Table of Contents
India European Union Relations
This article deals with ‘India European Union Relations.’ This is part of our series on ‘International Relations’ which is important pillar of GS-2 syllabus . For more articles , you can click here
Why is Europe important to India
- It is linked to colonial legacy of India
- Ties coloured by outlook of western educated leaders => eg Nehru, Gandhi etc educated in Britain
- Britain has special place due to Indian Diaspora
- India can learn art of multilateralism from EU
- Natural partners because of shared values & beliefs in democracy, pluralism , independent media & rule of law
Trade Relations
- One of the largest trading partner. Accounts for €86 billion in 2017 ie 13% of India’s overall trade.
- Despite global turmoil , bilateral trade in goods increased
- EU is the second largest investor in India, with €70 billion of cumulative FDI from 2000
- Free Trade Agreement (FTA) currently under negotiation => would be world’s largest encompassing 1.8 billion people
- But problems are present due to the fact that European markets are going towards protectionism .
Security
- India and
Europe share common interest on
- Defending global terrorism & extremism
- securing trade lines from attacks of pirates
- Preventing attacks on IT infra
- Helpful in
securing Indian Ocean Region because it’s members like France, Italy etc
have important bases
- France : Reunion Island , UAE etc
- Italy : Djibouti
World Order
- Commitment to a “rules-based” international order and a “multipolar” world.
- For UNSC Reforms, EU is most important because of Veto Power of France
Climate Change & Environment
- Both shares common view towards Climate Change
- After US withdrawal , India – EU Cooperation has become even more important
City to City Cooperation
City-to-city cooperation between European and Indian cities such as Mumbai, Pune and Chandigarh
Challenges
- Increasing Wave of Protectionism in EU countries
- In WTO, both are leaders of Opposite Blocs wrt Doha Development Agenda
- On Bilateral Investment Treaty (discussed below)
- Indian Agro Products banned on frivolous pretexts under SPS measures of WTO
- Problems wrt Labour Laws – Eg : Carpets denied entry due to Carpet Industry of Mirzapur employing child labour
Broad-based Trade & Investment Agreement (BTIA)
Both parties initiated negotiations on a Free Trade Agreement (FTA) called the Broad-based Trade and Investment Agreement(BTIA) in 2007 but have not reached conclusion till now
Roadblocks wrt EU
- India’s model BIT (Bilateral Investment Treaty) which allows companies to seek international arbitration only when all domestic options have been exhausted
- Data Secure Status of India : EU refused to grant the status of Data Secure Nation to India. It will increase operating costs and affect competitiveness.
- India’s IPR Regime with the provision of compulsory licensing
- Issues such as : Vodafone Case and Retrospective taxation
- EU wants India to reduce taxes on liquor (which would benefit France) and automobiles (which would benefit Germany)
- Duty and tariff protection in areas of spirits, wine and dairy products
Roadblocks wrt India
Concerns in agri Sector:
- EU subsidises dairy products. Concern of dumping Indian markets with European Dairy products
- Europe use SPS Measures clause to block access of Indian Agri products in Europe
Concerns in service sector:
- Relaxation in movement of skilled professionals into EU.
- Recognition of India’s professional qualifications in EU
Procurement Policy
- EU wants that government procurement chapter to be added in the FTA so that it can capture the lucrative government procurements.
Post Brexit Opportunities
After Brexit, it could be easier for India to negotiate the terms of FTA with EU. Till now UK was playing role of biggest spoiler