The 15th EU-India Summit was held in the virtual space, which can be called the Covid-19 era normal. Before the pandemic made its presence felt, this Summit was planned to be held in March in Brussels. Accordingly, preparations were starting for the Summit and a few programs on the sidelines of the event were on anvil. Abruptly COVID brought an end to all the plans.
The last 2 Summits were held in Delhi in 2017, and in Brussels in 2016 which paved the way for strengthening the trade between EU and India. European Union is only second to the USA as India’s trading partner. Hence the importance of this relationship.
The birth of European Union dates back to 1952 when six countries – Germany, France, Italy, Belgium, Netherlands and Luxembourg – got together to form European Coal and Steel Community to protect their steel and coal industry. In 1957 this was transformed to become European Economic Community (EEC). It is only in 1973 that the UK, Ireland and Denmark joined taking the total to 9. The EEC was also known as the European Common Market (ECM).
Since the 1993 Maastricht treaty, the Community became a Union. One can say it was an economic growth model, without a fiscal and political union. Introduction of borderless trade followed by borderless travel within the Union, except a few countries went a long way in giving a boost to economic activities within the union and outside.
There are many complexities in the EU, few countries are in the visa treaty (Schengen) but not in the currency union and some part of a sub-regional group with free movements with countries not in the EU. The introduction of Euro €in 19 of the 27 countries on the midnight of 1st January 2002 and withdrawing the existing one was a unique feat. The ‘demand’ for EU membership was so high that in a few years the Union expanded to 28 countries that got reduced to 27 post Brexit.
Brexit has come as a dual opportunity for India. While Britain loses the Single Market, the EU’s GDP will be taking a 17% hit. Both these occurrences offer an opportunity for India.
This summit was very timely especially in the midst of the pandemic keeping in mind our quest to Atmanirbhar Bharat based on the call given by Prime Minister Narendra Modi. While the pandemic has challenged the entire humanity both physically and economically, it has thrown up new opportunities and also the need for countries to come together.
There are short term challenges of rekindling the economies and putting it back on track, in the long term challenges like climate change and increasing the use of renewable energy. To finally emerge out of the pandemic, access to COVID tools, including the advent of a vaccine and the close cooperation between the pharmaceuticals companies on both sides will be crucial.
Emerging from the Summit a very positive Joint Statement and a five-year Roadmap 2025 augers very well. The emphasis on a high-level trade and investment dialogue and the formation of a digital investment forum will further strengthen the relatively balanced trade, with India enjoying a surplus. EU accounts for 14.4% of India’s exports (€41.4 billion). A leading investor in India, about €10 billion, 22% of the total FDI inflows in 2019-20. On the other hand, EU the third-largest recipient of Indian FDI, €2.5 billion, 14% of outflows. Close to 4,500 EU companies in India employ 60 lacs people (directly and indirectly).
Another important outcome of this Summit was a comprehensive Road Map for 2025 covering multiple subjects Security, Foreign Policy, Human Rights, Trade and Investment, Business & Economy, Climate change and Clean Energy, Environment Urban Development, Information and Communication Technology, Transport, Outer Space, Health and Food Security, Research and Innovation, Artificial Intelligence, Effective Multilateralism, Connectivity, Indian Ocean and the Pacific, Global Economic Governance, Ocean Governance, Development Partnership, Migration and Mobility, Employment and Social Policy, Education and Culture, Parliaments, Civil Society and Local/Decentralised Authorities, Institutional architecture of the EU-India Strategic Partnership.
For Trade and investment, Business & Economy – as part of the Road Map for 2025 a detailed plan was laid which will go a long way to enhance the much-needed market access, particularly for small and medium-sized enterprises (SMEs). Also addressing issues of existing trade barriers and preventing the emergence of new ones, seeking alignment to international standards and best practices, easing up the assessment of conformity and improving investment conditions.
This road map envisages strengthening the regulatory dialogue on pharmaceuticals, medical devices and biotechnology. This will be fostering alignment with international standards and practices; ensuring the quality of pharmaceutical and the much-needed market access.
Engaging in the bilateral Intellectual Property Rights (IPR) dialogue, working out ambitious and mutually beneficial trade and investment agreements and the optimal use of the Investment Facilitation Mechanism (IFM) established in 2017 will greatly facilitate EU investment flowing into India.
The success of a summit is assessed by the emerging joint statement and its comprehensiveness. In exceptional cases, when ‘issues’ do not get resolved such a joint statement is missing. This happened in a very recent EU summit (June, 22) with a major country. In this instance, the emerging statement read – ‘Defending EU interests and values in a complex vital partnership’.
EU and India is a natural partnership between 27 democratic countries with the world’s largest democracy. India is a country which houses in its bosom multiple religion, languages, cultures, so does the EU in its group of 27. EU and India are very important not only to each other’s’ economic prosperity but the world at large. It is therefore important to see this EU-India Partnership with a lens of economic revivalism of India post-COVID which promises flow of investment and a boost in the manufacturing sector in India.