1 August 2020, NIICE Commentary 5749
Shairee Malhotra
COVID-19 is proving to be a Eureka moment for the world – it has exposed existing vulnerabilities of the global order, international institutions are under stress, and geopolitical contestations have taken over. The geopolitical tussle between the great powers – the United States and China – is enabling consequences for middle powers such as India, the European Union, Japan and Australia. In the absence of global leadership, these middle powers now find themselves at a strategic crossroads, navigating the space in between and attempting to find their voices in a newly emerging global order.
A re-think of their strategic priorities – based on realisations that American leadership is no longer reliable coupled with increasing wariness about Chinese efforts to shape geopolitics in its favour – is propelling middle powers to seek likeminded partners elsewhere. Against this global backdrop of events, the 15th EU-India summit took place virtually on 15 July 2020. The timing could not have been better – the summit’s postponement due to COVID-19 from March, when PM Modi was due to visit Brussels, has proven to be a blessing in disguise for the partnership.
The EU-India Strategic Partnership Roadmap to 2025 – a comprehensive 5 year action plan – was released on the eve of the summit. This reflects a renewed level of commitment and strategic momentum in the partnership – in stark contrast to the recent 22nd EU-China summit that did not even result in a joint communiqué. This roadmap must be seen in tandem with the 2018 EU Strategy for India that refers to “India as a geopolitical pillar in a multipolar Asia, crucial for maintaining the balance of power in the region” as well as European Commission President Von der Leyen’s ambitions to give Brussels a more “geopolitical” role.
In these extraordinary times with the multilateral rules-based global order under severe strain, phrases such as “common values” that are a cornerstone of the Strategic Partnership signed in 2004, have attained greater significance. The summit saw both the EU and India reiterate their commitments to strengthening multilateralism through cooperation in the World Trade Organisation, World Health Organisation as well as during India’s membership of the United Nations Security Council and its upcoming G20 presidency in 2022.
The elephant in the room was China, towards which both the EU and India have traditionally adopted attitudes of cooperation and engagement. But ties with China have reached new lows for both during the pandemic, resulting in realisations that the status quo can no longer persist. India was the unfortunate recipient of a deadly border attack by the People’s Liberation Army on its soldiers in the Galwan valley standoff. China’s mask diplomacy in countries like Italy and Spain – initially hit hardest by the pandemic – along with differences with economically weaker Central and Eastern European member states welcoming Chinese loans and investment – have raised alarm bells within the EU. China’s exploitations of schisms within the European continent are eerily similar to India’s experiences of its own South Asian neighbourhood – recent tensions between Nepal and India, and China’s ‘debt trap’ diplomacy in Pakistan and Sri Lanka, are challenging India’s position as South Asia’s hegemon.
Both the EU and India are simultaneously undergoing deep moments of introspection and waking up to the reality of Chinese influence in their neighbourhood. This is pushing them to diversify their relationships with likeminded partners to balance the dragon.
With normative and security considerations looming large, the EU’s partnership with the world’s largest democracy is appearing a lot more attractive. The EU’s remarks alluding to cooperation with China but common values with India depicts how the values rhetoric is once again assuming centre-stage. For India too, the EU’s advantages are moving beyond the realms of economics to checking and balancing Chinese influence within global trade, technology and other sectors.
The summit also involved other important areas of cooperation such as climate action including clean-energy transition and the international solar alliance, maritime security including the need to preserve stability in the Indian Ocean Region, counter terrorism including a pact between Europol and India’s Central Bureau of Investigation, and digital cooperation including developing global standards for 5G and AI – another clear reference to Huawei and China. A civil nuclear agreement – under negotiation for 13 years – was also finalised on the eve of the summit.
The highlight though was the decision to establish a high-level dialogue on trade and investment at ministerial level. Even though the relationship is gaining strategic ground, trade is its building block and unsatisfactory progress on this front will impact the broader relationship. Bringing the Bilateral Trade & Investment Agreement (BTIA) negotiations back on the table can break the bottleneck in trade relations, especially when mitigating the economic fallout from the pandemic is an urgent priority. Given the EU and India’s parallel attempts to reduce economic reliance on China and diversify supply chains, they could find a newfound readiness for pragmatism and concessions on sticking points.
Yet, EU officials expressed concerns regarding Indian pronouncements of becoming self-reliant, read by some as a turn towards further protectionism. But if India chooses to become more economically competitive, it would also positively impact the wider balance of power in Asia, thereby advancing both European and Indian strategic interests. A 2017 report by German think tank Bertelsmann Stiftung estimates that India’s GDP could grow by 1.3 percent annually due to a Free Trade Agreement with the EU – the world’s largest trading bloc. The recently concluded EU-Vietnam FTA, even though likely to hinder India’s exports to the EU, is optimistically indicative of the possibilities of finding common ground.
Historically, India and the EU have struggled in turning political declarations and ambitions into actual policy and cooperation. Observers have lamented the lacking “strategic” nature of the partnership. But, this time around, the cosmos seems to have worked hard to align the two strategically.
The time is ripe “to translate common values into common action”. The summit’s diplomatic efforts are a step in the right direction – in moving the partnership beyond a trade and development lens into an all encompassing strategic one, and beyond the disappointing impasse that often characterizes the relationship. As they swim in volatile waters, the EU and India are finally coming to terms with the value of the other – as key strategic actors intrinsic to their respective interests.
