Europe’s Growing Role in India’s Diplomacy

Syllabus: GS2/IR

Context

• British PM Keir Starmer’s visit to India, new EFTA trade pact, and EU trade negotiations indicate Europe’s growing role in India’s diplomacy.

Triggers for Western Pluralism:

• US Policy Shifts under Trump: “America First” nationalism questioned alliances and security commitments.
  • It undermined the global institutions and trade norms.
• Internal Divisions within the West: The western countries have disagreements on various global issues such as Russia, China, trade, and technology.
  • Europe itself begins to develop its own geopolitical act rather than remain a mere extension of the US within the so-called “collective West.”
• Europe’s Response: It has called for strategic autonomy and continental sovereignty.
  • European Commission President Ursula von der Leyen declared that “Europe must be prepared to stand on its own feet — economically, technologically, and militarily.

India-EU Relations 

• Political cooperation: India-EU relations date to the early 1960s, and a cooperation agreement signed in 1994 took the bilateral relationship beyond trade and economic cooperation.
  • The first India-EU Summit, in 2000, marked a landmark in the evolution of the relationship. 
  • At the 5th India-EU Summit at The Hague in 2004, the relationship was upgraded to a ‘Strategic Partnership’. 
• Economic cooperation: India’s bilateral trade in goods with the EU was USD 137.41 billion in 2023-24, making it the largest trading partner of India for goods.
  • EU is India’s largest trading partner for goods, 17% of India’s exports go to the EU and 9% of EU exports come to India.
• India-EU Free Trade Agreement (FTA) Negotiations: 
  • Negotiation Resumption: Talks resumed in 2022 after an 8-year hiatus .
  • Objective: To finalize a comprehensive trade agreement covering goods, services, investments, and geographical indications.
  • Prime Minister Narendra Modi and the European Commission President agreed to seal the deal by the end of this year.
• Other areas of cooperation:
  • The India-EU Water Partnership (IEWP), established in 2016, aims to enhance technological, scientific, and policy frameworks in water management.
  • In 2020, there was an agreement for research and development cooperation in the peaceful uses of nuclear energy between the European Atomic Energy Community and the Government of India.
  • India and the EU established the Trade and Technology Council (TTC) in 2023. The TTC is a forum for the two parties to collaborate on trade, technology, and security. The TTC’s goals.
• India’s Two Levels of Engagement
  • EU as a bloc: Regular summits, strategic dialogues on trade, tech, security, foreign policy.
  • Bilateral with major EU members: Deepening ties with France, Germany, Nordic and Eastern European countries.

Factors Shaping India-Europe Relations:

• Geopolitical Shifts and Strategic Autonomy: Return of war in Europe (Russia–Ukraine) and the global erosion of multilateralism.
  • Europe seeking greater strategic autonomy from the US especially post-Trump era.
  • India aims to maintain a multipolar world order while diversifying its partnerships beyond the US, Russia, and China.
• Trade and Economic Cooperation: EU is one of India’s largest trade and investment partners.
  • India and EU are keen on concluding India–EU Free Trade Agreement (FTA) and Investment Agreement.
  • IMEC (India–Middle East–Europe Corridor) provides opportunities for strategic connectivity and trade.
• Technology and Digital Sovereignty: Both have the shared interest in promoting digital technologies as public goods.
  • India can benefit from Europe’s strengths in deep tech, semiconductors, and digital manufacturing.
• Defence and Strategic Cooperation: Europe is a key arms supplier to India.
  • India seeks joint development, co-production, and technology transfer.
  • Europe is rearming due to the Ukraine war; India is pursuing Atmanirbharta (self-reliance).
• Indo-Pacific and Maritime Strategy: Europe increasingly views the Indo-Pacific as a strategic priority.
  • India is working with France, Germany, and others to promote free and open Indo-Pacific.

Challenges in the India – EU Relations

• India’s Stand on Ukraine War: Europe expects India to be more critical of Russia; India maintains strategic neutrality.
• EU’s Stand on Pakistan and Terrorism: India expects the EU to hold Pakistan accountable for state-sponsored terrorism.
• Slow Progress on Trade Agreements: The India–EU Free Trade Agreement (FTA) negotiations have faced multiple deadlocks.
• Carbon Border Adjustment Mechanism (CBAM) imposed by the EU creates additional trade barriers for India.
• Human Rights and Normative Pressure: EU often adopts a prescriptive stance on India’s internal matters (e.g., Kashmir, CAA, farm laws).
  • India views this as interference in domestic affairs, causing diplomatic friction.
• Regulatory and Standards Barriers: EU’s strict regulations on data privacy, digital taxation, environmental standards, and labour laws are hurdles for Indian exporters and tech firms.
• Media stereotypes and limited public awareness in Europe with respect to India hinder people-to-people ties.

Way Ahead

• Fast-Track Trade and Investment Agreements: Conclude the long-pending India–EU Free Trade Agreement and Investment Protection Agreement.
• Deepen Strategic and Defence Cooperation: Move beyond buyer-seller relationship to joint development and co-production of defence technologies.
• Expand Mobility and Education Partnerships: Finalise a comprehensive mobility agreement for skilled professionals, students, and researchers.
• Build Resilient Supply Chains: Diversify away from China by promoting trusted, transparent supply chains.
  • Leverage initiatives like IMEC (India-Middle East-Europe Corridor) for logistics, energy, and trade.
• Enhance People-to-People and Cultural Ties: Promote tourism, media engagement, and cultural exchanges to break stereotypes and deepen mutual understanding.

Conclusion

• The evolving Western pluralism, marked by Europe’s rearmament and diversified trade creates both opportunities and challenges for India. 
• It expands India’s diplomatic space while demanding faster domestic adaptation to leverage economic and strategic advantages in a more multipolar world.

Source: IE