India – EU Relations

Syllabus: International Relations

Source: IE

Context: A high-level delegation of the European Commission’s College of Commissioners, led by President Ursula von der Leyen, is in New Delhi for a two-day visit to strengthen India-EU relations.

About India-EU Relations:

• Historical Relationship

• Diplomatic ties since 1962 with the European Economic Community (EEC), evolving into the EU-India Strategic Partnership in 2004. The India-EU Joint Political Statement (1993) and Cooperation Agreement (1994) strengthened bilateral engagement. 15 India-EU Summits have been held, with the first in Lisbon (2000) and the most recent in 2021.

• Diplomatic ties since 1962 with the European Economic Community (EEC), evolving into the EU-India Strategic Partnership in 2004.

• The India-EU Joint Political Statement (1993) and Cooperation Agreement (1994) strengthened bilateral engagement.

• 15 India-EU Summits have been held, with the first in Lisbon (2000) and the most recent in 2021.

• Present Status of India-EU Relations:

• The EU is India’s largest trading partner in goods, with bilateral trade at $135 billion (FY 2023-24). EU FDI in India stands at $117.4 billion (16.6% of total FDI) since 2000. Strategic cooperation in trade, technology, climate action, and security has deepened through the India-EU Trade and Technology Council (TTC).

• The EU is India’s largest trading partner in goods, with bilateral trade at $135 billion (FY 2023-24).

• EU FDI in India stands at $117.4 billion (16.6% of total FDI) since 2000.

• Strategic cooperation in trade, technology, climate action, and security has deepened through the India-EU Trade and Technology Council (TTC).

Key Fields of Cooperation:

• Trade & Investments: Negotiations on a Free Trade Agreement (FTA) and Geographical Indications Agreement are ongoing. India is concerned about EU’s Carbon Border Adjustment Mechanism (CBAM) impacting exports.

• Negotiations on a Free Trade Agreement (FTA) and Geographical Indications Agreement are ongoing.

• India is concerned about EU’s Carbon Border Adjustment Mechanism (CBAM) impacting exports.

• Technology & Innovation: Science & Technology Cooperation Agreement (2007) guides bilateral research partnerships. India-EU Semiconductor MoU (2023) strengthens cooperation in chip manufacturing and AI.

• Science & Technology Cooperation Agreement (2007) guides bilateral research partnerships.

• India-EU Semiconductor MoU (2023) strengthens cooperation in chip manufacturing and AI.

• Green Energy & Climate Action: The EU has committed €1 billion for India’s green hydrogen projects. Collaboration on renewables, circular economy, and sustainable urbanization.

• The EU has committed €1 billion for India’s green hydrogen projects.

• Collaboration on renewables, circular economy, and sustainable urbanization.

• Defence & Security: India-EU Security & Defence Consultations (2022) focus on maritime security, counter-terrorism, and cyber threats. First India-EU joint naval exercise (2023) in the Gulf of Guinea.

• India-EU Security & Defence Consultations (2022) focus on maritime security, counter-terrorism, and cyber threats.

• First India-EU joint naval exercise (2023) in the Gulf of Guinea.

• Space Cooperation: India’s ISRO and the European Space Agency (ESA) are collaborating on Gaganyaan, Chandrayaan-3, and Aditya-L1 missions. EU’s PROBA-3 mission was launched by ISRO’s PSLV in December 2024.

• India’s ISRO and the European Space Agency (ESA) are collaborating on Gaganyaan, Chandrayaan-3, and Aditya-L1 missions.

• EU’s PROBA-3 mission was launched by ISRO’s PSLV in December 2024.

Challenges & Differences:

• Trade Barriers & CBAM: India opposes the EU’s Carbon Border Tax, which could impact steel and aluminum exports. Regulatory differences in data protection and digital trade remain contentious.

• India opposes the EU’s Carbon Border Tax, which could impact steel and aluminum exports.

• Regulatory differences in data protection and digital trade remain contentious.

• Slow Progress on FTA: The India-EU FTA negotiations have been ongoing since 2007, facing hurdles over tariffs and market access.

• Ukraine War & Geopolitical Divergence: India’s neutral stance on Russia-Ukraine conflict contrasts with EU’s strong opposition to Russia.

• Mobility & Visa Policies: Indian professionals received over 20% of EU Blue Cards (2023-24), but strict EU visa policies remain a challenge for Indian workers.

• Human Rights & Democratic Values: EU concerns over India’s internet restrictions, freedom of expression, and human rights create periodic friction in diplomatic engagements.

Way Ahead:

• Fast-track India-EU FTA Negotiations: Prioritize resolving trade barriers and conclude an FTA by 2025.

• Strengthen Technology & Digital Partnerships: Expand collaboration on AI, quantum computing, and cyber security.

• Enhance Security & Defence Ties: Deepen maritime cooperation in the Indo-Pacific under ESIWA+ security program.

• Resolve Trade & Environmental Disputes: Negotiate a pragmatic approach to EU’s CBAM, balancing trade and climate goals.

• Expand People-to-People Ties: Simplify visa policies and student exchange programs to enhance mobility.

Conclusion:

India-EU relations are at a crucial turning point, with deepening cooperation in trade, technology, and security. Despite challenges in FTA negotiations and CBAM policies, strategic engagement in green energy, digital economy, and defence will strengthen their partnership for global stability and economic growth.

• The expansion and strengthening of NATO and a stronger US-Europe strategic partnership works well for India. What is your opinion about this statement? Give reasons and examples to support your answer. (UPSC-2023)