Can the EU Elevate Its Partnership With India?
Signs of such a move, however, were already clearly visible in her first term. In that period, bilateral negotiations on a free trade agreement (FTA) started, and the creation of a Trade and Technology Council (TTC) showed that India was the only other actor, besides the United States, with which the EU could have a strategic conversation on those two topics. Even India’s position on the war in Ukraine—it refrained from explicit criticism of Russia and abstained in UN resolutions on the conflict—and its continuing ties with Moscow did not significantly alter New Delhi’s growing partnership with Brussels.
But since then there have been no bilateral breakthroughs. The TTC is struggling to take off, and FTA negotiations are generating new challenges. Overcoming this inertia and fundamentally changing the EU’s partnership with India demands structural change in the relationship. This piece outlines three key steps Brussels can take to bring that about.
Take Charge
For any meaningful change on India policy, Commission leadership must drive the bilateral agenda. It has done so with China, and the impact of Brussels’ “partner, competitor, rival” framing in a 2019 strategic outlook paper put the Commission ahead of the member states in terms of policy framing. Its leadership ensured that directorate generals (DGs) delivered on these goals outlined in the paper, while von der Leyen set an ambitious agenda by calling for de-risking from China. The result of these actions significantly changed European discourse on China policy.
This approach represents a case in which the Commission took charge in facing a systemic rival. With India, however, the strategy would entail policies to strengthen EU links with a key partner. It should also be easier to do. Member states were often at loggerheads with the Commission on some aspects of its China policy, but on India they want Brussels to have a more ambitious agenda after having increased their own bilateral political, diplomatic, and economic investment in India. Von der Leyen has a clear mandate to move forward in this area.
The Commission leadership should lead on India also because enhanced ties require an ambitious new agenda that breaks through deadlocks and ossified views of cooperation. Many Brussels bureaucrats working on India-related issues still perceive the country as difficult. Experience with New Delhi keeps them pessimistic about gains from the partnership. FTA negotiators still refer to the many failed rounds of talks in the early and mid-2000s, when India saw no real value in working with the EU. But since 2015, there has been a noticeable shift in Indian foreign policy toward Europe, with increasing diplomatic and political investment in the EU and its member states. India considers Europe a key partner in four areas that are priorities in every summit meeting between them: technology, trade and investment, migration and mobility, and security.
To align DGs and EU agencies with this new approach, von der Leyen needs to articulate European interest in engaging India as a trusted political, diplomatic, security, and technology partner, and outline clear deliverables for the next five years. Breakthroughs with India are achievable only if Commission leadership continually maintains the country as a top priority.
2. Prioritize Foreign Economic Policy
The Draghi report on European competitiveness recommends that the EU should focus on “increasing security and reducing dependencies”. This approach should be at the heart of a new EU partnership with India. The avenues for accomplishing this exist, especially as Europe seeks to reduce dependencies on China, and India seeks to move up the supply chain.
Currently, however, the most important deliverable in the EU-India partnership is an FTA that does not even cover most issues of economic security. Moreover, the drawn-out, complex FTA negotiations are quickly becoming an impediment to the momentum propelling cooperation in other areas of the relationship. This is an ominous sign. India has just revised its stance on FTAs and has become more open to them, but it seeks “early harvest” agreements that are easy to negotiate.
The EU should, too. Competition with China requires instruments that are more precise and effective than an FTA and deliver quick results. While FTA negotiations drag on, the Commission should focus on reaching an economic security and competitiveness package with India. The country’s relationship with the United States could serve as a useful model here. Successive administrations in Washington have established several high-level forums for discussing trade and technology issues with New Delhi, including the US-India Initiative on Critical and Emerging Technologies (iCET), the Quad’s critical- and emerging-technology working group, and, most recently, the US-India semiconductor supply chain and innovation partnership. All include US companies seeking to invest in India, an effort Indian firms seek to replicate as their country’s role in American economic security increases. These high-level dialogues are crucial for injecting political will into the commercial relationship, thereby circumventing some challenges of doing business in India.
The EU has only one such dialogue platform with India, the TTC. Its three working groups cover strategic technologies; green and clean energies and technology; and trade, investment, and resilient supply chains. The body, however, has failed to live up to its promise after it took nearly a year just to establish it and its working groups. Since then, enthusiasm has faded, and little has been accomplished. Both sides believe the format has not lived up to its potential.
3. Revive and Elevate the TTC
To prevent the council from becoming yet another underperforming dialogue and to cover urgent economic security questions with India, Commission leadership needs to urgently bestow more importance on the TTC. It currently lacks the high-level participation that the US-India iCET initiative has. iCET includes heads of state and national security advisers, and is shepherded by the two sides’ national security councils. iCET is also supported by the Indian Ministry of Foreign Affairs and the US State Department. This has created deep institutional links, increased government buy-in, and expanded bilateral cooperation to key technology sectors, including space, semiconductors, and advanced telecommunications. The EU-India TTC could see similar successes with greater involvement from Commission leadership. The DGs should be provided a timeline for clear deliverables that can be presented to and approved by political leaders at every EU-India summit.
The TTC could also raise its profile by focusing more on green technology, an area in which India is especially keen to enhance its partnerships with Europe. The second Trump administration is likely to withdraw from similar efforts, and the EU must seize this opportunity to elevate this TTC working group. The bloc should focus efforts in this regard on batteries for electric vehicles and green hydrogen, two stated priorities, and expand the TTC’s work to include clean energy manufacturing, an Indian priority and one from which the EU would also benefit as it seeks to reduce its dependence on China. As India focuses on clean energy supply chain segments, the TTC could address solar cells and wind plants. Power grids and transmission technologies are also areas of collaboration with great potential.
Brussels should also use the TTC to highlight India as a “trusted” partner that can contribute to the EU’s push to de-risk and diversify its own supply chains, particularly those related to technology, a sector in which there are growing concerns about Chinese data and cyber risks. India is already working with partners such as the United States to attract semiconductor and electronics manufacturing, and the EU could follow suit. Platforms, data governance, and telecommunications regulation are other areas ripe for collaboration, as is privacy-preserving digital public infrastructure, an area in which India is a leading player.
Finally, while FTA negotiations continue, the TTC trade and investment working group should be used to address the aforementioned, urgent economic security issues. The EU should use the group for broad-based sectoral exchanges with India that focus on improving market access and removing trade barriers in mutually important sectors. The group should focus on creating high-level formats, similar to those characterizing the US-India partnership, that address critical areas for cooperation. Such exchanges, while not trade agreements, can allow the EU and India to align their industrial policies, reduce dependencies on China, and help ensure both parties remain competitive globally.
Today, largely due to the challenges posed by China, the EU and India share unprecedented strategic convergence. India is, therefore, investing in European partnerships more than ever before, and the incoming Trump administration’s isolationist tendencies could spur Brussels and New Delhi to move even closer together. It has been noted often that the EU can engage India only on trade as the bloc’s member states have security and defense competencies. However, mutual concerns about China and the EU Commission’s embrace of a broader trade, technology, and security agenda have opened crucial new avenues for cooperation between Brussels and New Delhi. Limiting this partnership to an FTA will not engender the kind of change that the Commission wishes to see.