Saturday, October 4, 2008

Missed opportunities at the EU India Summit

September 29, the sunny environs of Marseille in Southern France were the perfect setting to provide a strong impetus to the lackluster Europe-India relations but half a day of talks were overshadowed by French focus on Franco-Indian bilateral Summit the next day. The latter did culminate in France with India signing a nuclear co-operation deal.

Rising from the ashes of two World Wars and expanding to include 27 Member States with more in the waiting, the EU today is a bastion of peace, harmony and prosperity. On the other hand, India, with 28 States and seven Union Territories, has emerged over last six decades in a buoyant mood thanks to its democratic principles, freedom of speech and its new found economic strengths.

Fresh from the historic nuclear deal with the US, India is in a bargaining mood while the EU is still far from making the necessary efforts needed to shift its continuing bridge building with China to India as an important global and regional democratic player.

Political ties can not go far without financial bonds and a look at the trade figures from recent past show that its time to inject much needed momentum into an uninspiring trade relationship. At the Marseille Summit, the EU and India were unable to conclude a trade accord by the end of this year, as once hoped, and remain at loggerheads on key issues in the Doha talks on liberalising world trade.

Indian Prime Minister Manmohan Singh told journalists, at the joint press conference with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso, "We have agreed to achieve an annual bilateral trade turnover of 100 billion Euro within the next five years and to work towards the conclusion of the India-EU Broad-Based Trade and Investment Agreement by end-2009."

The 27 nation bloc’s trade with India amounted to just less than 56 billion Euro last year. Earlier the trade statistics shifted a gear from a meagre less than five billion Euro in 1980 to a respectable more than 45 billion Euro in 2006. Although trade with the EU is 20 percent of India’s import-export business, making the EU India’s largest trading partner in 2006, India’s share is only 1.8 percent of total EU trade.

In the context of the ongoing negotiations in the EU-India Free Trade Agreement, there are some stumbling blocks that need to be addressed on both sides. According to reliable sources, the major hurdle is in the fields of agriculture which is a protected sector in the EU which earmarks 40 percent of its total budget to this sector where there are subsidies galore.


In May, Peter Power, spokesperson for EU Trade Commissioner Peter Mandelson had told journalists in Brussels, “I can confirm that we have received the document from India. I can confirm that it is certainly a useful and worthwhile opening bid for negotiations will have to go further and deeper,” lamenting that the time-frame for the talks to conclude is “not solely in our hands.” “We would like to see this particular negotiation making progress as rapidly as possible. I think the opening bid is not bad, but a lot of work remains to be done to have an agreement that would be worthy of support by both sides,” he noted. “I think at this stage it would be unwise of me to put a timetable, but certainly we should hope to see substantial movement in the next year to 18 months,” added Power.

India formally launched negotiations in June 2007 with the EU for a comprehensive FTA aimed at removing barriers across all sectors including investment and services.

The EU has, in recent times, accepted the fact that Indian import tariffs have been substantially reduced but it complains they are still high by international standards. The EU calls it a “complex and non-transparent” system as it points at additional duties, taxes, and charges that are levied on top of the basic customs duties.

Pointing to the “non-tariff” barriers, the EU lists quantitative restrictions, mandatory testing, import licensing, certification for a large number of products and a complicated procedural modus operandi as the major speed breakers for a smooth trade relationship. With Indians finding the EU institutions bewildering and complex, India has its own set of complaints, foremost being in recent times the frequent use of anti-dumping duties on its exports including footwear.


Climate Change is another major sticking factor in the relationship equation, as India negates EU calls for a stricter binding commitments to reduce greenhouse gas emission, while Delhi argues that as a developing country it can not be expected to slow down its pace of industrialisation.

The EU has allotted 470 million Euro between 2007-2013 to tackle cooperation in the energy sector and environmental concerns while making efforts to reach its Millennium Development Goals.

Indian Premier Singh, noting that the EU-India summit had produced agreement on co-operation in clean coal technologies and solar energy, told journalists: “I am extremely satisfied . . . The holding of annual summits reflects the great importance both sides place on this strategic ­relationship.”


The best bet of all was the EU-Indian nuclear initiative taking shape as the US House of Representatives and the US Senate cleared the way for India to buy nuclear power plants, technology and fuel in the US.

India, officially a nuclear weapons power since 1998, has been denied access to civilian nuclear technology for more than 30 years because of its test of a nuclear device in 1974 and its refusal to sign the 1968 Non-Proliferation Treaty.

Like the US administration, the EU views now India, as a friendly democracy sharing many common values and argues Delhi should not be ostracised but encouraged to develop civilian nuclear energy and to assume its responsibilities as one of the world’s nuclear powers. “France has confidence in India,” Sarkozy said.

France, current holder of the EU presidency, is the member state with the most extensive experience of civilian nuclear power. It is keen to exploit the commercial opportunities presented by India’s need for new sources of energy to fuel its rapid economic expansion.


The EU and India said they planned to boost their joint work in the international thermonuclear experimental reactor (ITER) project, a French-based scheme to test environment-friendly, electricity-producing fusion power plants. They also said they would sign a separate agreement between Delhi and Euratom, the EU’s atomic energy agency, on fusion energy research.

On the question of EU aspirations to issue work permits to skilled professionals, the Commission President Barroso told journalists that the EU is aware of the difficulties faced by skilled professionals from India and other non-EU countries to come to the continent and was working on the “Blue Card” initiative on the lines of the more famous “Green Card” system of the US.

With the EU-India Free Trade Agreement in the pipeline along with other fields of cooperation being explored, both India and the EU are ready for taking a qualitative leap forward in relations, but the political leaderships on both sides have to transform all the talk of shared values of democracy, diversity and multilateralism into concrete pragmatic actions, thus making an effective and cohesive EU-India Strategic Partnership out of the present patchwork of sectoral cooperation.

Last but not the least, there was a complete lack of information from the Indian mission in Brussels where the EU is seated. European journalists pointed to “no press release,” “no media briefing,” “no pertinent information on the Embassy website,” nor a “call back to provide information from the Indian Ambassador’s office in Brussels.”
(Published in

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