Europe and India: building momentum for a transformative partnership

#CriticalThinking

Global Europe

Picture of Dr Cristina Vanberghen
Dr Cristina Vanberghen

Senior Expert at the European Commission and Professor (Fellow) at the European University Institute (EUI)

Photo of This article is linked to State of Europe – the festival of politics and ideas.
This article is linked to State of Europe – the festival of politics and ideas.

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State of Europe is a fixture and a highlight of the European calendar. The reason is simple: it is a forum for today’s top leaders from the worlds of politics, business and civil society, from Europe and beyond, to connect, debate and develop ideas on key policy areas that will define Europe’s future.

The State of Europe high-level roundtable involves sitting and former (prime) ministers, CEOs, NGO leaders, European commissioners, members of parliaments, influencers, artists, top journalists and European Young Leaders (EYL40) in an interactive and inclusive brainstorm – a new way of working to generate new ideas for a new era.

The 2023 roundtable focused all of its attention on deliberating 10 policy choices for a Renewed Social Contract for Europe that will be disseminated ahead of the 2024 European elections and ensuing new mandate. The 10 policy choices will be the result of year-long multisectoral and multi-stakeholder consultations and will take into consideration the voices and opinions of over 2,000 European citizens.

As Friends of Europe progresses on its road towards a Renewed Social Contract for Europe by 2030, State of Europe serves as an opportunity for entrepreneurs, politicians, legislators, corporates, civil society, citizens and thought leaders to brainstorm solutions and ways out of the current polycrisis. The big-ticket items and trends that demanded our attention at the 2023 event included: money, debt, hardship, conflict, corruption and elections.

Learn more about State of Europe and the 2023 edition, ‘10 policy choices for a Renewed Social Contract for Europe’.

As India reassesses – and reasserts! – its international position in the wake of its massively successful G20 chairmanship, it has realised that Europe is a partner of choice for many of its mid-century ambitions. The EU-India bilateral relationship has picked up real momentum in the past weeks. The two democratic powers are forging a deep and wide relationship across the economic, technological and political spectrum that can become a centre of stability in an unpredictable world. This momentum is inspiring hope, transcending boundaries and has the potential to create a connected, prosperous and harmonious society for the citizens of India and the European Union and an example for the rest of the world.

Simply on the economic front, bilateral trade between India and Europe hit $100bn in 2021, reflecting a decade-long trend of steady growth. And European investors are increasingly drawn to India, with EU foreign direct investment (FDI) surpassing $80bn in 2021 – a signal of confidence in India’s market. Indian investment in Europe is also increasing. Strategic cooperation in counterterrorism, climate change and maritime security reflects common values in promoting democracy and human rights. Most important of all, both India and Europe are committed to combating climate change and reaching net zero and have stepped up cooperation on clean energy, climate-smart industry and sustainable development. Collaboration in research and innovation, people-to-people ties and the 2021 EU-India Connectivity Partnership are the ‘humanware’ of this burgeoning relationship which is greatly overdue.

The collaborative efforts between India and Europe as strategic partners reflect India’s potential rise to be the world’s third-largest economy and stock market by 2027.

And now a few key pointers on how the relationship is developing and can thrive more.

Digital transformation and fintech: The EU-India Connectivity Partnership, particularly in digital transformation and fintech, holds immense potential. One example: France’s adoption of India’s Unified Payments Interface (UPI) highlights the unique potential for seamless and cost-effective digital transactions. This creates an opportunity for other EU members to enhance their digital capabilities through collaboration with India, which can teach Europe a lot.

Strategic dialogue: The Strategic Dialogue framework, including Summits, ministerial meetings and working groups, is a key mechanism for addressing political, economic and security issues. It is the main channel for the EU and India to examine global governance problems and consider reforms to multilateral institutions, how best to manage the pivot to the Global South and how to ensure help to and equitable contributions from low- and middle-income countries .

Defence and security: Deeper defence and security cooperation, focusing on countering common security challenges in the Indo-Pacific region, is currently being explored. Europe and India have a long-term interest in a multipolar Indo-Pacific. The ‘Make in India’ campaign and efforts to diversify defence equipment sources are as a result more relevant than ever.  Dependencies carry risks, as India’s Foreign Minister has eloquently argued, and so the EU will encourage India to reduce its defence dependency on Russia and both sides will evaluate how to de-risk from China.

Trade negotiations: Ongoing negotiations on the Free Trade Agreement (FTA) and Investment Agreement between India and the EU are also deemed vital for the bilateral relationship. At the end of the day, trade is an end in itself and often the most visible and contested area of a relationship. India and the EU approach this negotiation as willing and equal partners, keen to strike a hard but fair bargain for their workers, their companies and their consumers. An FTA, an investment agreement and a geographical indications (GI) agreement (key for rural communities) are likely to be lasting testaments to the health of the relationship.

Joint effort and digitalisation: The collaborative efforts between India and Europe as strategic partners reflect India’s potential rise to be the world’s third-largest economy and stock market by 2027. Digitalisation is a crucial element of this development, reflected both in the FTA agenda and the EU and India’s decision to launch a Trade and Technology Council (TTC). The TTC is positioned as a platform for strategic engagement on trade, trusted technology and security, emphasising the importance of establishing strategic clarity regarding the objectives and benefits of technology exchange and integration.

The EU’s collaboration with India is a significant milestone in our journey towards digital and infrastructure connectivity

Eight recommendations for future cooperation 

  • The TTC should evolve into a platform for systematic dialogue on the digital autonomy agenda, implementing shared democratic principles.
  • Establish an information-sharing mechanism to combat disinformation and foreign digital interference, with a focus on international collaboration.
  • Forge stronger partnerships in digital technologies and industries through cooperation agreements and joint ventures.
  • Identify strategic sectors such as artificial intelligence, smart medical products, and data and cyber securities for future industrial cooperation.
  • Reduce barriers to research and development (R&D) cooperation for semiconductor companies, focusing on investment in joint fabrication plants and open hardware projects.
  • Leverage interoperable digital identification for bilateral cooperation, drawing insights from India’s Aadhaar system.
  • Enhance cooperation in critical areas such as quantum research, drone systems, space exploration, aerospace materials, the semiconductor industry and critical minerals.
  • Use the FTA, the investment agreement and the GI agreement to move beyond classical 20th-century concepts of trade exchange and turn them into the hardwire of the economic relationship.

And finally, a step back to look at the broader geopolitical backdrop to this bilateral relationship. We have both seen that the wars in Ukraine and the Middle East and the global challenges posed by the COVID-19 pandemic have underscored the risks and limitations of our dependencies. These events have tested our ability to pursue our interests in an interconnected world. We must now unite against regimes that threaten our peaceful cooperation and our strategic supply in order to develop strategies to safeguard our economies. Europe must be cautious here and must not preach. It has no legitimacy to do so! It is crucial for the EU to be sensitive to India’s complex history with the West. The problems of history are thankfully largely behind us. Through the forging of new agreements, India and the EU have come to a common understanding about the nature of our world. Together, we have the opportunity to shape a new world—one that is more cooperative, prosperous and stable, and founded on our shared commitment to democracy and a thriving civil society. The decisions we make today will set the course for our future.

We are presented with an unprecedented opportunity to build a strong partnership, and I genuinely believe in its potential. As a European citizen, I celebrate the India-Europe partnership on the global stage. The EU’s collaboration with India is a significant milestone in our journey towards digital and infrastructure connectivity—a journey that billions around the world aspire to undertake.

Digital and infrastructure connectivity is not just about economic growth and poverty reduction; it is above all about people and their empowerment. The impact of digitalisation in towns and rural communities is tangible. It empowers millions of citizens to change their lives for the better, offering them more choices and better opportunities. The EU-India partnership is worth celebrating not only for its role in connecting Europe to Asia but also for its contribution to building a more stable, prosperous and democratic world. Together, we can make a difference, and our partnership stands as a testament to our commitment to a brighter, more interconnected future.


The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.

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