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India-EU relations

The 1994 cooperation agreement signed between EU and India took bilateral relations beyond merely trade and economic cooperation.

india Updated: Oct 09, 2006 14:22 IST

• EU-India relations go back to the early 1960s. India was among the first countries to establish diplomatic relations with the (then) EEC.

The 1994 cooperation agreement signed between EU and India took bilateral relations beyond merely trade and economic cooperation.

Together with the Joint Political Statement signed in 1993 it opened the way for annual ministerial meetings and a broad political dialogue. Since then, dialogues have been held at different levels and at regular intervals.

• The first India-EU Summit in Lisbon in June 2000 marked a watershed in the evolution of this relationship. A decision was taken to hold annual summits. Since then there have been four Summit-level interactions, the last being the Fifth Summit at The Hague on 8 November 2004.

India-EU relations have grown exponentially from what used to be a purely trade and economic driven relationship to one covering all areas of interaction. The 5th Summit at The Hague was a landmark Summit for it endorsed the EU's proposal to upgrade its relationship with India to a 'Strategic Partnership'.

• The EU, which has strategic partnerships with only five other countries (USA, Canada, Russia, Japan and China), now sees India as a "regional and global leader… engaging increasingly on equal terms with other world powers".

• The frequency and intensity of India's contacts with the EU have grown exponentially since 2000. In order to provide greater coherence and focus to all the various activities being undertaken as well as undertake new initiatives, the European Commission has prepared a comprehensive Communication outlining in detail its views on various areas in which a strategic partnership could be forged with India.

This document examines sector by sector how current activities can be streamlined and new actions launched.

When implemented, they will be the basis of a stronger and more intensive relationship over the entire gamut of exchanges from political to multilateral, economic to science & technology, academic, cultural and civil society.

• The EU (as a bloc of 25 nations) is India's largest export destination and has a share of over 24 per cent in her total exports.

In the year 2003, India was 19th largest exporter to EU and occupied a share of 1.35 per cent in the total EU imports. On the other hand, India was 16th largest importer of EU's products and had a share of 1.46 per cent in EU's global exports.

India's exports to EU in 2003 were Euros 13.30 bn and imports were worth Euros 14.20 billion. The EU is one of the largest sources of FDI for India. However, the current level of FDI from the EU is far below potential.

Taking the period from 1991 to 2003, the total FDI approvals for EU-15 have approximately been $15 billion. The actual cumulative inflows are however around 6.2 billion Euros (US$ 5.6 billion), as per Eurostat Data.

The most important countries in the EU for FDI are UK, Germany, and Netherlands followed by France, Italy and Belgium.

• The 5th India-EU Summit was held in The Hague on 8th November 2004, under the Dutch Presidency of the European Union.

PM led the Indian delegation, which comprised the External Affairs Minister Natwar Singh, Commerce and Industry Minister Kamal Nath and then National Security Advisor Late JN Dixit.

The EU side was headed by Dutch Prime Minister Jan-Peter Balkenende, in his capacity as President-in-Office of the European Council, and included Romano Prodi, then President of the European Commission, Javier Solana, the EU High Representative for Common Foreign and Security Policy, and Pascal Lamy, then European Commissioner for Trade.

• This Summit represented a landmark in India-EU relations, in view of the launching of the India-EU Strategic Partnership.

A comprehensive Communication was presented by the European Commission in June 2004. India had submitted a preliminary but detailed Response to the EC paper in August 2004, where it had welcomed the positive orientation of the EC paper and several of the proposals it contained, in addition to suggesting some new initiatives of our own.

In order to carry forward and intensify relations in various areas on the basis of these documents, the EU and India are currently engaged in preparing a Joint Action Plan.

This Joint Action Plan will be endorsed at the 6th India-EU Summit in New Delhi next year, in the form of a Joint Political Declaration.

• As in the past, a Joint Press Statement was adopted at the conclusion of the Summit, reflecting our shared perceptions on various issues of mutual concern.

The Joint Declaration on Cultural Cooperation, annexed to the Joint Press Statement, provides a broad framework for enhanced cooperation in culture, including exchanges of scholars and students as well as techniques and know-how in conservation and restoration of works of art and monuments.

• At the Summit, it was agreed to strengthen the dialogue on disarmament and non-proliferation, enhance consultations on UN reforms, intensify joint efforts to fight terrorism and to increase Parliamentary and civil society interaction between the two sides.

The EU side acknowledged India's role in addressing crisis situations in its neighbourhood and welcomed India's determination to take forward the composite dialogue with Pakistan.

It was also agreed to address issues that would help enhance trade and investment relations.

Two proposals of special interest were the decision to set up an Energy Panel to discuss cooperation in energy matters and an Environment Forum, which would include business and civil society representatives, to discuss environment issues and possibilities for cooperation.

It was also agreed to continue negotiations with the EU side to sign the Framework Agreement to formalise India's participation in the Galileo satellite navigation project.

India reiterated its desire to participate in the International Thermonuclear Experimental Reactor (ITER) Project for generating energy from nuclear fusion.

• PM also had an interactive session with the 'India-EU Business Round Table' – a select group of Indian and European CEOs. This was a new initiative, which indicated the mutual interest in enhancing trade and investment.