India-EU Partnership Prospects
A recent visit to Brussels highlights the significant work required to realize the potential of the India-EU Free Trade Agreement (FTA) and to foster a closer economic and technological relationship in the era of artificial intelligence (AI).
Geopolitical Motivations
- Both India and Europe are concerned about a potential US-China duopoly.
- In Europe, there is fear of abandonment, while India worries about the stability of its long-standing partnership with the US.
Challenges within the EU
- The EU lacks political coherence, evident in:
- Diverse approaches to security threats like Russia.
- Unclear diplomatic stance on re-engaging with Russia and peacebuilding in the Iran conflict.
- The EU struggles with competitiveness against the US and China.
- The Mario Draghi report on Europe's competitiveness calls for greater integration and investment, yet actions remain limited.
India’s Strategic Actions
- Maintain momentum in FTA negotiations, aiming for early ratification.
- Conclude the Investment Protection Agreement and Geographical Indications Agreement swiftly.
- Reactivate the India-EU Trade and Technology Council (TTC).
Concerns and Opportunities
- The EU’s Carbon Border Adjustment Mechanism (CBAM) could pose challenges due to ambiguous procedures and potential non-tariff barriers.
- India must work on promoting capital flow from Europe, leveraging bilateral relations with countries like France and Germany.
- Strengthen defence and security partnerships, given Europe’s investment in defence capabilities.
- Ensure technology transfer frameworks while addressing concerns about technology leaks to Russia.
Diplomatic Imperatives
- Address widespread ignorance in Europe about India’s economic and technological capabilities through proactive diplomacy.
Note: These insights are based on the personal views of the writer, a former foreign secretary, and do not necessarily reflect the opinions of Business Standard.
