EU-India Partnership Set for Strategic Upgrade

Syllabus: GS2/International Relation

Context

• Recently, the European Union (EU) released ‘A New Strategic EU-India Agenda’ in Brussels, outlining plans to upgrade ties with India across trade, technology, defence, security, and climate cooperation, and calling India a ‘crucial partner’ in shaping a defining partnership of the 21st century.

India–European Union Relations

• Historical Background: India’s diplomatic engagement with the EU dates back to the early 1960s, when it became one of the first countries to establish relations with the European Economic Community in 1962.
  • It marked the beginning of a multifaceted partnership grounded in shared democratic values, rule of law, and multilateralism.

India-EU Relation: Present Dynamics

• India and the EU maintain a robust and expanding strategic partnership, guided by the India–EU Strategic Partnership: A Roadmap to 2025, adopted during the 2020 summit. It outlines cooperation across 31 dialogue mechanisms, including:
  • Trade & Investment: The EU is India’s second-largest trading partner that has grown over 90% in the past decade.
    • In FY 2023-24, Bilateral trade in Goods with the EU stood at US$135 billion (Exports: US$ 76Bn; Imports: US$ 59Bn).
    • Bilateral Trade in Services stood at US $53Bn (Exports: US$ 30Bn; Imports: US$ 23Bn).
  • Security & Defence: Joint naval exercises in the Gulf of Guinea (2023), Gulf of Aden (2021), and cooperation under Operation Atalanta highlight growing maritime collaboration.
  • Climate & Sustainability:India – EU Clean Energy and Climate Partnership (CECP) established in 2016 focuses on clean energy and climate-friendly technologies.
    • Green Hydrogen, offshore wind energy, development of gas infrastructure in India, and reduction of methane emission are emerging areas of cooperation.
    • EU is a partner organisation to the International Solar Alliance (ISA) since 2018 and joined the Coalition for Disaster Resilient Infrastructure (CDRI).
  • Digital & Technology: The establishment of the India–EU Trade and Technology Council in 2022 marked a new era of cooperation in digital governance, AI, and cybersecurity.
• High-Level Engagements: India and EU have met on the sidelines of major global events including the G20, G7, and several global forums.
  • The EU College of Commissioners’ visit to India in February 2025 further reinforced the strategic importance of the partnership.

EU’s Perspective on the Partnership

• The EU and India are accelerating negotiations on a Free Trade Agreement (FTA), Investment Protection Agreement (IPA), and Geographical Indications (GI) Agreement. Key highlights include:
  • Both are committed to finalize the FTA and launch a new security and defence pact by the end of 2025 to elevate their strategic partnership.
  • Market Access: Strengthening India’s integration into European value chains while improving EU exporters’ access to Indian markets.
  • Sustainability: Embedding commitments on climate action, green technologies, and responsible supply chains.
  • Digital Trade: Cooperation on secure and open digital ecosystems.
  • Strategic Autonomy: Both aim to reduce dependency on single-source suppliers by diversifying trade.

India’s Standpoint

• India views the EU as a reliable partner for technology transfer, green hydrogen, and digital innovation. It includes:
  • Job Creation: Ensuring the trade pact supports India’s manufacturing and service sectors.
  • Atmanirbhar Bharat (Self-Reliant India): Leveraging EU investments to boost domestic capacity in green energy, semiconductors, and critical technologies.
  • SME Participation: Promoting small and medium enterprises in accessing EU markets.
  • Balanced Commitments: Ensuring that intellectual property and sustainability clauses do not disadvantage India’s developmental needs.

Key Concerns & Challenges Ahead

• Trade Negotiations & Tariff Barriers: India’s protective tariffs and EU’s agricultural, cars, alcohol, and dairy products subsidies remain contentious.
  • The EU has raised concerns thatIndia’s Qualitative Control Orders (QCOs) may act as non-tariff barriers, especially if they disproportionately affect European exports like automobiles, dairy, and wine.
• Russia Factor: The EU has raised concerns over India’s close engagement with Russia, citing participation in the Zapad-2025 Military Exercises and continued purchases of Russian oil.
• Strategic Disconnect: The relationship is often described as ‘high on promise, short on delivery’.
• Institutional Gaps & Coordination: The current India–EU Strategic Partnership Roadmap (2020–2025) is broad but lacks operational clarity.
  • The newly formed Trade and Technology Council (TTC) is promising, but its working groups are still in early stages of coordination
• Data Privacy Rules: India’s Digital Personal Data Protection Act (2023) and EU’s GDPR need harmonization.
• Climate Commitments: Differences in pace and financing of energy transition.
• Regulatory & Standards Alignment: Differences in digital governance, data protection, and green standards pose hurdles to deeper cooperation.
  • India seeks flexibility, while the EU pushes for stringent regulatory alignment, especially in areas like AI, cybersecurity, and sustainability.

Way Forward

• Renewal of Strategic Roadmap: A new five-year roadmap is expected to be launched at the next India–EU Summit in early 2026, with key focus areas like supply chain resilience, critical minerals, digital governance, and defence cooperation.
• Deepening Strategic Convergence: Both sides are aligning on China de-risking, Indo-Pacific engagement, and technology sovereignty.
  • India’s demographic dividend and EU’s innovation ecosystem offer complementary strengths.
• Institutional Strengthening: Expansion of the India–EU Trade and Technology Council (TTC);
• Balancing Domestic Priorities & Global Ambitions: India’s push for Qualitative Control Orders (QCOs) needs to be harmonized with EU standards to avoid trade friction.
  • The FTA is seen as a transformative pillar—both sides aim to conclude it by the end of 2025, though tariff issues remain contentious.

Source: TH