The EU works closely with India to promote peace, create jobs, boost economic growth and enhance sustainable development across the country.
In 2019, the European Union and India marked 57 years of diplomatic relations. EU-India relations now span many areas, including cooperation on regional, global and security issues, close trade and economic ties, sectoral dialogues on sustainable development and modernisation, research and innovation as well as people-to-people contacts.
As long-standing partners, India and the EU are committed to dynamic dialogue in all areas of mutual interest as major actors in their own regions and as global players on the world stage. The world's two largest democracies share key values and principles such as democracy, freedom, the rule of law, human rights, and the promotion of peace and stability.
The 2017 EU-India Summit was a milestone and gave momentum to the strategic partnership. It reiterated cooperation on political, security, human rights, global and sectoral issues, including ICT, research and innovation, clean energy and climate change, and sustainable urbanisation.
The years 2018-19 witnessed further progress in the partnership with the EU presenting a new vision in 2018 to strengthen the cooperation with India, 'EU Strategy for Relations with India', placing emphasis on foreign policy and developing defense cooperation, promoting effective multilateralism and building on common values and objectives.
Political relations are also strengthened by the regular exchange visits between EU and Indian parliamentarians. Visits and people-to-people contacts, including expert meetings and think tank contacts, academic and student exchanges, cultural and other activities complement the multiple official interactions.
Origins of the Strategic Relation
The 1994 EU-India Cooperation Agreement provides the legal framework for EU-India relations and boosted political, economic, and sectoral cooperation. EU-India relations have evolved significantly since the commencement of annual summits in the year 2000. In 2004, the official declaration of the EU-India Strategic Partnership took the relationship a step further.
There have also been regular dialogues on regional and global issues of shared interests. The EU and India have regular foreign policy and security consultations and pursue cooperation on security issues such as counter-terrorism, cyber-security, counter-piracy/maritime security, non-proliferation, and disarmament. There are close contacts in multilateral forums and interactions during regional or international events and a shared commitment to enhance cooperation on common priorities further, including on human rights issues.
Trade & Economic Relations
India and the EU are two of the world's largest economies having shared synergies and offering significant trade and investment opportunities. The EU, with its 27 Member States, is India's largest trading partner in goods and services, with bilateral trade (goods & services) of over €100 billion.
In 2019, the total value of EU-India trade in goods stood at €79.59 billion. The EU is in fact the main export destination for Indian goods, absorbing 14.4% of the total exports (€41.4 billion). Trade in goods is also relatively balanced, with India enjoying a trade surplus.
Bilateral trade in services has also seen a steady increase reaching €30 billion in 2018. The EU exported services worth €14.2 billion, while it imported €15.4 billion in 2018. Thus, trade in services is also relatively balanced, with the EU having a deficit of €1.2 billion. Telecommunications, computer and information services, travel, transport and other business services account for ~86% of the EU's services exports to India.
The EU is also a leading investor in India accounting for 22% (about €10 billion) of the total FDI inflows in 2019-20. On the other hand, the EU was the third largest recipient of Indian FDI in 2019-20, with the EU accounting for 14%( €2.5 billion). Close to 4,500 EU companies in India employ 6 million people (directly and indirectly).
India's rapid economic growth over the last decade has helped the country become the seventh largest by nominal GDP and fourth largest by purchasing power parity(PPP) globally. The country's 1.3 billion population, including a thriving middle class, make it an attractive destination for investments. On the other hand, the EU's 27 Member States form the world's single largest market comprising 450 million citizens.
Fostering an Important Economic Relationship
Both India and the EU have a common interest in preserving and strengthening the rules-based multilateral trading system by cooperating more closely in addressing the challenges facing the World Trade Organisation(WTO). To this end, both the major trading powers are committed to free and fair trade for achieving sustainable development.
Another key dimension of the EU-India partnership is to ensure a high-level of investment protection in order to remain attractive destinations for new investments.
The EU and India hold regular bilateral meetings, covering trade barriers as well as economic and regulatory matters. These include the EU-India Sub-Commission on Trade and its specialised Joint Working Groups, including SPS/TBT, Agriculture and Marine Products, ICT, Pharmaceuticals and Biotechnology, and Medical Devices.
The EU-India macroeconomic and financial regulation dialogues have confirmed the growing strategic importance and potential for closer bilateral cooperation and coordination between the EU and India within the existing multilateral frameworks, including the G-20. Cooperation has also been intensified on sustainable finance with India joining as a founding member of the International Platform on Sustainable Finance, an EU initiative launched in October, 2019.
Science, Technology & Digitisation
Research & Innovation
International cooperation on research and innovation (R&I) is very high on the European Union's agenda and is an integral part of the EU-India Strategic Partnership. Increased collaborative efforts on R&I can play an important role in addressing societal challenges such as climate change, public health, clean energy or connectivity and achieve the Sustainable Development Goals.
The main task of the R&I Section includes reaching out to the Indian scientific and innovation community in view of cooperation under the EU's framework programme for research and innovation ’Horizon 2020’ (2014-2020), to be succeeded by Horizon Europe (2021-2027) All cooperation with India is on a competitive basis, with calls of proposals published on the Horizon 2020 funding and Tender portal, the EU Website and through Euraxess India. Since 2018, the focus has been on the innovation dimension with the creation of a Network of European and Indian Incubators, allowing to stimulate co-creation and development. The section works in close cooperation with the Government of India, mainly the Department of Science and Technology (DST), the Department of Biotechnology (DBT), and the Ministry of Earth Sciences (MoES), to establish topics of cooperation of mutual interest and the co-funding modalities and with Invest India on innovative actions.
Furthermore, it is working in close cooperation with the Science and Innovation Counsellors of the EU Member States (27) and the countries associated with the EU research programme (currently 16 countries) which facilitates finding European for collaborative research with Indian universities, research institutes and Small and Medium Enterprises on hosting an Indian researcher pursuing a career in and across Europe.
India and the EU have engaged to strengthen links between their flagship initiatives such as Digital India https://www.digitalindia.gov.in/, European Digital Strategy (https://ec.europa.eu/digital-single-market/en/content/european-digital-strategy) and the Digital Single Market for Europe (https://ec.europa.eu/digital-single-market/en/policies/shaping-digital-single-market).
Regular dialogues take place within the Joint ICT Working Group, focusing on market access issues for companies on both sides, regulatory issues, ICT standardisation, and research and innovation(including startups). These meetings are complemented by ICT Business Dialogues. Furthermore, a Cyber Security Dialogue focuses on exchanging best practices on addressing cybercrime and strengthening cyber resilience.
The EU supports technical cooperation between the Indian and European telecom standardisation bodies (TSDSI and ETSI) on future global standards on 5G, Intelligent Transport Systems/ Internet of Things, future networks, and security issues.
New cooperation avenues are developing in the areas of Artificial Intelligence (AI), data protection and privacy, and cyber security to address the challenges in emerging technologies.
EU International Partnerships and Humanitarian Aid
In the last few years, EU-India relations have evolved. As India has graduated from bilateral development assistance, reflecting its fast-paced economic growth, it has become a strategic development partner engaged with the EU on a wide range of issues. The EU and India have over the years successfully joined forces to foster inclusive economic development, promote good governance, protect the environment including improving energy efficiency, support civil society, and promote access to quality education and health.
With the new EU-India Strategy (2018) coming into place, strong emphasis is made on the importance of common responses to global and regional challenges which can broaden the EU-India cooperation. The strategy has also confirmed the relevance of the initiatives and sectors in which the EU INTPA are undertaken, namely:
- Green Deal- new growth strategy towards fair and prosperous society with a modern resource efficient economy.
- Governance, Peace and Security towards sustainable development.
The EU's International Partnerships in India, currently focuses on supporting India's transition to an upper middle-income status by addressing some of its key development priorities, such as sustainable and inclusive growth, job creation, and building sustainable infrastructure and human capital.
The EU has been adapting its tools to fit such purposes. In particular, its blended finance facilities provide a support mechanism to deliver investments in India-blending grants with loans to de-risk and/or maximise investments and build capacities- leveraging public funds to meet critical development needs.
EU development assistance to India, which amounted to more than €940 million during the 2005-2017, was utilised to deliver sustainable growth and address global challenges. The current portfolio of development cooperation projects in India amounts to more than €100 million in commitments. Most of the work focuses on areas identified by the EU and India as strategic, such as the greening of the economy, renewable energy and energy security, sustainable urbanisation, and disaster resilience. The EU adopts a coordinated approach in all its external actions to further strengthen existing partnerships with India such as on clean energy and climate; water; smart and sustainable urbanisation, and environment. It also works closely with Civil Society Organisations within the framework of the jointly identified areas to address social issues including gender balance, socio-economic inclusion, transparency, accountability, and democratic values.
ECHO in India
Through its humanitarian aid department, present in India since 1995, the EU has responded to all major emergencies including Tsunami in the Indian Ocean in 2004, Kashmir earthquake in 2005, Bihar floods in 2007, cyclone Aila in 2009, Kerala floods in 2018, and floods in Assam and Bihar in 2019.
Since it first began operations, the EU has contributed more than €130 million to address the urgent humanitarian needs of people in India. Funds are allocated strictly on the basis of the humanitarian principles of independence, impartiality, humanity and neutrality to ensure access to those in need.
To minimise disaster risks, an important area of EU's humanitarian work in India is preparing communities. The EU implemented various disaster preparedness programs in 12 disaster-prone states between 2001-2013. Through initiatives such as early warning systems and adaptation of physical infrastructure, the programs have helped mitigate the impact of natural disasters, including floods, cyclones, earthquakes and other hazards among vulnerable communities. Its total contribution to this end exceeds €8 million.
Over the past decade, disaster preparedness has also been mainstreamed into EU-funded humanitarian response projects, ensuring shelters, improved sanitation, and water pumps built-in flood prone areas designed to withstand future inundations.
Partnership Instrument (PI) is the EU's instrument specifically designed to support the Union's working with strategic partners worldwide. It does so by offering policy support to respond to global challenges, projecting the international dimension of Europe 2020, enhancing discussions on market access and boosting trade, investment and business opportunities, and promoting public diplomacy and academic cooperation.
This instrument facilitates the EU's cooperation with strategic partners worldwide to jointly advance on mutual strategic interests and tackle global challenges. Additionally, it funds activities to forge ahead the EU agenda with partner countries, translating political commitments into concrete measures. PI enables the EU and its strategic partners to jointly shape the global change and to promote joint core values.
PI offers a different approach to the established models of development cooperation by promoting policy cooperation with strategic partners of the EU allowing the establishment of a wider political dialogue with such partners. It also supports the EU's relations with countries that are no longer eligible for bilateral development aid. PI supports project activities in India in the areas of clean energy and climate partnership, water partnership, resource efficiency, smart and sustainable urbanisation, aviation, digital cooperation, biodiversity, migration and mobility, competition cooperation, business support, public diplomacy, engagement with the civil society, think tank cooperation, business and human rights, women's economic empowerment, security, implementation of the Paris Agreement, and others.