cause of animal and planetary rights: India has pioneered the idea of LiFE (Lifestyle for the Environment), while the EU has movements and political parties that speak up for the truly voiceless (animals). Credibility on this would require domestic legwork. But sustainability and cooperation would acquire a new depth of meaning and impact if the world’s largest democracies collaborate in such leadership.

The writer is distinguished fellow at the Observer Research Foundation and honorary fellow of Darwin College, University of Cambridge