HT interview: IMEC could be collateral of the conflict in Israel, says EU’s envoy to India

The India-Middle East-Europe Economic Corridor (IMEC) could be impacted by the conflict in Israel, EU’s new envoy to India, Herve Delphin, has said.

New Delhi The India-Middle East-Europe Economic Corridor (IMEC) could be impacted by the conflict in Israel though the stakeholders should continue their groundwork needed to make the project take off, the European Union (EU)’s new envoy to India, Herve Delphin, has said.

In an interview with HT, the European Union (EU)’s new envoy to India, Herve Delphin spoke of the EU’s plans to bolster relations with India in trade and investment. (HT)

In an interview to HT, Delphin also spoke of the EU’s plans to bolster relations with India in trade and investment, security and defence, and measures to tackle common global challenges such as climate change and green development.

What will be the EU’s focus areas in the next few years and which areas hold the most promise for the relations with India? I think there are three main areas that have great potential. The first is the cluster of economic and trade issues, and it’s pretty clear India is in demand because of its formidable growth. It has to attract investment and technology partners and for that, the EU is an interesting partner for India. The second is everything to do with security and defence. Till not too long ago, we weren’t on India’s radar screen for security, but I think Russia’s war of aggression in Ukraine has been revealer of what the EU stands for. Here we don’t propose the same thing as some EU member states, but we can provide leverage at the EU level through funding and coordinated actions like the maritime presence through Common Security and Defence Policy (CSDP) operations or missions like Atalanta. The very changing nature of security threats means that it’s not just the traditional hard power associated with defence that is of interest. In Brussels, we are one party and the other party is Nato, which is more into traditional defence while we have been covering hybrid issues such as cyber security, counterterrorism and maritime security. The third is the global challenge or the global commons, where India engages with the rest of the world in addressing global issues. That gives an opportunity for us to engage with India because we come from the same belief and commitment to act at the multilateral level to address global challenges such as climate change, migration and sustainable development.

India is a very interesting partner for the EU because of its own trajectory, its history of engagement at the global level. If you consider that India has three strategic objectives – economic development by 2047, security in its close and further neighbourhoods and being a leader, you will find that on all of these, the EU has something to offer, which makes the EU a partner of choice for India and you could also argue that for the EU, India is a partner of choice. The relationship has to grow more mature in the sense of what it represents strategically for each other. I came here with a strong mandate to bring to bear that strategic partnership.

The India-EU negotiations for concluding an FTA are expected to take some more time and both sides are set to go into elections. What can be done in the interim to bolster two-way trade and to make the negotiations move faster? It has been already fast, if you consider what is normally the time frame of negotiations. If you look at the ground covered in just one year – six rounds completed – that ‘s pretty fast by EU standards. It’s intensive, and there is pressure on both sides to advance. We also hope that negotiations taking place in parallel with others can be concluded because it will maybe allow the negotiators on the Indian side to fully invest in the negotiations [with the EU] because I understand there is a lot of work for the Indian negotiators and we respect that there’s so much on their plates. We are confident, we are patient, and it’s not the speed that matters, it is the quality of the negotiation.

In between, you need to continue to advance and adjust, that was the mandate given by both chief negotiators to their teams, to go back to the drawing board and our sense is that both sides have to sort of adjust so that there is a good basis for better understanding of the respective red lines. Like in any negotiation, there is a good compromise at the end of the day. Maybe, now we are going to the hard stuff and it’s probably difficult in itself. I think there is a lot of commitment but it’s complex and state-of-the-art.

Both sides are going to take stock after the sixth round [of talks] and then there is in parallel the Trade and Technology Council (TTC). There is an agreement in principle to have another TTC ministerial in the coming weeks. The TTC is an important tool, it’s not a substitute or precursor, but it can help us to come closer on many issues by building better understanding and identifying opportunities in innovation and technology. For us, the FTA is a significant agreement and so you’d better get it right.

[Whenever there have been] concerns, we’ve always engaged. There are concerns about the EU having a protectionist agenda, which is not the case. In the case of CBAM, there is a transition period of four years and it’s meant to ensure a level playing field. India is only 1.6% of EU’s global trade and in the last three years, that’s doubled. We hope that on the Indian side, they would see all the benefits they can gain because it will give them access to the biggest market. When you look at Indian FDI in Europe, you’re in the top 10. For our European businesses, as much as they see the opportunities, they want guarantees, stability, predictability, they don’t want to see...cumbersome procedures.

How would you assess the working of the Trade and Technology Council (TTC) and what comes next for this key body? It’s a unique undertaking that started in May. Both sides were quite satisfied with this. Both sides really like this forum to identify what can be done, to get a deeper understanding [of how things are] processed on both sides [so you] anticipate how can have mutual recognition or interoperability of standards.

It’s very interesting to look at [digital] solutions designed in India, such as identity and UPI. Solutions that probably we have would not have done, but because India has designed it according to its own ecosystem, we are looking at the opportunities it creates for Europe. There is AI and quantum computing [but] I think we have to be realistic. These are not the things where you have quick deliverables. But the fact that there are discussions taking place is helping. For example, how we manage data – India has its data protection bill the EU has our General Data Protection Regulation (GDPR). The TTC is helping to plug our respective economic ecosystems so that the wiring is already there.

Given the EU’s focus on the Indo-Pacific and the growing cooperation in maritime security, what do you see driving the interaction in this sphere? Will there be more coordinated maritime patrols? In the sense of the strategic reading of the dynamics, we are pretty much on a similar page. We’ve done our economic pivot to Asia a long time ago. Most of our trade is with this region. What we probably had not done is the strategic pivot. Economic cooperation has always been the glue keeping the region together and now we see geopolitics starting to undo things. In Europe, for security and defence, you’ve got Nato and it’s more simple. Here, it is an overlay of different considerations or regional organizations. The Indo-Pacific strategy brought us precisely the strategic framework, and the new kid on the block is security and defence.

We don’t like asymmetry, we want a level playing field. We want free and open access. Apart from strategically lowering the risk of escalation, we want to maintain the space for trade.

This is also a region which is the most disaster prone and impacted by climate change.

We have not deflected even one euro from this region because of the war in Ukraine. The second issue is the increased interconnectedness between strategic theatres. How the Russian and Chinese link it?

On the security and defence front, maritime security is the most advanced dialogue we have. It’s about joint situational awareness, integration, exchanges between our information awareness systems, joint exercises and port calls.

Do you see the EU’s Global Gateway initiative working with India to develop more transparent and resilient infrastructure projects? We have been historically been one of the main donors for development, including infrastructure. Now, there is a revolution linked to digital and green transition, and for that, you need infrastructure. We are not competing on the same thing [with China’s BRI]. For us, sustainability or the mechanism of accountability and transparency are different. Infrastructure projects are designed as a true partnership with all stakeholders. In terms of funding, it’s 300 billion euros in grants, concessional loans and guarantees. Imagine what it can [do] in terms of leveraging private investment. The guarantees can unlock and encourage investors. With the Global Gateway, we can be a vehicle for the kind of projects which are needed in the region and in India. We have several projects for smart urban mobility, green energy and climate. We are looking now at corridors for trade routes. In India, we have about 15 billion euros of investments that are geared towards green, sustainable infrastructure. Maybe, our Global Gateway proposal came at a moment where India was thinking along the same lines. That’s something that we certainly want to accelerate.

During India’s G20 presidency, there has been a push for reforms of the global financial architecture to ensure more funding for green projects. Can India and the EU work on reforms of MDBs? While addressing the global commons, [it is necessary to go past a] very polarising view of things. Those who want to do things, let them work together and go ahead. This is precisely an area where I think there is a genuine interest for doing things. The risk that we always have is that some have an interest to paint it as who is excluded. For us, it’s not about exclusivity, it’s the culture of inclusivity. In the same way, the G20 Summit declaration is also promoting inclusivity. India and the EU are both forces for good. We are committed to addressing global issues. We are not aggressive powers, we’ve always believed in trust, and now this trust has grown. We are partnering in the International Solar Alliance and initiatives launched by India. This is where we can build a coalition of the willing. I think it’s important not to lose sight of what we can achieve together.

What impact will the Israel-Hamas conflict have on India-Middle East-Europe Economic Corridor (IMEC) and how will funding be generated for this project? It’s true that the war is no good news in itself. It’s terrible, it’s a tragedy and IMEC could be a collateral of it. The question is whether it’s a temporary collateral or permanent collateral. If I were to see it from Dehli, we see the importance West Asia’s regional order represents historically and today. Even more so, in terms of energy and trade routes. Let’s hope that, first and foremost, this situation in Israel and Gaza does not further escalate. I think everyone is really concerned that it could escalate, that’s the first thing we need to be focused on.

IMEC was not defined by exclusivity, so that means the door is open. Let’s see what will happen with this conflict, but assuming that it doesn’t go into a nightmare or catastrophic scenario, and at some point, if there is a renewed impetus to address the political issue of the Middle East peace process...You need to fix that and the economy cannot be a substitute. But having said that, the economy will matter. I think IMEC is a good thing for everyone. Maybe the conflicts of West Asia are against IMEC for now, but it should not be any reason not to do the groundwork that is needed to make it take off once conditions are good enough. There are questions of funding, standards and approximation of various legislations. It’s a major undertaking, but there are many interested parties from the private sector and other countries which did not sign up. For the time being, unfortunately, it is a collateral [but] that doesn’t mean [we should] write off the rationale of the project.