The TTC will enable India and the EU to add heft to their strategic partnership and showcase their strengths and policy outlooks on issues of mutual importance
India and the European Union held their first Trade and Technology Council (TTC) meeting on 16 May 2023. The decision to establish a trade and technology council was announced by Prime Minster Modi and European Commission President Ursula von der Leyen in April 2022. The TTC was launched in February 2023 to “tackle challenges at the nexus of trade, trusted technology, and security” and further strengthen India-EU strategic partnership. This TTC is the first of its kind for India and the second for the European Union (EU), as the EU’s first was launched with the United States (US) in 2021.
For the EU, its TTC with India is part of a series of digital partnerships that it has signed with Asian countries, including Japan (May 2022), Singapore (February 2023), and South Korea (November 2022), to address issues related to the digital divide and to strengthen “a fair, inclusive and equal digital environment for all”. These partnerships also form part of its idea of working with like-minded partners to promote a “positive and human-centric vision of the digital economy and society” as is envisioned in its 2030 Digital Compass.
India and the US also launched an initiative on Critical and Emerging Technology (iCET) in May 2022 to expand the strategic technology partnership and defence industrial cooperation between the two countries.India, for its part, has been actively participating in various platforms and initiatives, which are aimed at strategic recalibration of trade and technology. These include the Quad working group on emerging and critical technology, whose goal is to foster collaboration on setting standards and frameworks for emerging technology, including 5G/6G networks, AI, digitalisation, quantum computing, etc. Along with Japan and Australia, India launched the Supply Chain Resilience initiative in 2021 to share best practices and promote inclusive growth. India and the US also launched an initiative on Critical and Emerging Technology (iCET) in May 2022 to expand the strategic technology partnership and defence industrial cooperation between the two countries. Given these developments, the IndiaEU TTC is a welcome step in furthering their strategic conversations. The India–EU TTC comprises three working groups—the first on strategic technologies, digital governance, and digital connectivity, which will focus on areas such as quantum computing, AI, semi-conductors, etc.; the second on green and clean energy technologies with a focus on the circular economy, green transition, waste management, etc.; and the third on trade, investment, and resilient value chains, which focus on the resilience of supply chains, and the identification and resolution of trade barriers. The first meeting laid out a blueprint to operationalise these working groups. The following are the key outcomes of the meeting:
The TTC will work towards increasing interoperability between India and the EU’s DPIs and promote credible solutions for developing countries.Second, the TTC recognised the need for India and the EU to coordinate their policies for the semi-conductor sector. Therefore, in this regard, both partners aim to finalise a memorandum of understanding (MoU) on semiconductors by September 2023. India and the EU have been working towards diversifying their dependence on semiconductors from a single source. In this regard, the EU implemented its Chips Act in April 2023 to strengthen manufacturing and reduce critical dependencies. The Indian government has also stepped up its efforts by offering a production-linked incentive of US$10 billion for manufacturers to set up and invest in a manufacturing value chain for semiconductors. Multilaterally, India is working with its partners under the ambit of the Quad semiconductor supply chain initiative. The MoU can institutionalise and promote collaboration between India and the EU as they both work towards becoming semi-conductors manufacturing hubs. Third is recognising the importance of India’s Digital Public Infrastructure (DPI) initiative. India has emerged to be a global leader in the development of DPI, where it has developed an ecosystem for the implementation and adaptation of three critical aspects of DPI—digital identity (through Aadhaar), digital payments (through UPI), and data-sharing (through Data Empowerment Protection Architecture). These are also known as the “India Stack.” The EU has also worked on these areas under its Digital Decade policy programme 2030 and Global Gateway focusing on digital technology and infrastructure to promote inclusive growth and sustainable development. The TTC recognised DPIs as a way to accelerate the achievement of the sustainable development goals (SDGs). The TTC will work towards increasing interoperability between India and the EU’s DPIs and promote credible solutions for developing countries.
Under working group two on green and clean energy technologies, India and the EU reiterated their commitments to net-zero goals and identified three areas of cooperation—renewable and low-carbon hydrogen, batteries for electric vehicles, and standards.Within working group three, India-EU agreed to work towards discussions on “principles for cooperation” and identification of specific supply chains. Market access and exchange of information on mechanisms for screening foreign direct investments were also identified as key areas where there was a need to enhance mutual understanding. One key outcome for this working group was the decision to engage on the issues emerging from the EU’s implementation of the Carbon Border Adjustment Mechanism (CBAM), phase-1 of which will be implemented from October 2023. Under CBAM, the Union will impose a tariff of 35 percent on carbon-intensive imports, including cement, aluminium, and steel, which form an essential part of India’s trade basket with the EU. India had called CBAM a protectionist move rather than “a climate-change intervention”.
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Ankita Dutta was a Fellow with ORFs Strategic Studies Programme. Her research interests include European affairs and politics European Union and affairs Indian foreign policy ...
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