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Published on Apr 18, 2020
India-EU summit 2020 – Defining the future of the strategic partnership

 The 15th annual India-EU Summit, scheduled for 13 March in Brussels, was postponed owing to the COVID-19 pandemic. Given the developments in the political space for both parties, the agenda of the summit must include certain topics that would shape the future of the India-EU dynamic.

In India, the abrogation of Article 370 and the subsequent imposition of a communications blackout in Jammu and Kashmir, the passage of the Citizenship Amendment Act (2019), and the institution of the National Register for Citizens (NRC) have garnered significant international attention. For the EU, the existing uncertainty in trade due to Brexit is now offset by a significant slowdown in manufacturing and a large health crisis due to the widespread cases of COVID-19 across Europe. Drawing on these developments, it is imperative that the next EU-India summit host discussions on the several issues that will define the future of the strategic partnership.

The EU on Article 370 and the CAA

New Delhi’s actions in the state of Jammu and Kashmir and the passing of the Citizenship Amendment Act (CAA), 2019, have received significant attention from the European Union, with a large number of MEPs speaking out against the Indian Government’s actions and alluding to possible human rights violations. This resulted in the visit of a 27-member delegation of European Parliament members – the visiting Europeans were clear that this visit was made personally and not in their capacity as members of the European Parliament – to the new Union Territory of Jammu and Kashmir in October 2019. The MEPs travelled the state to gain a personal view of the situation on the ground.

The visit was followed by the introduction of six resolutions in the European Parliament on Article 370, the Indian Government’s subsequent actions and the CAA. The introduction of the six resolutions – which collectively represented the views of 626 out of 750 Members of the European Parliament (MEPs) – was significant, as it was an action on what has been declared an internal matter several times by the Indian Government. The resolutions were tabled after a discussion – the very occurrence of which is testament to the distinctly atypical stance taken by the European Parliament on this matter.

The formalised and concerted nature of the EU MEPs’ response to New Delhi’s actions indicates the high degree of focus the European Parliamentarians have accorded to these decisions of the government of India. It also presented a divergence from the previous policy of non-interference in matters declared to be internal affairs. The European Parliament debates have also seen several parliamentarians calling for the India-EU Strategic Partnership to be conditional on a substantial change in human rights, which have been a contentious issue between the two partners. Further discussion on these matters is due to occur during the summit and its resolution is of paramount importance.

Investment Protection – A pressing need for further provisions

Besides the above cited political developments, the summit was also significant to both sides from the prospects of enhanced bilateral trade and removal of barriers. According to the European Parliament’s South Asia factsheet for November 2019, trade in goods between the EU and India was estimated at EUR 90 billion in 2018, with a surplus of around EUR 2 billion in India’s favour. The EU is also one of India’s most important sources of investment, with EUR 76.7 billion in outward stocks and EUR 11 billion in inward stocks in 2017. India also benefits from unilateral preferential tariffs under the EU Generalised Scheme of Preferences (GSP), which links unilateral trade preferences to respect for human and labour rights. Trade between the EU and India has only grown since and the introduction of the Investment Facilitation Mechanism (IFM) for EU Investments in India in 2017 has led to a further increase in investments.

The summit was also expected to address concerns for investment protection, which has emerged largely because of the stalled Free Trade Agreement – formally called the Bilateral Trade and Investment Agreement (BTIA) – between India and the European Union. The uncertainty around EU-India trade relations in the wake of Brexit, coupled with the changing role of multilateralism in trade relations, necessitates urgent and clear provisions for investment protection. European nations are looking to increase their cooperative efforts with Asian nations in general and have expressed a desire to partner with India in a series of initiatives, as evidenced by the release of the EU Global Strategy, the EU Strategy for India and several other related policy documents. It is thus likely that India-EU ties will deepen in the future, potentially manifesting in increased investments and collaboration.

The pressing need for investment protection has been further illustrated by the devastating effect of the coronavirus outbreak on European nations and its subsequent disruption of supply chains and manufacturing, which potentially endangers Indian investments in Europe and vice versa. Furthermore, the practical effect of the quarantine measures manifest in a slowdown for production and exports, as well as the temporary suspension of several projects. All of this will have a direct and significant effect on the various partnerships that have been in the works over the past year. The economic fallout of the pandemic will therefore strongly affect the various investments and cooperative efforts made by both countries – all of which is further evidence toward the need for clearly outlined investment protection measures. Therefore, talks for an independent treaty of investment protection in the absence of an FTA have gained traction, and are a necessary point that must be discussed. 

The agenda for the future – realising 2020, outlining 2025

The past year has seen a change in leadership on both sides. The appointment of former diplomat Dr Subrahmanyam Jaishankar as India’s Minister for External Affairs, the elections for a new European Parliament in 2019 and the appointment of a new European Commission led by Ursula von der Leyen can be expected to bring changes to the bilateral relationship.

Furthermore, the EU-India Agenda for Action 2020 that was proposed in 2016 must now be reviewed, and a new agenda must be outlined and endorsed for the next five years. This comes not long after the release of a Joint Communication to the European Parliament and the Council on “Elements for an EU Strategy for India”, where the European Union laid out its priorities for the bilateral relationship. The new Agenda for Action 2025 would therefore ideally identify joint priority areas of cooperation and collaboration for India and the EU.

A renewed focus on the European presence in the Indo-Pacific, expansion of European investments into defensive capacity building, collaboration on projects for lowering emissions and combating climate change – in line with the Green Deal and the EU’s 2018 Connectivity Strategy for Asia – are all areas where the strategic partnership can expand. The upcoming review of the India-EU strategic partnership would provide a tentative outline of the process with which both sides can transform common values to common interests. Given the political backdrop in which the summit was to be held, the clauses on human rights and rule of law may also be highlighted. Furthermore, upon the convention of the summit, cooperative efforts in the healthcare sector given the lack of global cooperation to contain the COVID-19 pandemic may also be found on the agenda.  However, all this is contingent upon the long-term effects of the pandemic on European solidarity and cooperation – something that has been lacking in the response to the COVID-19 thus far.

Europe’s stated desire to deepen the strategic partnership coupled with the importance attributed to India as a partner in the 2016 EU Global Strategy is now offset by the EU’s criticism on India’s human rights record and actions relating to Article 370 and the CAA. The result of this complicated equation will be determined by formal discussion. This upcoming EU-India summit is therefore crucial in determining the future contours of the strategic partnership.

The author is a Research Intern at ORF Mumbai
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