The India-European Union (EU) 27 Leaders’ Summit was held virtually on 8 May 2021. The summit sent out a clear political message of the importance India and EU attach to their partnership. This was so because the format of meeting - encompassing the national heads of EU27 member states along with Presidents of Council, Commission and the High Representative – has only been convened for the US President Joe Biden in March 2021. Also from a policy point of view, the Summit showcased the increasing focus of the EU on its ties with India – this is in line with EU’s 2016 Global Strategy which highlights EU’s shifting focus to Asia with special emphasis on its partnership with India; 2018 EU’s Strategy on India which recognised India as a natural partner; and the adoption of India-EU Strategic Partnership: A Roadmap for 2025 during the 2020 India-EU Summit. Similarly, India’s consistent outreach towards the EU and its member states has been visible since 2016. India has recognised the EU as a reliable partner in various strategic areas like climate change, connectivity, and military to military dialogue. The India-EU 27 Leaders’ Summit resulted in a joint statement and adoption of the India-EU Connectivity Partnership. The Paper analyses the key outcomes of the summit, and looks at important issues highlighted in the discussions.
Key Outcomes of the Summit
Following are the key outcomes of the India-EU Leaders’ Summit of 8 May 2021:
Trade and Investment
Trade has often been called the cornerstone of the India-EU relations. The EU is India’s biggest trading partner and the second largest destination for Indian exports, with over €78 billion trade in goods in 2019. It is also the leading foreign investor in India with the direct investment in India reaching €75 billion in 2019. Also, the European Investment Bank (EIB) has invested over €3.03 billion in infrastructure, energy and climate projects. Over 6,000 European companies are present in India, generating 1.7 million direct and 5 million indirect jobs[i].
The most important outcome of the summit was the declaration of resumption of the long-stalled negotiations of the free trade agreement (FTA) between India and the EU. The negotiations had collapsed in 2013 after 16 rounds of talks due to disagreement over various issues. The resumption of talks follows the decision taken during the 15th India-EU Summit in 2020 to establish the High Level Trade Dialogue so as to provide “guidance to bilateral trade and investment relations.” The first High Level Trade Dialogue was held on 5 February 2021 where both sides had reiterated their commitment in resuming the negotiations[ii]. The High Level Dialogue is to monitor the progress on market access issues and supervise the negotiations. Apart from the resumption of FTA talks, India and the EU also decided to launch negotiations for a stand-alone investment protection agreement and an agreement on geographical indications, which concluded separately or integrated into the trade agreement, depending on the pace of negotiations. A joint working group on “resilient supply chains, building inter alia on the experience we have gained from the Covid-19 pandemic”[iii] and to intensify regulatory cooperation on goods and services were also created.
EU-India Connectivity Partnership
One of the key outcomes of the meeting was the EU-India Connectivity Partnership. The document stressed the promotion of “transparent, viable, inclusive, sustainable, comprehensive, and rules-based approach to connectivity.”[iv] The outcome flows from India-EU emphasis on the promotion of sustainable connectivity and transparency in the investments which were also highlighted in the Roadmap 2025. Connectivity was also identified as an area of high potential for cooperation between the two partners in the EU’s 2018 strategy on India and the EU’s strategy document titled “Connecting Europe and Asia: Building Blocks for an EU Strategy” released in 2018. In the document on EU-India Connectivity Partnership, released after Leaders’ Summit, three features stand out –
First is emphasis on public-private partnership and investment, and incentivisation of private investment. This is to be done through “leveraging public funds together with global capital flows (including sovereign wealth funds and pension funds) to spur private investments in sustainable projects, through tools such as direct investments, Infrastructure Investment Trusts, green bonds Infrastructure Debt Funds, Real Estate Investment Trusts, and Export Credits.”[v] Second, the document identifies four thematic areas of comprehensive connectivity – first, Digital - increased access to digital services with high protection of consumer and personal data; second, Transport - promote better planning of regulatory frameworks, interconnection of transport corridors and security of transport, smart and sustainable mobility and identifying joint investments in port-sector; third, Energy - more interconnected regional platforms, market-driven transformation towards reliable and sustainable energy solutions, modern systems and environmentally friendly solutions; and fourth, People to People – enhanced cooperation in education, research, innovation, culture and tourism. To support connecting the European and Indian innovation ecosystem, by targeting SMEs and start-ups, to co-create and co-develop for innovative and technology-driven solutions to connectivity challenges.
Third is sustainable connectivity in third country and region – to promote transparent, inclusive, and rules-based connectivity between EU and India and with third countries and region. The document identifies three key regions for cooperation – Africa, Central Asia and the Indo-Pacific. The document supported the regional connectivity efforts, in particular, working together to support the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). It sought the alignment of the financing by the EIB and EU Member States’ financial institutions to support the objectives of the Connectivity Partnership, including considering their potential support for technical assistance for project preparation.
Towards Green Growth
Climate change has emerged to be a key pillar in the India-EU partnership. The establishment of the Clean Energy and Climate Change Partnership during the 2017 India-EU Summit identified “climate action and clean energy transition as an imperative for the future development of our societies”.[vi] The joint statement stressed the importance of achieving the goals of the Paris Agreement as well as “strengthening climate change mitigation as well as adaptation and resilience to the impacts of climate change, providing means of implementation including finance.”[vii] Both sides also committed to contributing to the success of the upcoming Biodiversity COP15, Climate COP26 and the second UN Ocean Conference. The emphasis was also placed on the new work programme for the EU-India Clean Energy and Climate Partnership. The goal is to deepen cooperation to speed up the deployment of renewable energy, promote energy efficiency, collaborate on smart grid and storage technology, and modernise the electricity market.
Another key highlight was the increased activity of the EIB in India through loans and equity investments. Prior to the Summit, the EIB and State Bank of India and Ministry of Finance signed €300 million investment in urban metro systems in the cities of Kanpur and Pune[viii] and a €100 million investment in NEEV II[ix], an equity fund set up to support small and medium businesses in India with innovative solutions for climate action. While emphasising on the need to support sustainable modernisation of the economies, both sides also committed to accelerate the implementation of the new Circular Economy and Resource Efficiency Partnership to intensify bilateral exchanges on relevant regulatory approaches, market-based instruments and business models. The EU also confirmed its membership of the Coalition for Disaster Resilient Infrastructure and its support for the International Solar Alliance. It invited India to endorse Leaders’ Pledge for Nature[x].
Global Health Preparedness
India and the EU are reeling under the pressure of COVID-19 where their respective economies have taken a massive hit and their health-care systems are under severe stress. The underlining of their commitment to work together for “universal, safe, equitable and affordable access to vaccines, diagnostics and treatments” was one of the key outcomes of the meeting. As the Summit was held in the backdrop of the unprecedented COVID-19 crisis unfolding in India, prior to the meeting, through the EU Civil Protection Mechanism, the EU member states had mobilised more than €100 million worth of emergency equipment – oxygen, ventilators and medication – for India's COVID-19 response. In the joint statement, both partners agreed to cooperate on the resilient medical supply chains, vaccines and active pharmaceutical ingredients. The EU also invited India to work towards International Treaty on Pandemics within the framework of the WHO.
Apart from the above outcomes, the emphasis was also laid on the strengthening of the India-EU partnership in global governance. The emphasis was laid on three inclusive areas – first was enhancing joint coordination in international security to include countering terrorism, radicalisation, maritime security, cyber threats, nuclear proliferation and disarmament. Second was to push forward comprehensive reforms of the UNSC to make it more transparent and effective; closer coordination on regional issues like preservation of JCPOA, and stability in Afghanistan. Third was commitment towards free, open, inclusive and rules-based Indo-Pacific space. The emphasis on Indo-Pacific, seen in conjunction with recently released EU’s conclusions on Indo-Pacific, places importance on territorial integrity, transparency and freedom of navigation and over-flight. It also places ASEAN at the centre of the Indo-Pacific, a position that corresponds to India’s own Indo-Pacific outlook.
The summit has been hailed as a historic and watershed moment in the India-EU relations, with Prime Minister Modi and President Antonio Costa calling it as “moment of profound geopolitical significance”[xi]. Between the period from the 15th Summit Meeting in July 2020 and Leader’s Summit in May 2021 - both the partners have established a Roadmap for Cooperation 2025, launched a new dialogue on maritime security, re-started Human Rights Dialogue, agreed to set up a joint Artificial Intelligence Task Force, initiated the High Level Dialogue on Trade and Investment, and Indian Foreign Minister Dr. Jaishankar and EU High Representative Josep Borrell, for the first time, issued a joint statement on Afghanistan highlighting that India and the EU can formulate their foreign policy outlook on issues of common concern. Therefore, the India-EU 27 Summit came at a time when the momentum of partnership is on an upward trajectory and the meeting was expected to be a breakthrough of sorts.
India-EU ties in the past few years have become strategic with discussions taking place on issues beyond economics. India-EU have had more than 30 dialogue mechanisms on issues ranging from counter-terrorism, cyber-security, science and technology, climate change and environment, foreign policy, among others. There is an increasing push in Brussels to emerge as a geopolitical actor and India is a natural partner in many respects. At the same time, India is also emerging as a credible player beyond South Asia and the Indian Ocean, which has led the EU to look beyond its own periphery. The Summit has provided a renewed push to the partnership and has highlighted various areas and priorities that need to be focused on. The decision to resume the FTA negotiations comes in the backdrop of suspension of ratification of the EU-China Comprehensive Agreement on Investment[xii] and India’s decision to not join the RCEP agreement. Although the resumption of the negotiations is a welcome step, it is easier said than done because apart from the traditional issues (market access, labour mobility, etc.), there are new challenges that have emerged in the past few years (such as data protection, privacy issues, carbon taxes etc.), which would require renewed efforts for negotiations from both sides. A strong political will is needed from both sides to facilitate progress of the negotiations and the conclusion of the FTA. However, with India’s role as a major regional and global player set to continue to expand in the coming years, a strengthened partnership and the conclusion of FTA would offer Europe new and diversified opportunities for cooperation.
Similarly, the adoption of connectivity partnership is significant as it is only the second time that the EU has signed a strategy like this. The first was signed with Japan in 2019. To have a substantial impact, India and the EU would have to compete with the scale of China’s Belt and Road Initiative (BRI). While both partners have invested substantially in connectivity initiatives in Asia, they remain far below the estimated €1.3 trillion that is required for infrastructure development across the Asia-Pacific region. Also, issues related to TRIPS waiver for production of vaccines put forward by India and South Africa at the WTO needs to be discussed urgently. During the summit, Prime Minister Modi had invited the EU leaders to support the TRIPS waiver to COVID-19 vaccines to remove the hurdles in ramping vaccine production[xiii]. Both sides committed themselves working together on global health resilience, and on the need to focus on resilient medical supply chains with the EU remaining non-committal on the vaccine waiver.
On the whole, the meeting highlighted that the India-EU relations have come a long way since 2000. The idea, now, should be to move beyond the joint statements towards that of joint action because it is the implementation of the decisions that will set the course of the India-EU partnership. This is so because, how India and the EU will cooperate and collaborate, bilaterally as well as multilaterally, will define their global aspirations and standing.
*Dr. Ankita Dutta, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.
[i] ‘EU-India Factsheet’, EU-India Strategic Partnership – Leaders’ Meeting, EEAS, 8 May 2021, https://eeas.europa.eu/headquarters/headquarters-homepage/98010/eu-india-leaders%E2%80%99-meeting-8-may-factsheet_en, Accessed on 12 May 2021
[ii] ‘EU and India launched the High-Level Dialogue on Trade and Investment’, European Commission, 6 February 2021, https://trade.ec.europa.eu/doclib/press/index.cfm?id=2242, Accessed on 12 May 2021
[iii] EU-India Leaders’ Meeting, Joint Statement, European Council, 8 May 2021, Brussels, https://www.consilium.europa.eu/en/press/press-releases/2021/05/08/joint-statement-eu-india-leaders-meeting-8-may-2021/, Accessed on 13 May 2021
[iv] India-EU Connectivity Partnership, Ministry of External Affairs, 8 May 2021, https://www.mea.gov.in/bilateral-documents.htm?dtl/33854/IndiaEU+Connectivity+Partnership, Accessed on 13 May 2021
[vi] EU-India Joint Statement on Clean Energy and Climate Change, 2017, European Council, https://www.consilium.europa.eu/media/23517/eu-india-joint-declaration-climate-and-energy.pdf, Accessed on 13 May 2021
[vii] Joint Statement, n.3
[viii] ‘EIB supports COVID recovery, climate action and urban transport upgrades with EUR 325m of new sustainable investment’, EIB, 7 May 2021, https://www.eib.org/en/press/all/2021-152-eib-supports-india-covid-recovery-climate-action-and-urban-transport-upgrades-with-eur-325m-of-new-sustainable-investment#:~:text=All%20releases-,India%3A%20EIB%20supports%20COVID%20recovery%2C%20climate%20action%20and%20urban%20transport,325m%20of%20new%20sustainable%20investment&text=Werner%20Hoyer%2C%20President%20of%20the,the%20escalating%20COVID%2D19%20crisis., Accessed on 14 May 2021
[ix]‘India: New €100 million EIB and State Bank of India private sector climate action initiative launched at EU-India Leaders Meeting’, EIB, 7 May 2021, https://www.eib.org/en/press/all/2021-154-new-eur100-million-eib-and-state-bank-of-india-private-sector-climate-action-initiative-launched-at-eu-india-leaders-meeting#, Accessed on 14 May 2021
[x] Leaders’ Pledge for Nature – The aim is to reverse biodiversity loss by 2030 for Sustainable Development and to undertake urgent actions over the next ten years as part of the UN Decade of Action to achieve Sustainable Development. For More Details - https://www.leaderspledgefornature.org/
[xi] Politico.eu, 7 May 2021, https://www.politico.eu/article/trade-eu-india-partnership-narendra-modi-antonio-costa/, Accessed on 15 May 2021
[xii] The Guardian, 4 May 2021, https://www.theguardian.com/world/2021/may/04/eu-suspends-ratification-of-china-investment-deal-after-sanctions, Accessed on 15 May 2021
[xiii]ANI News, 9 May 2021, https://www.aninews.in/news/world/asia/pm-modi-asks-eu-to-support-trips-waiver-eu-doesnt-see-it-as-magic-solution20210508235712/, Accessed on 15 May 2021