“you too are facing the task of building a new society in theplace of old, of creating a simple community out of many whilepreserving the riches and the diversities of each”.
–Walter Hallstein,the President of the EC Commission in April 1963.
The relations between the European Economic Community (the forerunner of the European Union) and Indiadid not develop in the 1960s when the former was born. They were put under close scrutiny following the British application to join the Community. Among other things, India’s priorities in her foreign policy of the time and EC’s inward-looking policies were the contributory factors to the slow growth of relations. European indifference was matched by India’s lack of political interest in deepening the relations. Studies on British membership negotiations with the EEC and its impact on India underline this point.
With the entry of Britain into the EEC, India’s relations entered into the second phase as she renewed her efforts to engage the EEC in a broadly based trade and cooperation agreement. The context was provided by the Joint Declaration of Intent (JDI) annexed to the Act of Accession signed by the United Kingdom, Denmark and Ireland with EEC. As a result, the Commercial Cooperation Agreement (CCA) was signed on 17 December 1973 and came into force on 1 April 1974. CCA was the first of a whole generation of agreements.
The CCA limited activities to trade matters. Although the commercial exchanges increased there was still the problem of India’s continuing deficit in balance of payments with the EEC. While the latter turned out to be India’s largest trading partner accounting for more than a quarter of its total trade, India figured nowhere amongst EEC priority areas. Therefore, although, conceptually, CCA was good, the trade opportunities remained low. It was then felt that the scope should be enlarged into a much broader economic, commercial and development cooperation agreement. After several negotiations, on 24 June 1981, the Commercial and Economic Cooperation Agreement (CECA) was signed. It was an improvement on CCA as it included economic cooperation although it was based on the same principles of mutual benefit and comparative advantage.
In the 1990s, there were radical changes in the international economic scenario. In light of such changes, attempts were made to upgrade the relations between India and the European Union (The European Community was renamed the European Union in 1993. The new Agreement concluded in 1993, and in force since 1994, was the third generation Cooperation Agreement and is particularly broad in scope, covering: respect for human rights and democracy; development and diversification of trade and investment; economic, technical and cultural cooperation; emphasis on private sector investment and intellectual property rights; promotion of exchanges of business communities; support for India’s efforts in poverty alleviation and sustainable social progress; environmental protection and so on.
Then India became the EU’s ‘strategic partner’ in 2004. EU-India Strategic Partnership was created to enable the partners to better address international issues facing both India and the EU. Subsequently, negotiations for the FTA started in 2007 and were to be concluded by 2009, but are still ongoing today.
The bottlenecks in the negotiations are: European negotiators want India to liberalise its banking and insurance sectors and give greater access to the Indian markets for vehicles, and for wines and spirits, which are protected by tariffs of as much as 60 percent and 100 percent respectively.
On the Indian side, officials are demanding easier European work access for skilled professionals in fields such as accountancy and information technology, as well as better access to the protected European market for agricultural produce.
Apart from the above major Agreements, EU-India relations have been conducted by a host of other institutions. The majors ones are Joint Commission (1973); Indian Trade Centre (1980); India-EC/EU Troika (Since 1982); EU Delegation in New Delhi (1982); European Community Investment Partners (1990); India-EC Business Forum (1992); Annual Summits (2000); Parliamentary Delegations (since 2009); EU-India Trade and Technology Council (TTC) (2022); and EU-India Strategic Partnership: A Road Map to 2025 (2020).
Any assessment of the India-EU partnership draws mixed views. It has strong potential, and solid complementarities, but has missed opportunities, and is weak. In a brilliant work, “The Paradox of EU-India Relations”, it is commented that “so many efforts for bringing India and EU together were supposed to unite them for the accomplishment of common goals. But unfortunately, this has not happened”.The EU is India’s largest trading partner, but India ranks 10th as the EU’s partner lagging behind China, South Korea, Russia, Brazil and South Africa etc. India-EU political dialogue remains a paper tiger. The civil society exchanges between the two are few and far between. And cultural exchanges, through film festivals, dance programs, joint book fares, etc., are at their minimal level”.
The policies of Focus-Africa, Focus-Latin America, and Act East, which were initiated by the government of India, are novel steps in this direction. It is true that India is now in the phase of expanding its relations with the rest of the world. But the fact remains that EU-India relations could be more meaningful than what they are now”.
Some reasons for the failure of the relations to take off are: a lack of appropriate attention by the European Union to India; lack of knowledge in India about the EU and about India in the EU, in the past, dynamic and fast-evolving nature of the EU belied India’s interest to capture its growth, and now, EU is unserious about India’s growth as an alternative market to China.
Therefore, in spite of the impressive growth in institutional relations, the trade between India and the European Union remains asymmetrical. The European Union also seems to follow protectionism through non-tariff barriers like controversial application of social and human rights clauses, child labour, environmental concerns, insistence on harmonized European standards and so on. In order to promote a balanced trade and a meaningful relationship, the European Union needs to adopt a more liberal and flexible policy towards India.
On India’s part, it can also establish inter-institutional collaboration with the EU for the exchange of information, personnel etc.. The EU-India Cross-Cultural Programme should perhaps lay the basis for a greater mutual understanding with the involvement of media, academic and business community.
Finally, in the wake of the Ukrainian war, and in the new geo-political scenario, the perspectives of the EU and India have greatly diverged. EU seems uncomfortable with India’s position of neutrality in the war whereas New Delhi sticks to ‘strategic autonomy’ and is critical of the EU’s obsession with itself at the cost of international developments. Basically, Europe views Russia as a strategic threat and has a ‘business-as-usual’ approach to China. On the other hand, India carries on with her ‘old and trusted’ partner Russia and is wary of China’s unabated territorial appetite, let alone its disregard for civil, political and human rights. It is time both the EU and India treat both Russia and China as posing the threat of authoritarianism to the democratic world. Such common strategic thinking will surely pave the way for a greater partnership that plays to their optimum potential.
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