<p>With the conclusion of the first round of India-EU Free Trade and Investment Agreements (FTA) negotiations in July 2022, positive momentum in New Delhi-Brussels' strategic ties is apparent. Solid momentum was provided in 2021 with a successful India-EU Summit. Since then, global circumstances have provided both sides with opportunities to consolidate relations further. The resumption of negotiations on the Bilateral Trade and Investment Agreement (BTIA) after a gap of eight years is a positive development not only for India and the European Union but also for allies and like-minded partners globally.</p>.<p><strong>Read | <a href="https://www.deccanherald.com/international/world-news-politics/china-s-ship-yuanwang-5-now-docked-close-to-india-s-southern-coast-1136482.html" target="_blank">China’s ship Yuanwang-5 now docked close to India’s southern coast</a></strong></p>.<p>A range of issues is already on the table for the upcoming rounds of negotiations in September 2022. In this regard, the role of the India-EU Trade and Technology Council (TTC) holds particular importance. In April this year, during European Commission president Ursula von der Leyen's visit to New Delhi, both sides struck a deal to form the India-EU Trade and Technology Council. The key areas of focus under the TTC are Artificial Intelligence (AI), 5G and cross-border data sharing. The TTC is India's first-of-its-kind arrangement with any of its partners. Similarly, the United States is the only country with which the EU shares a TTC partnership. To actively boost the overall India-EU economic ties via the Trade Technology Council, the road to trade negotiations could be intense yet promising.</p>.<p>India-EU signed the Strategic Partnership Agreement in 2004. Beset by uncertainties and ambiguity over issues like tariffs, entry barriers, investment protection and market access, both sides had attempted earlier to strike a Free Trade Agreement (FTA), which failed to fructify. The FTA negotiations, which started in 2007, reached a deadlock by 2013. However, as India and the EU seek to promote a reciprocal understanding of economic and financial market developments, there is an<br />underlying need to reduce the gap on both sides.</p>.<p>India and the European Union represent a combined GDP of €16.5 trillion annually and a combined market of 1.8 billion people. India is also one of the EU's most important trade and investment partners. In 2020, the EU stood as India's third-largest trading partner accounting for €62.8 billion worth of trade in goods. It accounted for 11.1 per cent of total Indian trade. In 2021-22, the bilateral trade between New Delhi-Brussels witnessed a growth of 43.5 per cent.</p>.<p>Moreover, the EU is also the second-largest destination for Indian exports after the US. However, despite deepening strategic relations between Brussels and New Delhi, India still ranks as the tenth largest trading partner for the EU. In 2020, India accounted for merely 1.8 per cent of total trade in goods for the EU.</p>.<p><strong>Moving beyond the donor-recipient equation</strong></p>.<p>A successful India-EU FTA portends a bilateral transition beyond just a donor-recipient to a development partnership. Brussels' invocation of New Delhi as a "credible, crucial and reliable" trade partner laid out in its 2018 Strategy on India is a precursor to the "Comprehensive Connectivity Partnership" (CCP). Given India-EU's deep-rooted belief in multilateralism and sustainable development, India-EU renewed economic partnership abounds with possibilities of mutual benefits. Notably, the CCP also rides on the ambition to create "resilient and sustainable connectivity projects" in other countries of the Indo-Pacific region and Central Asia.</p>.<p>India-EU must utilise the massive economic opportunity potential. For one, India's demography offers wide-ranging economic benefits not only to India and the EU but also to various other like-minded stakeholders. As mobility to Europe from India increases further, this trend is expected to create more opportunities. As such, arriving at a consensus on various initiatives under the CCA and FTA, India-EU's renewed strategic vigour in the economic realm will require creating new formulations of comprehensive institutional mechanisms and reassessing old ones.</p>.<p>Both sides need to reassess lacunas in arrangements like the High-Level Economic and Trade Dialogue and Economic and Financial Dialogue. With a comprehensive institutional mechanism, it would be in the mutual interest of India-EU to harness long-term economic benefits. The institutional mechanism will also help New Delhi and Brussels avoid any deadlock over issues such as barriers to trade in services (movement of natural persons, recognition of professional qualifications across EU), wage equality, work permits in particular and various other issues relating to the General Agreement on Trade and Services in general.</p>.<p>In addition, India and the EU need to iron out divergences over New Delhi's status as a data secure partner and issues related to intellectual property protection standards. As New Delhi aspires to be an integral part of the global value chain, together with its consistent efforts towards building advanced technology and manufacturing capacity, it will likely unfold gains not only for India-EU but for various small countries of the Indo-Pacific region as well.</p>.<p>The European Council's Indo-Pacific Strategy underscores an evolving synergy between regional objectives and bilateral goals together with countries of the region like India. However, the EU's Indo-Pacific approach is evidently ambivalent towards China. Brussels' approach avoids geopolitical confrontation with China in the region. However, Indo-Pacific strategies of individual EU member states such as France, Germany and the Netherlands find more convergences with India's conception of the Indo-Pacific region, strengthening consensus between the two sides.</p>.<p>Increasing trade dependence on China is a factor in trade for both India and the EU. When India is looking for a reliable trade partner to diversify its trade over-dependence from China, there are pertinent questions related to trust and reliability over China in Europe. The underlying systemic rivalry between Brussels and Beijing is deepening. While on the other side, the Chinese incursions on the Indian borders have not ceased. It is the ripe time for New Delhi and Brussels to widen the ambit of their "natural allies" umbrella to include each other through deeper and cohesive economic engagements.</p>.<p><em>(Vivek Mishra is a Fellow, Strategic Studies Program, ORF, New Delhi, and Dubey is Research Associate at Defence Research and Studies)</em></p>.<p><strong>Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of <em>DH</em>.</strong></p>
<p>With the conclusion of the first round of India-EU Free Trade and Investment Agreements (FTA) negotiations in July 2022, positive momentum in New Delhi-Brussels' strategic ties is apparent. Solid momentum was provided in 2021 with a successful India-EU Summit. Since then, global circumstances have provided both sides with opportunities to consolidate relations further. The resumption of negotiations on the Bilateral Trade and Investment Agreement (BTIA) after a gap of eight years is a positive development not only for India and the European Union but also for allies and like-minded partners globally.</p>.<p><strong>Read | <a href="https://www.deccanherald.com/international/world-news-politics/china-s-ship-yuanwang-5-now-docked-close-to-india-s-southern-coast-1136482.html" target="_blank">China’s ship Yuanwang-5 now docked close to India’s southern coast</a></strong></p>.<p>A range of issues is already on the table for the upcoming rounds of negotiations in September 2022. In this regard, the role of the India-EU Trade and Technology Council (TTC) holds particular importance. In April this year, during European Commission president Ursula von der Leyen's visit to New Delhi, both sides struck a deal to form the India-EU Trade and Technology Council. The key areas of focus under the TTC are Artificial Intelligence (AI), 5G and cross-border data sharing. The TTC is India's first-of-its-kind arrangement with any of its partners. Similarly, the United States is the only country with which the EU shares a TTC partnership. To actively boost the overall India-EU economic ties via the Trade Technology Council, the road to trade negotiations could be intense yet promising.</p>.<p>India-EU signed the Strategic Partnership Agreement in 2004. Beset by uncertainties and ambiguity over issues like tariffs, entry barriers, investment protection and market access, both sides had attempted earlier to strike a Free Trade Agreement (FTA), which failed to fructify. The FTA negotiations, which started in 2007, reached a deadlock by 2013. However, as India and the EU seek to promote a reciprocal understanding of economic and financial market developments, there is an<br />underlying need to reduce the gap on both sides.</p>.<p>India and the European Union represent a combined GDP of €16.5 trillion annually and a combined market of 1.8 billion people. India is also one of the EU's most important trade and investment partners. In 2020, the EU stood as India's third-largest trading partner accounting for €62.8 billion worth of trade in goods. It accounted for 11.1 per cent of total Indian trade. In 2021-22, the bilateral trade between New Delhi-Brussels witnessed a growth of 43.5 per cent.</p>.<p>Moreover, the EU is also the second-largest destination for Indian exports after the US. However, despite deepening strategic relations between Brussels and New Delhi, India still ranks as the tenth largest trading partner for the EU. In 2020, India accounted for merely 1.8 per cent of total trade in goods for the EU.</p>.<p><strong>Moving beyond the donor-recipient equation</strong></p>.<p>A successful India-EU FTA portends a bilateral transition beyond just a donor-recipient to a development partnership. Brussels' invocation of New Delhi as a "credible, crucial and reliable" trade partner laid out in its 2018 Strategy on India is a precursor to the "Comprehensive Connectivity Partnership" (CCP). Given India-EU's deep-rooted belief in multilateralism and sustainable development, India-EU renewed economic partnership abounds with possibilities of mutual benefits. Notably, the CCP also rides on the ambition to create "resilient and sustainable connectivity projects" in other countries of the Indo-Pacific region and Central Asia.</p>.<p>India-EU must utilise the massive economic opportunity potential. For one, India's demography offers wide-ranging economic benefits not only to India and the EU but also to various other like-minded stakeholders. As mobility to Europe from India increases further, this trend is expected to create more opportunities. As such, arriving at a consensus on various initiatives under the CCA and FTA, India-EU's renewed strategic vigour in the economic realm will require creating new formulations of comprehensive institutional mechanisms and reassessing old ones.</p>.<p>Both sides need to reassess lacunas in arrangements like the High-Level Economic and Trade Dialogue and Economic and Financial Dialogue. With a comprehensive institutional mechanism, it would be in the mutual interest of India-EU to harness long-term economic benefits. The institutional mechanism will also help New Delhi and Brussels avoid any deadlock over issues such as barriers to trade in services (movement of natural persons, recognition of professional qualifications across EU), wage equality, work permits in particular and various other issues relating to the General Agreement on Trade and Services in general.</p>.<p>In addition, India and the EU need to iron out divergences over New Delhi's status as a data secure partner and issues related to intellectual property protection standards. As New Delhi aspires to be an integral part of the global value chain, together with its consistent efforts towards building advanced technology and manufacturing capacity, it will likely unfold gains not only for India-EU but for various small countries of the Indo-Pacific region as well.</p>.<p>The European Council's Indo-Pacific Strategy underscores an evolving synergy between regional objectives and bilateral goals together with countries of the region like India. However, the EU's Indo-Pacific approach is evidently ambivalent towards China. Brussels' approach avoids geopolitical confrontation with China in the region. However, Indo-Pacific strategies of individual EU member states such as France, Germany and the Netherlands find more convergences with India's conception of the Indo-Pacific region, strengthening consensus between the two sides.</p>.<p>Increasing trade dependence on China is a factor in trade for both India and the EU. When India is looking for a reliable trade partner to diversify its trade over-dependence from China, there are pertinent questions related to trust and reliability over China in Europe. The underlying systemic rivalry between Brussels and Beijing is deepening. While on the other side, the Chinese incursions on the Indian borders have not ceased. It is the ripe time for New Delhi and Brussels to widen the ambit of their "natural allies" umbrella to include each other through deeper and cohesive economic engagements.</p>.<p><em>(Vivek Mishra is a Fellow, Strategic Studies Program, ORF, New Delhi, and Dubey is Research Associate at Defence Research and Studies)</em></p>.<p><strong>Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of <em>DH</em>.</strong></p>