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The meeting between India's External Affairs Minister S Jaishankar and European Commission President Ursula von der Leyen signifies a pivotal moment in the evolving relationship between India and the European Union. Von der Leyen's visit to India underscores the EU's commitment to strengthening bilateral cooperation across a spectrum of areas, ranging from trade and investment to clean energy and security. This initiative is particularly crucial in the context of a rapidly changing global landscape, where both India and the EU are seeking to diversify their partnerships and enhance their strategic autonomy. The meeting is more than just a symbolic gesture; it is a concrete step towards revitalizing and deepening the ties between two of the world's major economic and political powers.
One of the key drivers behind this renewed engagement is the EU's desire to reduce its economic dependence on China. The EU recognizes India as a vital partner in achieving this goal. India's large and growing economy, its skilled workforce, and its strategic location make it an attractive alternative for European businesses looking to diversify their supply chains and expand their market reach. The ongoing negotiations for a free trade agreement (FTA) between India and the EU are a testament to this shared ambition. An FTA would significantly reduce trade barriers between the two regions, boosting trade and investment flows and creating new opportunities for businesses on both sides. However, the negotiations are complex and involve sensitive issues such as tariffs on cars, wine, and agricultural products. The EU is likely to urge India to lower these tariffs, while India will seek concessions in other areas. Successfully navigating these challenges will be crucial to reaching a mutually beneficial agreement.
Beyond trade and investment, India and the EU are also seeking to deepen their cooperation in other areas of strategic importance. Clean energy is one such area, with both sides committed to promoting sustainable development and combating climate change. India's ambitious renewable energy targets and the EU's expertise in green technologies offer significant opportunities for collaboration. Joint projects in areas such as solar energy, wind power, and energy efficiency could help to accelerate the transition to a low-carbon economy. Security is another area of growing convergence. The EU is keen to enhance its defense and security collaboration with India, particularly in the Indo-Pacific region, amid rising tensions over China's military activities. India and the EU share a common interest in maintaining a rules-based international order and ensuring freedom of navigation in the Indo-Pacific. Increased cooperation in areas such as maritime security, counter-terrorism, and cybersecurity could help to address these shared challenges.
The visit also coincides with the third anniversary of the war in Ukraine, adding another layer of complexity to the discussions. Von der Leyen is expected to call on India to support the effective implementation of Western sanctions against Russia. India has so far refrained from condemning Russia's actions and has continued to maintain trade and diplomatic ties with Moscow. However, the EU is hoping to persuade India to take a stronger stance against Russia and to align its policies more closely with those of the West. This is a sensitive issue for India, which has historically maintained close ties with Russia and is heavily reliant on Russian arms and energy. Finding a way to bridge this gap will be a key challenge for both sides.
The India-EU Connectivity Partnership, launched in 2021, is another important aspect of the bilateral relationship. This initiative aims to boost connectivity projects between the two regions and beyond, facilitating trade, investment, and people-to-people exchanges. The signing of a memorandum of understanding (MoU) between India, the EU, and key global partners to develop the India-Middle East-Europe Economic Corridor (IMEC) is a significant step forward in this regard. The IMEC is a ambitious project that aims to create a new trade route connecting India, the Middle East, and Europe, bypassing the Suez Canal and reducing transit times and costs. The project has the potential to transform regional trade and connectivity, creating new opportunities for economic growth and development.
In the financial year 2023-24, bilateral trade in goods between India and the EU reached $135 billion, with India's exports to the EU amounting to $76 billion and imports standing at $59 billion. Trade in services was valued at $53 billion, with Indian exports at $30 billion and imports at $23 billion. These figures demonstrate the significant economic ties that already exist between the two regions. The EU remains India's largest trading partner in goods, while European investments in India exceed $117 billion, with around 6,000 EU companies operating in the country. Indian investments in the EU are valued at around $40 billion. These investments are a testament to the confidence that businesses on both sides have in the long-term potential of the relationship.
Von der Leyen's visit is expected to lay the groundwork for the upcoming India-EU summit, scheduled for the second half of the year in India. This summit will be an opportunity for both sides to take stock of progress made and to set the agenda for future cooperation. The aim is to finalize a strategic roadmap for deeper collaboration across a range of areas, including trade, investment, clean energy, security, and connectivity. The summit will also provide an opportunity for leaders to address any outstanding issues and to build momentum towards a stronger and more resilient partnership. The deepening of India-EU ties is not just a bilateral matter; it has significant implications for the global order. As two of the world's largest democracies and economic powers, India and the EU have a responsibility to work together to promote peace, stability, and prosperity around the world. Their partnership can serve as a model for other countries and regions, demonstrating the benefits of cooperation and multilateralism.
The growing strategic convergence between India and the EU is also driven by shared concerns about the rise of China. Both India and the EU are wary of China's growing economic and military power and its increasingly assertive foreign policy. While neither side seeks to contain China, they are both committed to upholding a rules-based international order and ensuring that China acts responsibly on the global stage. Increased cooperation between India and the EU can help to counterbalance China's influence and to promote a more multipolar world. This is not to say that India and the EU see eye-to-eye on every issue. There are still differences in perspective and priorities. However, the shared strategic interests and the growing recognition of the importance of the relationship are creating a strong foundation for closer cooperation. Von der Leyen's visit is a clear signal that the EU is committed to deepening its engagement with India and to building a stronger and more resilient partnership. The outcome of the visit and the upcoming summit will be crucial in shaping the future of India-EU relations and in contributing to a more stable and prosperous world.
The trajectory of India-EU relations is currently marked by a dynamic interplay of economic imperatives, geopolitical considerations, and shared values. The European Union's keen interest in strengthening its partnership with India is not merely a matter of economic diversification, but also reflects a broader strategic recalibration in response to the shifting global order. The EU recognizes India's growing influence on the world stage and seeks to leverage this influence to advance its own interests and promote its values. The free trade agreement (FTA) negotiations, while complex and challenging, represent a significant opportunity to unlock the full potential of the India-EU economic partnership. The FTA is expected to significantly reduce trade barriers, leading to increased trade and investment flows, and ultimately boosting economic growth and job creation on both sides. However, the successful conclusion of the FTA will require both sides to address sensitive issues, such as tariffs on agricultural products and intellectual property rights, in a pragmatic and mutually beneficial manner.
Beyond the economic sphere, the India-EU partnership is also gaining traction in areas such as security, climate change, and digital cooperation. Both India and the EU share a commitment to combating climate change and are actively collaborating on renewable energy projects, energy efficiency initiatives, and sustainable development strategies. In the realm of security, the two sides are deepening their cooperation in areas such as counter-terrorism, cybersecurity, and maritime security, with a particular focus on the Indo-Pacific region. The India-EU Connectivity Partnership is another important initiative that aims to improve infrastructure and connectivity between the two regions, facilitating trade, investment, and people-to-people exchanges. The India-Middle East-Europe Economic Corridor (IMEC) is a flagship project under this partnership that has the potential to transform regional trade and connectivity, creating new opportunities for economic growth and development.
However, the India-EU relationship also faces certain challenges. One of the most pressing is the ongoing war in Ukraine, which has created a deep divide between the West and Russia. The EU has urged India to condemn Russia's actions and to support the implementation of sanctions, but India has so far refrained from taking a strong stance. This divergence in views on the Ukraine crisis has created some tensions in the India-EU relationship, but both sides have expressed a willingness to manage these differences and to continue to work together on areas of mutual interest. Another challenge is the rise of protectionism and trade tensions around the world. The EU and India are both committed to upholding the rules-based multilateral trading system, but they also face pressure from domestic constituencies to protect their own industries. Navigating these competing pressures will require careful diplomacy and a commitment to finding common ground.
Despite these challenges, the India-EU relationship is poised for continued growth and deepening cooperation in the years ahead. The strategic rationale for the partnership is strong, and both sides are committed to investing in the relationship. The upcoming India-EU summit in the second half of the year will provide an opportunity for leaders to take stock of progress and to set the agenda for future cooperation. The summit is expected to focus on areas such as trade, investment, security, climate change, and digital cooperation. The successful conclusion of the FTA would be a major milestone in the India-EU relationship, but even without the FTA, there is ample scope for deepening cooperation across a wide range of areas. The India-EU partnership is an important anchor of stability and prosperity in an increasingly uncertain world. As two of the world's largest democracies and economic powers, India and the EU have a responsibility to work together to promote peace, security, and sustainable development around the world.
Source: Jaishankar meets EU chief von der Leyen, backs her call for stronger India-Europe engagement