From UPSC perspective, the following things are important :
Prelims level : European Union
Mains level : Paper 2- Commonalities and areas of cooperation with the EU
India and the EU have many things in common. And there are many areas in which both can expand the cooperation. This article explores commonalities and the areas which offer the scope for enhancing the cooperation.
- Both aim to enhance strategic autonomy and their global standing.
- Diversifying strategic value chains is also a common interest.
- Both seek to address the issue of climate change on an urgent basis.
Economic ties with the EU
- The EU is India’s largest trading partner accounting for €80 billion worth of trade in goods in 2019.
- This is equal to 11.1% of total Indian trade.
- The EU is also the biggest foreign investor, with €67.7 billion worth of investments made in 2018.
- Which is equal to 22% of total FDI inflows.
Scope for improving the economic ties
- The EU’s investments in China amounted to €175.3 billion (2018).
- So, India could succeed in attracting EU investment that might be moving out of China.
- To attract this outflowing investment, India must address the mutual trust deficit.
- Enhanced business cooperation can help both the EU and India diversify their strategic value chains.
- Increasing people’s mobility and connectivity is another area that can create opportunities for innovation and growth.
Talks on FTA
- Both sides need to move further on the Free Trade Agreement.
- A new study from the European Parliament estimates the impact of an EU-India trade agreement between €8 billion and €8.5 billion.
- The study also mentions additional potential gains from enhanced coordination on the provision of global public goods, such as environmental standards.
Cooperation on climate change
- Under the new industrial strategy, the Green Deal, the EU has set an ambitious target to be carbon-emission neutral by 2050.
- If the EU and India succeed in transforming into carbon-neutral economies by 2050, we all would gain from the investment.
Strategic partnership with EU
- The Indo-Pacific region is becoming contentious, so India should capitalise on its geopolitical leverage there.
- Cooperation with like-minded, democratic powers can support this effort, especially towards assertive competitors like China.
- The EU as a whole offers more to India than the strongest bilateral relations with individual EU member state.
- New Delhi must learn how to maximise benefits from this strategic partnership.
- The disruption caused by COVID-19 has been the occasion for the EU to prove its worth.
- “Next-generation EU proposal” submitted by the European Commission has economic as well as geopolitical implications.
- The proposal shows that the ties that bind the EU extend well beyond treaties and individual members’ self-interest.
- The EU champions the rules-based international order, so the EU and India must act to promote sustainable reform of multilateral institutions starting from the WTO.
Consider the question “India-EU ties with many common interests assume significance as rule-based order is being challenged by the rise of exceptionalism. Comment.”
A strong partnership would help both the EU and India become global decision-makers and tackle the challenges caused by the disruption of global order collectively.