EU-India

The European Union and India will this year begin negotiating a free trade agreement. But 2007 could also be the year that relations between the two regional powers move onto a new level of political and economic co-operation.

In 1962 India became one of the first countries to establish diplomatic relations with the then European Economic Community. Since then relations have largely focused on trade and aid to India’s poor.

The EU-India relationship is still largely an economic one, but India’s rapidly growing economy and population have prompted the EU to re-examine its relations with India. The European Union is not alone in doing so.

Dozens of countries are now jostling to gain greater access to Indian’s 1.1 billion-strong market. Free trade agreements are currently in the pipeline with the EU, Canada, New Zealand, the US, the Association of South East Asian Nations, Sri Lanka, Japan, the Mercosur group of South American countries, South Korea and Kazakhstan.

But there are a growing number of voices calling on the EU to improve its political ties with India, as well as deepening its economic relations.

There are few international actors that do not have an interest in India and have not stepped up diplomatic contacts with the government in New Delhi in the last decade. India’s relations with China have dramatically improved since the days of border skirmishes, Japan is the largest aid donor to the country, Russia has close ties dating from the Cold War and the US is improving its relations, despite its parallel close relationship with Pakistan, India’s former foe and current rival.

In the second term of US President George W. Bush, relations with India have taken on a new vitality, which the EU has struggled to match.

Overcoming a major political obstacle, Bush agreed to restart civilian nuclear co-operation with India, which had been suspended after India tested a nuclear device in 1998.

Recognising the political importance of this move, the EU appears to be edging closer to a resumption of its own nuclear co-operation with India, despite concerns that Iran and other states engaged in the pursuit of the nuclear bomb may take such a move as encourage-ment that any inter-national sanctions against them will be short-lived.

The head of India unit in the European Commission, Jean- Christian Remond, in April set out the conditions for such co-operation. "We are prepared to explore with India the possibilities of co-operation in civil nuclear energy and it will be done with the concurrence of the International Energy Commission," he said.

On 25 April, A.P.J. Abdul Kalam used the first visit by an Indian president to the European Parliament to nudge Europe in that direction. Emphasising the need for India to increase its electricity-generating capacity to 400,000 megawatts by 2030, from the current 130,000 MW today, Kalam said: "Energy independence has got to be achieved through three different sources, namely renewable energy, electrical power from nuclear energy and biofuel for the transport sector."

He suggested the establishment of an "Indo-EU renewable energy development programme for taking up advanced R&D in all forms of renewable energy".

At a political level, the EU’s relations with India remain difficult. EU member states have vastly different views about whether India should become a permanent member of the Security Council.

This is the reason why the EU has been unable to back India’s Security Council bid as strongly as the US, Brazil or South Africa.

But in trying to develop ties with India, the EU will not only have to overcome its own divisions, it will also have to surmount India’s focus on domestic concerns. The country’s leaders appear focused on translating economic growth into improving the well-being of the whole Indian population.

According to C.P. Surendran, a senior editor at the the Times of India, the country currently has a myopic view of the world. "We do not even care about China," he said.

If the EU wants to boost its relations with India, it will have to make itself noticed.

The European Union and India will this year begin negotiating a free trade agreement. But 2007 could also be the year that relations between the two regional powers move onto a new level of political and economic co-operation.