The India-EU Leaders meeting on 8 May 2021 was in a unique format. Prime Minister Modi met with leaders of all 27 EU countries, together with Charles Michel, President of the European Council, and Ursula von der Leyen, President of the European Commission, as a manifestation of the success of India’s European initiative. Over the last few years. India has consistently engaged the EU, and with many European countries where relationships had lain dormant. The last India-EU summit in July 2020 set a roadmap till 2025, and a strategic partnership with several robust elements. The unique leaders’ summit with all EU countries, comes as a shot in the arm for India. It emphasises the common values that permeate India and the EU.
It is significant that this summit took place during the Portuguese presidency. The prime minister of Portugal, António Luís Santos da Costa, invested heavily in this. Why didn’t this happen during the German presidency, especially as Germany is among India’s best partners in the EU? Germany instead invested in a similar summit with China, but was reduced in its ambit due to uneven responses. Yet, Germany’s enthusiasm for China has continued unabated, and it pushed through a comprehensive agreement on investment (CAI) on 30 December 2020. Now, the CAI is in the doldrums, with the European Parliament taking exception to Chinese values and actions.
Several aspects of the India-EU agreement are now competing with, if not challenging, China. The truth is plain to see: the EU now strategically engages India to deal with the rise of China. And India’s European project is showing signs of success, in the shadow of China and Brexit. The joint statement showed the harmonisation of values, if not of substance.
India is a major gainer from this engagement. Strategically, there is greater appreciation in the EU of the Indo Pacific and its importance, as different countries increase their presence in the region, and engage more robustly for maritime security, connectivity, trade and investment.
An achievement for India has been persuading the EU to re-engage on trade and investment. The new strategy is not to seek a comprehensive bilateral trade and investment agreement, but discuss three separate agreements on trade, investment, and geographical indicators in parallel. The EU is more interested in investment. India should welcome that as it will support Aatmanirbhar Bharat and resilient value chains. European companies in India have already started expanding their facilities to create export hubs, which, while not being a China +1 strategy, is certainly an India+ strategy. The early conclusion of the India EU investment agreement will facilitate credit guarantees, and insurance for EU Foreign Direct Investment (FDI) into India.
The issue of a Free Trade Agreement (FTA) is a bigger one because the ghosts of disappointment, which lurk among negotiators within EU member states, have not been dispelled. No talks on the FTA have been held since 2013. However, the India-EU virtual summit of 2020, gave the process a new political push for the EU members to engage India robustly for trade and investment.
Another significant engagement has been the India-EU connectivity partnership which runs across four segments: physical and digital infrastructure, energy, transport and people-to-people connectivity. This can bring a large amount of FDI and overseas development assistance (ODA) to India, to support public private partnerships (PPP). The possibility of undertaking similar connectivity projects in Africa, Central Asia and in the Indo-Pacific is envisaged.
The connectivity partnership will be a work-in-progress, but several development banks from EU countries are funding energy, transport, urban mobility, green economy and railways. The European Investment Bank is already a major partner for metros in India. Digital partnerships like submarine cables satellite networks, 5G, cross border payments, renewable energy, efficient and smart electricity systems, as well as support for India’s flagship International Solar Alliance, are part of the connectivity engagement.
Had the pandemic not hit India in its second wave, PM Modi would have travelled to Porto, to meet the 27 leaders. The EU has stepped up like a friend during this emergency, with a rapid response by using the EU civil protection mechanism for aid – a tool not used for India before. The EU has committed 100 million Euro in kind, and a huge airlift was undertaken to alleviate the crisis in India. This is strategic cooperation. India is not seen as a weak state, but as a partner in distress, who stood by Europe when it needs help. EU, and its member states have been sensitive to a pandemic-related partnership with India, rather than emphasize a donor engagement. This is a big achievement for India.
The India-EU engagement provides for larger role for India in the world. Seeking reformed multilateralism, with increased attention on institutions like the WHO, WTO, the UN system, is on the anvil. Everything for India and the EU to move ahead is in place, including a human rights dialogue and coordination on issues like Afghanistan, and Myanmar.
What should India worry about? The summit provided a conducive momentum based on a strategic partnership. This indicates that at all levels, the approach must be used to resolve old differences and imbalances. The main concern is about implementation of the agreements, which will really determine the success of the commitments made at the summit. Now is the time for the bureaucracies in all 28 countries to maintain the momentum, and for the EU to engage with India as a mature partner.
Gurjit Singh is Former Ambassador of India to Germany, Current Chair of the CII Task Force on Asia-Africa Growth Corridor and Professor at the IIT, Indore.
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