Thursday, July 9, 2009



EU has always been an economic power house. The members of EU are important for India both individually as well as collectively. India’s relations with EU have grown exponentially covering all areas of interaction. The EU is India’s largest trade partner and bilateral trade crossed Rs 2, 70,000 crore in 2006. India and EU are also important investment partners with significant two-way flows. 24% of FDI inflow comes from EU. Indian investment has also been growing steadily in UK, Germany and Italy.

The first India-EU Summit in Lisbon in June 2000 marked a watershed in the evolution of this relationship. Since then the summits are being held annually. The relationship has matured into a strategic partnership and a joint action plan has been drawn up. The 9th EU summit was held in Marseille on September 29,2008.

There is sometimes a tendency on the part of the EU to inject non-economic issues into the economic dialogue, which perhaps is driven by certain sections of the Brussels bureaucracy. At other times, this may be a reflection of concern over issues within India, such as the religious freedom issue on which the European Parliament explicitly expressed its concern in a text on the Indo-EU summit, adopted on September 24. India on its side has concerns over xenophobia and discrimination meted out to Indian origin citizens of the EU. Several EU countries have been tardy in implementing by January 2006 the EC Directive of 2003 which requires member states to grant permanent residency to third country nationals who have resided legally in a EU country for over five years.

Another irritant is the lack of an appropriate visa regime for Indian professionals employed by Indian companies delivering technical and professional services to clients in the EU. Both sides need to deal with such issues in a mature fashion, through constructive dialogue

Both sides need to put in place a specific joint mechanism for implementing the decisions of the India-EU summits within an agreed time-frame. There is a clear disparity in the levels of engagement of various EU members with non-member countries such as India. For example, the UK has had the deepest level of engagement with India, with the other big players such as France, Germany and Italy catching up.

The other EU members have relatively lower levels of engagement with India. Therefore India-EU relations will be important for some of the EU members, while others will be content to assume a more passive role.

The increasing lethargy of the EU’s decision-making process as it expands and gets more muscle-bound has important implications. Progress on major new initiatives, internal to the EU as well as external, such as the India-EU free trade agreement, can get blocked by positions taken by a few small countries, which might be more concerned with protecting their narrow and short-term interests.

Most EU governments are overloaded with the growing complexities of an expanding and deepening EU, the numerous working groups and meetings in Brussels, the proliferation of complex EU directives and compliance processes. This puts a big strain on the smaller countries that have little capacity left to give enough attention to non-EU countries, except in crisis situations. At the same time public euro-scepticism is growing, and the Brussels-based EU bureaucracy is seen as remote and aloof from national problems.

Strengthening engagement with the smaller EU countries will, therefore, require India to take greater initiative, and this will necessitate greater investment in terms of diplomatic and political effort directed towards these countries.

  • Highlights of EU-India summit 08
    1. a revised Joint Action Plan extending the strategic partnership of 2005 to new areas
    1. a joint work programme on energy,clean development and climate change
    2. Launch of a European Bussiness and Technology Centre in India
EU-India summit 2009 to be held in Delhi


  1. very informative...although i missed wht can be the implications of introduction of blue card by eu on ind-eu looking forward for a post cum discussion on ongoing g-5 n g-8 summit.


  2. Educative... thanks:)

  3. @Anviti... I'll publish a separate article on Blue Card.