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EU-India Relations

Submitted by on 28 Mar 2013 – 15:36

By Sir Graham Watson MEP, Chair, European Parliament Delegation for Relations with India

When I was in Chennai (formerly known as Madras) last April, leading a delegation of MEPs on an interparliamentary visit, I was struck by the long history of the trade contacts between Europe and India. These links stretch back to the flourishing trade with the Greeks and Romans two thousand years ago, well before the arrival – or should I say return – of Europeans in the 16th century. And – although there are many other areas in which we interact – trade remains a fundamental element in the relationship between the European Union and India. Indeed, the EU is India’s largest trading partner and has in recent years been both the biggest external investor in India and the most important destination of outward investment from India.

Talks on the EU-India Free Trade Agreement – or the Broad-based Trade and Investment Agreement (BTIA) as the Indians call it – have been underway for six years. Both sides are hoping that 2013 will be the year when a deal is finally reached. It is easy to be a bit sceptical. Since I became Chair of the India delegation in 2009 I have been regularly hearing that the next months, or the next year, will be crucial. However there is now a particular urgency to reach agreement before India goes into election mode later this year. Elections must take place by June 2014 at the latest, as must the European Parliament elections, and it is hard to predict what will happen afterwards.

So there is a push to strike a deal earlier rather than later. Certainly the European Commission appears to be optimistic. According to a press release in January “there is a renewed momentum recently with the contours of a deal emerging. Now both sides need to go the final mile to put the package together“.  At the time of writing, the EU-India summit is likely to take place before the end of June and it is hoped that this will be the opportunity to reach political agreement on the deal.

There are still a number of critical areas to be resolved, most notably tariffs (particularly those on cars); services; procurement; and the thorny issue of a clause on sustainable development, which is a particular demand of the European Parliament. The EP believes that a balanced FTA will create a win-win situation, particularly as the Indian and EU economies are complementary in so many ways.  MEPs in the Trade Committee closely monitor developments and the FTA has also been one of the main agenda items for the delegation for relations with India, both when we have gone to India and also in our meetings in Brussels. And, on all occasions, we have stressed that the final deal must be acceptable to the European Parliament, as our assent is required for it to pass.

However the EU-India relationship extends well beyond trade and investment. Since 2004 there has been a Strategic Partnership between the two sides and, since 2005, a Joint Action Plan. High Representative Ashton said recently that, since then, “our co-operation has gone from strength to strength” This progress is to be applauded. However, I believe that much more can and should be done. And one theme that I regularly underline to our Indian partners, who have a historic tendency to put greater emphasis on their bilateral relations with member states, is that the European Union is not simply an economic power but has significantly increased its political role, not least in external relations following the entry into force of the Lisbon Treaty. And that the European Parliament plays a fundamental role in this process.

On regular visits to India and meetings with representatives of the Indian government and civil society, we come back again and again to the multitude of areas in which we can co-operate. In the political field, as Carl Bildt has said, the majority of the world’s problems can be found in the broad region between “the Nile and the Indus”, which is the neighbourhood of the EU and India. India is a major geo-strategic player in Asia, not least in Afghanistan where its constructive role and massive investment in its near neighbour has been crucial and will probably be even more so after 2014 when most of the international forces leave. India and the EU have a common interest in making every effort to prevent the country from dissolving into chaos and anarchy. In a neighbouring arena, EU-Indian co-operation in the Indian Ocean to combat piracy has shown the great benefits that can be achieved by the two sides working together.

There are many other areas of collaboration where we have the potential to do so much more, such as further co-operation in the field of science and technology; promoting more people to people contacts, and (a particular hobby horse of mine) working together to tackle climate change and to promote the development of renewable energies such as solar power, wind power and biofuels.

This multifaceted and expanding relationship is all the stronger because it is based both on common interests and also on shared democratic values. The European Union and India are the two most populous democracies in the world. They are economic and political unions made up of states that are linguistically, ethnically and culturally diverse. A successful conclusion of the FTA negotiations in the first half of this year will give a great boost to this many-sided relationship and go a long way to allowing it to fulfil its huge untapped potential.