Topic: General Studies 2,3:
- Effect of policies and politics of developed and developing countries on India’s interests
- Important International institutions, agencies and fora- their structure, mandate.
India should believe in the EU
Context: In the post-COVID world, there will challenges for India to decide on which partner to invest its geopolitical capital
The EU and India have much in common like:
- Both aim to enhance strategic autonomy and their global standing.
- Need for diversifying strategic value chains (moving away from China-centrism)
- Address climate change.
Significance of India-EU relationship
- EU champions the rules-based international order (that India also supports), which is being increasingly challenged by the proliferation of exceptionalism.
- In geopolitical terms, India is facing increasingly powerful rival in China.
- A stronger cooperation with like-minded, democratic powers like EU can help India face its rival effectively in geopolitics
India and EU – An opening for enhanced economic partnership
- EU is India’s first trading partner and the biggest foreign investor, with €67.7 billion worth of investments made in 2018 (22% of total FDI inflows)
- However, EU investments in China in 2018 amounted to €175.3 billion
- In post COVID world, there is scope for India in attracting EU investment that might be moving out of China
What steps need to be taken for enhancing the relationship in future?
- Both sides must address the mutual trust deficit.
- There is a need for facilitating people’s mobility and connectivity for improving mutual understanding
- Need to fast track the stagnating Free Trade Agreement (FTA) negotiations.
- A new study from the European Parliament assesses the potential impact of an EU-India trade agreement at between €8 billion and €8.5 billion gains from increased trade for both sides
- Collaboration on Climate Change
- Through its new industrial strategy, the Green Deal, EU is building on its ambitious target to render the continent carbon-emission neutral by 2050.
- India has also announced ambitious targets in Paris Climate deal
- Thus, both can collaborate on technology front to achieve their targets
- Reforming Multilateral Institutions
- The EU and India must join forces to promote sustainable reform of multilateral institutions, with the World Trade Organization (WTO) first in line.
India should make calculated moves in foreign policy in post-COVID world so that its interests are not compromised due to realignment of global power equations
Connecting the dots:
- EU and ASEAN – Difference in their structures
- Impact of COVID-19 on multilateral organisations