India and the EU: A directionless courtship

Prime Minister Manmohan Singh was in Marseilles last week for the ninth European Union-India Summit hosted by French President Nicholas Sarkozy. A lot of rhetoric flew around. India and the EU re-affirmed their strategic partnership and talked about their shared values of democracy, human rights, pluralism, rule of law and multilateralism.

This is becoming routine in India-EU interactions. But there's a larger issue that both India and the EU need to confront on an urgent basis: Where are the EU-India ties headed? Though India was amongst the first countries to establish diplomatic relations with the European Economic Community, it was only in 2004 that the EU formalised its ties with India into a "strategic partnership."

This was seen as very significant as the EU has strategic partnerships with only five other countries -- the US, Canada, Russia, Japan, and China. Bilateral ties have grown considerably since 2004 and the aim is to have a much stronger and intensive relationship over the entire gamut of exchanges from political to multilateral, economic to science and technology, academic, cultural and civil society.

As the largest open societies in the world, the EU and India share a commitment to participatory democracy, human rights, good governance, and rule of law. The EU's gradual gravitation towards India is also the result of a growing unease with China's economic dominance. Not only is India seen as a better enforcer of Intellectual Property Rights laws but diversification also seems to be a better strategy for Europe. While China is not seen as being fully integrated into the international system, India being a liberal democracy is considered as almost a fellow traveller.

India has been a major beneficiary of the EU's Generalised System of Preferences scheme that provides duty reduction, and duty free and quota free access to products from developing and least developing countries. The EU is India's largest trading partner and one of the largest sources of foreign direct investment for India. It is hoped that in the coming years India and the EU will explore the possibility of implementing a coordinated call for climate change research so that exports on both sides can work on collaborative research projects.

Despite the well-intentioned attempts by the EU to engage India more productively in recent years, there are significant constraints that continue to limit these ties from reaching their full potential. It took the EU very long to recognise that India also matters over the long-term and should be taken seriously. For long, the EU had single-mindedly focused on China, ignoring the rise of India in Asia-Pacific. India's rising economic profile, the US overtures to India, its growing role on the global stage from the United Nations to the World Trade Organisation, all have forced the EU to make it one of its strategic partners. The EU-India relationship is getting a long-term focus with the recognition that there are enough mutual benefits to ensure that small areas of friction are smoothed over.

The EU has been lukewarm at best to support India's bid for a permanent membership in the United Nations Security Council. This is partly because different member states have different views on this issue and partly because the EU is still testing the waters to see which way the wind will blow ultimately. This is despite the fact that the EU has been supportive of the UN attempts to reform its functioning and organisational structure to meet the changing global realities.

The EU and India also find themselves on the opposite sides in trade negotiations in the WTO and there are strong differences over the EU's farm subsidy policy and on issues related to market access. The EU's reluctance to reduce the massive agricultural subsidies to its farmers that distort fair competition in trade in agriculture continues to be a major bone of contention between the EU and India. India is a member of G-20 and G-33, groupings of developing countries resisting the agenda of the developed world in the WTO.

Though the EU is India's largest trading partner accounting for around 19 percent of trade and FDI from the EU into India has also grown considerably in recent years. Yet, the EU's economic ties with India are yet to achieve their full potential with total FDI into India still amounting to only 1 percent of EU outflows and being less than a tenth of that into China

Finally, and perhaps most important, there is the issue of the EU mindset which still views India as a regional South Asian power and continues to equate India with Pakistan. The tendency to equate India and Pakistan, which until recently affected Washington and marred all policy initiatives in the past, seems to be alive and kicking in Europe. Despite some belated efforts, the EU continues to see security issues through the old lens, trying to find a fine balance between New Delhi and Islamabad.

India remains uncomfortable with the EU's position on the issue of Kashmir. Last year, however, a report titled "Kashmir: Present Situation and Future Prospects" was released and adopted by the European Parliament. It radically changes EU's position on Kashmir by calling Pakistan's bluff on Kashmir as it focuses on human rights abuse in Pakistan Occupied Kashmir and rejects the doctrine of the right to self-determination propagated by Pakistan for long. In many ways, it is a vindication of Indian position on this very contentious issue and should go a long way in re-moulding EU-India ties.

With the exception of France and Britain, other member-states of the EU have not been entirely supportive of the recently concluded US-India nuclear deal as was clear from the initial deadlock at the NSG. This granting of an extraordinary exception to India by the US has not gone down very well with the non-proliferation constituencies in various EU countries.

As the centre of gravity shifts to Asia-Pacific and the international system undergoes a profound re-ordering, the EU is trying hard to accommodate to these new global realities. The rise of China and India has presented the EU with several opportunities that it's trying its best to harness. But while trade and economics seems to have given the EU a reference point vis-à-vis the two Asian giants, politically it seems adrift as it is finding it difficult to speak with one voice on the political issues that confront the world today. Europe is finding it difficult to formulate a coherent foreign policy across the EU nations and this has made it difficult for the EU to respond as effectively to the rise of China and India as it would like to. The US has taken the lead in defining its relations with China and India and the EU now seems to be reluctantly following its lead as opposed to acting as an autonomous political unit keeping in mind its own strategic priorities.

The EU's lack of a strategic direction in foreign policy makes it difficult for it to respond effectively to new challenges such as the rise of India. India should leverage its growing economic and political profile in the international system to impress upon the EU that it's time for the EU to act seriously on its promise to make India a strategic partner.