Press play to listen to this article
They tried before, and it ended in tears. India and Europe simply wanted different things out of the relationship.
This Saturday, they are promising to make a more serious go of it.
Hammered by the coronavirus and increasingly threatened by China, Indian Prime Minister Narendra Modi wants to push for a deeper strategic alliance with the EU at a virtual summit with 27 national leaders, who will (mostly) gather in the northern Portuguese city of Porto.
But Europe has traditionally been far more interested in trade and market access than grand geostrategy. Modi knows that behind the warm words and platitudes expected in Porto, the EU would rather break down India’s 125 percent car tariffs than play a bigger role in Himalayan security. While the EU is happy to send emergency oxygen to India, New Delhi’s long-running plea that Europe should waive intellectual property rights on vaccines to accelerate the fight against COVID-19 has met stern resistance from Brussels, which remains resolutely on the side of Big Pharma.
India-EU trade talks ground on agonizingly from 2007 to 2013, but ended in impasse, with Europe frustratedly lambasting India for protectionism. The two sides are expected to pledge to resuscitate these negotiations on Saturday, but the real test of a Brussels-New Delhi rapprochement will only come later, as politicians wait and see if anything has really changed on the most intractable bones of contention like cars and farming.
India’s most pressing challenges have been exposed in the run-up to Porto. The coronavirus pandemic has laid bare the weaknesses in the country’s health system. And then, there’s China.
Even in the face of India’s coronavirus tragedy, Beijing has made scant attempt to disguise its enmity. Despite a pledge to help India in its hour of need, the Chinese Communist Party’s Political and Legal Affairs Commission came under fire last week for a social media post mocking India for cremation pyres while Beijing was launching a module into space. It later deleted the post, but Indians have few illusions about the severity of the rivalry with China, which killed 20 Indian troops in a mountainous border region last year and is a close ally of Pakistan, India’s arch enemy.
Ahead of Saturday’s meeting, the mood music from Modi and European Commission President Ursula von der Leyen is cordial, with both speaking of greater “momentum” toward a strategic partnership. “I’m encouraged by the prospect of intensifying our trade & investment relations,” von der Leyen said in a tweet after a preparatory telephone call with Modi.
Encouragingly for India, there are signs that Europe is starting to think more geopolitically about its position in the Indo-Pacific as both Brussels and New Delhi grapple with the rise of China. EU countries last month, for example, committed to an Indo-Pacific strategy that included a “meaningful” naval presence in the region, although it remains unclear what kind of firepower that will actually entail.
“The most significant aspect of the summit is the symbolic importance. For India, what is of interest is to figure out where Europe stands, and whether it would be a wild card or a reliable partner,” said Garima Mohan, an India expert at the German Marshall Fund of the United States, a think tank. “Between the EU and India, the elephant in the room is the element of China competition.”
Beijing is indeed a delicate question. Under pressure from Germany and its powerful car industry, the EU rushed into an investment deal with China at the end of last year, although this now looks unlikely to be ratified thanks to growing tensions over Beijing’s crackdown against its Muslim Uyghur minority in the western region of Xinjiang.
Mohan pointed out that, for India, the EU’s “mixed messaging” could be a source of confusion, given that Europe first agreed its big deal with China, followed up with sanctions on Chinese officials in Xinjiang, and then published an Indo-Pacific strategy.
Tortuous trade talks
Von der Leyen is highlighting four core areas for interaction with India: trade, digital, climate change and multilateralism. Trade and climate change are the thorniest pair, and the former could well put severe strain on relations once again.
In the digital sphere, an EU official said the summit would see a partnership on “more connectivity ” that goes beyond infrastructure and into domains like artificial intelligence. There is also “potentially” a chance for the EU to recognize India’s standards on data protection, he added, which would make digital trade easier.
On the more negative side, the EU is expected to raise concern over human rights problems in Indian cyberspace, as news emerged last week that the Indian authorities have censored social media posts about the COVID-19 pandemic. On multilateralism, a senior EU official stressed India had been invited to join in G7 diplomacy as an additional participant this year.
On climate change, no major breakthroughs are expected from India, the world’s third-largest carbon emitter, and the two sides are likely to produce vague language in Porto, partly as a placeholder ahead of the COP26 summit in Glasgow in November.
Trade policy will, however, be the true test over whether the relationship can improve. Despite rosy talks of a fully-fledged trade deal from both sides, the obstacles to a deal still loom large.
“At the high-level dialogue at February 5 it became clear that the conditions for negotiations in view of a free-trade agreement have not been fulfilled,” said MEP Geert Bourgeois of the conservative ECR Group, who is a member of the European Parliament’s EU-India delegation. “Ambition levels are too far apart to enter meaningful negotiations at the moment.”
Sunil Prasad, secretary-general at the Europe India Chamber of Commerce, believes Brussels and Delhi are more likely on track for a “limited trade deal.”
“The idea of such a mini trade deal is to pick the low-hanging fruits — agricultural products like wine or cheese, [sanitary and phytosanitary] issues, trade in goods and also investment protection — while some of the more complicated issues would be left for a later stage,” Prasad said. “Most importantly, there are some issues in the automobile sector. Opening the Indian automobile market is a still a big issue.”
For Brussels, cars will be a litmus test in any trade deal, said Nicolas Köhler-Suzuki, associate researcher at the Jacques Delors Institute. This sector has sky-high tariffs in India, and is the priority of EU kingpin Germany. “In a sense, the negotiation space has narrowed, but the issues that remain are still very significant,” he said.
The EU will also seek a sustainable development chapter in any agreement it concludes, which proved to be a sticking point in the previous talks.
“With a historical view, it just seems very, very unlikely that India would agree to any such thing [as a trade and sustainable development chapter], and at the same time, it feels very unlikely that the EU would actually conclude an agreement that doesn’t have these clauses,” said Nicolas Köhler-Suzuki, associate researcher at the Jacques Delors Institute.
Still, the good news for Modi and the dynamics on Saturday is that summits are about big gestures, not technical details. There won’t be time to get bogged down in these sort of problems.
“I personally think that trade is going to be just one small component [of the summit],” said Sangeeta Khorana, professor of international trade at Bournemouth University in the U.K.
Hans von der Burchard contributed reporting.
Want more analysis from POLITICO? POLITICO Pro is our premium intelligence service for professionals. From financial services to trade, technology, cybersecurity and more, Pro delivers real time intelligence, deep insight and breaking scoops you need to keep one step ahead. Email [email protected] to request a complimentary trial.
