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Business in Helsinki

india Updated: Oct 16, 2006 00:05 IST

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The outcome of the India-European Union summit at Helsinki is proof, if it were needed, that India’s “independent foreign policy” is alive and well. Both sides have agreed to commence negotiations on a broad-based bilateral trade and investment agreement and work together on areas ranging from pharmaceuticals and biotechnology to energy and aviation. According to Prime Minister Manmohan Singh, the agreement could see a drastic cut in duties on Indian goods going to Europe and vice-versa.

Considering that the EU is our largest trading partner, this could be good news not just for exporters, but for the entire Indian economy. While trade with the EU tops 40 billion euros per annum, investment from the region has been much lower. According to Union Commerce Minister Kamal Nath, the new agreement being negotiated could help change things. The need for such an agreement has undoubtedly been accelerated by the failure of the Doha round of global trade negotiations, though both sides continue to stress the need to complete the multilateral process as well. The focus on trade and investment should not detract from the commitment both India and the EU have towards a multipolar world and an international system based on well-defined rules and effective institutions. The recent decision to include India in the Asia-Europe Meeting (Asem) process indicates the growing Indian footprint in Asia. The inter-regional body, comprising the EU and 13 Asian countries including members of the Asean, China and Japan, is an important forum for political dialogue and discussion on economic and security issues.

Contrary to what Left critics have charged, the UPA government has assiduously worked at firming ties with the EU as part of its belief that a country of India’s size and importance cannot but have an independent foreign policy. Dealing with the EU has not been easy, partly  because India has excellent relations with most of its constituent nations, and partly because of the entity’s own half-baked supra-nationalism. The peculiar arrangement of the six-monthly presidency, too, does not help, especially when it is held by countries that lack any understanding of the goings-on in ‘distant Asia’. India, too, must accept part of the blame for not making the effort to understand just how the whole differs from the part.

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