India-European Union Relations

What is European Union?

The European Union (EU) is a political and economic union of 27 member states located primarily in Europe. The EU was established by the Maastricht Treaty, which entered into force on November 1, 1993. The main goal of the EU is to promote cooperation and integration among its member states in order to enhance economic and political stability in Europe. The EU has its own currency, the Euro, which is used by 19 of the member states. It has a single market where goods, services, and capital can move freely.

What is the genesis and evolution of the EU?

The EU has its roots in the aftermath of World War II when European leaders sought to promote peace, stability, and prosperity in the continent. 

• European Economic Community (EEC), 1957: It was established by the Treaty of Rome. It aimed to create a common market among its member states and to promote economic growth and cooperation.
• European Free Trade Association, 1960: It was created to promote free trade and economic integration between certain countries not in the EEC.
• First direct elections to the European Parliament in 1979
• Launch of the Erasmus Programme, 1987: It is launched to fund university students wishing to study in another European country. 
• Maastricht Treaty, 1993: It transformed the EC into the EU and expanded the scope beyond economic integration to include political, social, and security policies. 
• Euro introduced, 1999: The euro was introduced in 11 countries for commercial and financial transactions only.
• Treaty of Lisbon, 2007: It aimed to make the EU more democratic, efficient and transparent, and thereby able to tackle global challenges such as climate change, security and sustainable development.
• Croatia became the 27th EU member in 2013.
• United Kingdom(UK) votes to leave the EU, 2016: In a referendum in 2016, 52% of voters in the UK voted for the UK to leave the EU.
  • The United Kingdom left the EU in 2020.

What is the governance structure of the EU?

There are 4 main decision-making institutions that lead the EU’s administration.

• European Council: The European Council is made up of the heads of state or governments of the EU member states. It sets the EU's overall political direction.
• European Commission: The European Commission is the executive branch of the EU.
• European Parliament: The European Parliament is the directly elected legislative body of the EU.
• Council of the EU: It is the main decision-making body of the EU. It represents the interests of member states and is responsible for adopting legislation and coordinating policies.

The work of the above institutions is complemented by other institutions and bodies, which include:

• Court of Justice of the European Union: It is the supreme court of the EU. It ensures that EU law is interpreted and applied in a consistent manner across all member states.
• European Central Bank: It is responsible for keeping prices stable in the euro area and its monetary and exchange rate policy.
• European Court of Auditors: It contributes to improving EU financial management and acts as the independent guardian of the financial interests of EU citizens.

 

How has the relationship between India and the EU evolved over the years?

India and the EU have a long and multifaceted relationship. This can be concluded from the fact that the EU is India's largest trading partner.

Some of the major events marking the evolution of the relationship between the two are              

• Early 1990s: Relations between India and the EU began to strengthen in the 1990s when India began its process of economic liberalization, and the EU began to expand its membership. 
• Cooperation Agreement, 1994: In 1994, the two sides established a Cooperation Agreement, which served as the basis for their strategic partnership. 
• First India-EU Summit, 2000: The first India-EU Summit marked a watershed in the evolution of the relationship.
• Joint Action Plan, 2005: In 2005, the EU and India signed a Joint Action Plan, which further strengthened their cooperation in a range of areas, including trade, investment, education, and research.
• Renewed Dialogue between India and the EU, 2017: In 2017, the two sides launched a new dialogue on foreign policy, defense, and security, which has helped to further deepen their cooperation.
• Present times: In recent years, the EU and India have also worked together on issues related to international peace and security, climate change, and sustainable development. 

 

What are the areas of cooperation between India and the EU?

• Economic cooperation: 
  • Trade: The EU is one of India's largest trading partners, with bilateral trade totaling over €88 billion in 2021. India is also the EU's 10th largest trading partner.
  • Investment: The EU is also a major source of investment for India, with the EU’s share in foreign investment stock in India increasing from €63.7 billion in 2017 to €87.3 billion in 2020. On the other hand, Tata Group, an Indian multinational conglomerate, has a significant presence in the EU (France, Italy, etc.)
  • Infrastructure development: The EU has supported India's efforts to modernize its infrastructure, including through the financing of projects in sectors such as energy and transport.
• Political
  • Strategic partnership: The EU and India have a strategic partnership, which includes regular high-level political dialogue and cooperation on issues such as counter-terrorism and non-proliferation.
  • Development assistance: The EU has provided development assistance to India, including support for programs in areas such as health, education, and agriculture.
  • Cooperation on terrorism, cyber security, and climate change: The two sides have jointly held a number of conferences and workshops on cyber security and have cooperated on efforts to combat terrorism.
• Security cooperation: The EU and India have worked together on regional and global security issues, including through the United Nations and other multilateral organizations.
• Research and Innovation: The EU and India have cooperated on scientific research and innovation, including through the EU's Horizon 2020 program. This program supports joint research and innovation projects in areas such as renewable energy, health, and advanced materials.
• Cultural and educational exchange: The EU and India have a number of cultural and educational exchange programs, including the Erasmus+ program, which allows Indian students to study in the EU and vice versa.
• Multilateral cooperation: The EU and India cooperate on a range of global issues, including climate change, development, and security. The EU has supported India's efforts to gain greater access to the global trade system, including WTO.

 

What are the challenges in India-EU relations?

There are certain challenges also in India-EU relations. Some of the areas of contention between the two are

• Trade: There have been some issues in the trade relationship between the two despite strong economic ties.
  • Example: EU has criticized India's high tariffs on certain products, such as automobiles and pharmaceuticals, and has sought greater access to the Indian market for its products in these sectors.
• Global security: There have also been some differences in their approaches to security, particularly with regard to issues such as Afghanistan and the Middle East.
• Intellectual property: The EU has raised concerns about India's intellectual property regime, particularly with regard to issues such as patent protection and the enforcement of intellectual property rights.
  • Example: It has criticized India's decision to issue a compulsory license for a cancer drug, which it argued undermined the intellectual property rights of the company that held the patent for the drug.

• Human rights and governance: The EU has raised concerns about human rights and governance issues in India, including issues such as religious freedom, the treatment of minorities, and the rule of law.
  • Example: EU has expressed concern about the Citizenship Amendment Act 2019.

• Climate change: The EU and India have different perspectives on issues related to climate change, and this has sometimes led to differences in their approaches to addressing this global challenge.

• Differences in foreign policy: The EU and India have sometimes had differences in their foreign policy approaches, particularly with regard to issues such as the Balkans, Iran, and the Israeli-Palestinian conflict.

 

What should be the way forward?

There are a number of steps that could be taken to further strengthen the relationship between India and the EU. Some of the key areas where progress could be made include

• Trade and investment: Deepening ties between trade and investment could include working to resolve trade disputes, liberalizing trade in goods and services, and promoting greater two-way investment.
• Political and security cooperation: Further cooperation on issues like   counterterrorism, cyber security, and climate change. This can include increased collaboration on intelligence sharing, joint training and capacity building, and cooperation in multilateral forums.
• Research and innovation: Increased cooperation in areas of mutual interest such as renewable energy, health, and advanced materials. This could include supporting joint research and innovation projects, as well as exchanges between researchers and students.
• Cultural and people-to-people exchanges: The EU and India should continue to promote cultural and people-to-people exchanges, such as through educational and cultural exchange programs. 
• Multilateral cooperation: The EU and India should work together in multilateral forums such as the United Nations, the WTO, and the G20 to address global challenges and promote shared values.