India-Europe

Snapshot

The list of bilateral agreements signed between India-EU are as follows:

• • Over the years, India and the EU have signed a number of bilateral agreements and MoUs. The notable ones are as follows:
    • Science & Technology Agreement (2001, renewed in 2007)
    • Joint Vision Statement for promoting Cooperation in the field of Information and Communications Technology (2001)
    • Customs Cooperation Agreement (2004)
    • Memorandum of Understanding on Cooperation in Employment and Social Affairs (2006)
    • Horizontal Civil Aviation Agreement (2008)
    • Joint Declaration in the field of Education & Training (2008)
    • Joint Declaration on Multilingualism (2009)
    • Agreement in the field of Nuclear Fusion Energy Research (2009)
    • Joint Declaration on Culture (2010)
    • MoU on Statistics (2012)
    • Joint Declaration on Research and Innovation Cooperation (2012) and
    • Joint Declaration on Enhanced Cooperation in Energy (2012)

Areas and Instruments of Cooperation

1. Trade

• • Relevant Facts
    • The EU is India’s third largest trading partner, accounting for €62.8 billion worth of trade in goods in 2020 or 1% of total Indian trade, after China (12%) and the US (11.7%)
    • The EU is the second-largest destination for Indian exports (14% of the total) after the USA.
    • India is the EU’s 10th largest trading partner, accounting for 1.8% of EU total trade in goods in 2020, well behind China (16.1%), the USA (15.2%), and the UK (12.2%).
    • 
    • The largest sectors of India’s Exports to the EU are engineering goods, pharmaceuticals, gems and jewellery, other manufactured goods and chemicals
    • Additionally, over 6,000 European Union companies are said to operate in India, providing direct and indirect employment to over six million people

• • Free Trade
    • Since the 1970s, India has been a beneficiary of preferential tariffs for its exports under the EU’s Generalised system of preferences(GSP), which reduces import duties for almost 66 percent of product tariff lines with an aim to support various industrial sectors in the developing countries

• • • With the establishment of an Investment facilitation mechanism for EU investments in India in 2017, there is a renewed focus on facilitating ease of doing business norms for EU investors in India.
      • This mechanism allows for close coordination between the Indian government and the EU to formulate solutions to the issues and problems faced by EU investors in operating in India
    • Also, India and the EU have been working on a Broad-based Trade and Investment Agreement (BTIA) since 2007, but India’s trade regime and regulatory environment remains comparatively restrictive

2.Political Cooperation

• • Over the years, a multi-tiered institutional architecture for cooperation with the EU has been created with the Summit at its apex
    • The first India-EU Summit was held in 2000 which marked a watershed in the development of the relationship
    • The relationship was upgraded to a ‘Strategic Partnership’ during the 5th India-EU Summit held in 2004
  • In 2018, EU’s strategy on India entitled “A Partnership for Sustainable Modernization and Rules-based Global Order” was issued by the European Commission and the EU High Representative for Foreign Affairs and Security Policy.
    • It views India as an emerging global power that plays a key role in the current multipolar world and a factor of stability in a complex region and calls for greater India-EU political, security and defence cooperation
  • India-EU Agenda for Action 2020 endorsed by the 13th India-EU Summit in
  • 2016 serves as a framework for exchanges and cooperation between India and EU in various sectors
  • Further, the bilateral Strategic Partnership encompasses thirty one dialogue mechanisms covering a wide range of issues including trade, energy security, science & research, non-proliferation and disarmament, counter terrorism, cyber security, counter-piracy, migration and mobility, etc.

3.Development Partnership

• • India-EU development cooperation spans several decades and encompasses issues like health, education, poverty reduction, water and sanitation
  • The 2005 JAP highlighted that since 1976, the European Commission has committed 2 billion euro (US$ 2.4 billion) in development cooperation to India
    • Also, the Indian government’s decision to limit the number of international donors marked a concrete step towards changing the dynamics of development cooperation with the EU.
  • In 2014, the EU ended its Development Cooperation Instrument (DCI) with India; between 2007 and 2013, the total EU assistance to India through the DCI was 450 million euro (US$ 545 million)
  • 2014 onwards: changing contours from the donor-recipient paradigm to that of cooperation through several instruments
    • The first is the combining of loans from international financial institutions and EU grants for developmental needs with the combined DCI and Asian Investment Facility portfolio of 180 million euros (US$ 218 million) in commitments over 2014-2020 for investment in the health sector, smart cities initiative, sustainable urban development and mobility
    • The second key development cooperation instrument is the European Investment Bank (EIB), which has provided loans for three different metro projects in India – Lucknow, Pune and Bengaluru
    • Third, the education and science and technology sectors have emerged as key areas of development cooperation. India is the largest recipient of Erasmus Mundus funding for higher education

4.Defence and Security

• • The 6th India-EU Foreign Policy and Security Consultations were held in 2018 to review the ways and means of strengthening India-EU Strategic Partnership
  • A bilateral dialogue on counter-terrorism meets from time to time to discuss cooperation in the area of countering terrorism, violent extremism and related areas
  • India and EU have gradually enhanced bilateral exchanges and cooperationin the field of defence & security.
    • This includes mutual ship visits, collaboration in escorting humanitarian aid ships and exchanges among military officials, including the EU Military Committee.
  • The new Information Fusion Centre – Indian Ocean Region in New Delhi (IFC-IOR) has recently been linked-up with the Maritime Security Centre – Horn of Africa (MSC-HOA) established by the EU Naval Force (NAVFOR)

5.Science, Research and Innovation

• • India-EU Science & Technology Steering Committee meets annually to review scientific cooperation
  • The committee identified a number of areas for collaboration such as smart grids, bio-economy, health research, polar science and cyber systems
  • ISRO has a long standing cooperation with the European Union, since 1970s
    • ISRO and the European Space Agency are working towards enhancing cooperation in earth observation.
    • A Joint Working Group (JWG) identifies cooperation opportunities in areas such as earth science, space science, space technology and integrated applications.
    • A Cooperation Arrangement between the European Commission and the Department of Space pertaining to the Copernicus programme signed in 2018 provides a framework for the exchange of data and wider cooperation in the space sector
  • Further, India and the EU are working closely on several fronts that cover the Sustainable Development Goals (SDGs) — such as the smart cities initiative (SDG 11), clean water and sanitation (SDG 6) and climate action (SDG 13)
    • The two have become key stakeholders in global efforts to combat climate change through the framework of Clean Energy and Climate Change Partnership, 2017

6.Maritime Cooperation

• • The Joint Action Plan adopted in 2005, highlighted and emphasized on maritime cooperation.
  • In the past few decades, both India and the EU have stressed on the idea of freedom of navigation, maritime piracy, and adherence to United Nation Conventions on the Law of the Sea (UNCLOS) and the development of the blue economy and maritime infrastructure.
  • Both have identified the Indo-Pacific as the new avenue for maritime cooperation.
  • In January 2021, India and the EU hosted the first Maritime security dialogue in a virtual format

7.Climate Change

• • India-EU relations have witnessed a commitment of international agreements such as the Kyoto Protocol and the Paris agreement
  • Ministry of Earth Sciences (MoES) and the European Commission (EC) have established a co-funding mechanism (CFM) to support joint research projects selected under European Research & Innovation Framework Program ‘Horizon 2020’ related to climate change and polar research
  • The EU has also invested in numerous programmes such as India-EU water partnership, solar park programme, and Facilitating Offshore Wind in India (FOWIND).
    • The major investments was the signing of the 200 million EUR loan agreement between the EIB and the Indian Renewable Energy Development Agency

8.Data Protection and Regulation

• • The Roadmap 2025 document for the first time reflected the need to build effective cooperation on data protection and regulation
  • During the 15th India-EU Summit, both sides agreed for greater convergence of the regulatory frameworks through data adequacy decision for the facilitation of cross-border data flow as well as engaging in dialogue regarding safe and ethical usage of AI and 5G

Roadblocks in negotiations

• • Political
    • The BTIA is nowhere near finalisation despite 16 rounds of discussions due to several contentious issues, including the trade in services and goods, intellectual property rights (IPR) and data security
    • Issues relating to Intellectual Property Rights(IPR)
      • Indian legislation bans both “ever-greening of patents (extending the time coverage of patents just before they expire, through minor changes to the product) and the exclusivity of test data (protection of clinical trial data), saying they jeopardise the sale of low-priced generic drugs and chemicals”
        • In this perspective, the EU expects India to strengthen its IPR regime
      • Another contentious aspect is the Investor-State Dispute Settlement mechanism in which EU wants detailed provisions while India is reluctant to accept this provision
  • Trade related
    • In trade in services, the areas of disagreement are in Mode 1, 3 and 4, as defined under the General Agreement on Trade and Services
  • 
    • • While India has demanded greater access to the European market under Mode 1 and 4, the EU has demanded increased access to the Indian economy under Mode 3
    • When it comes to trade in goods, the EU has demanded the lowering of tariffs on wines, spirits, dairy and automobiles, but India has raised concerns that this could result in European imports flooding the market without any reciprocal access to the European market
    • India has demanded the lowering of non-tariff barriers in the sanitary and Phyto-sanitary sectors, and technical barriers imposed by the EU.
      • The strict labelling and trademarking norm imposed by the EU has led to the reduction of Indian exports to the European market

Way forward

• The global geopolitical scenario has changed over the past few years.
  • The uncertain US policy outlook, the upending of the liberal multilateral order and the rise of an assertive China has led both India and EU to realise that a substantive engagement was imperative
• Also, Given India’s growing regional and international relevance, it is crucial for the EU to renew its focus on developing the economic, political and defence partnership.
• Thus, negotiators from both sides must look beyond the multiple differences to focus on the complementarities
• Overall, Intensified dialogue and deliberations, a realignment of trade policies and emerging prospects of collaboration in the post-pandemic world provide India and the EU, an opportunity to transform their economic ties into a robust strategic partnership

Snapshot

Areas and Instruments of Cooperation

1.Political Relations

• • India and UK are bound by strong ties of history and culture
  • India’s multifaceted bilateral relationship with the UK intensified with its upgradation to a Strategic Partnership in 2004
  • Both countries adopted a Joint Declaration titled ‘India-UK: towards a new and dynamic partnership’ which envisages annual Summits and regular meetings between Foreign Ministers
  • It also outlined areas for future cooperation in civil nuclear energy, space, defence, combating terrorism, economic ties, science & technology, education and culture
  • In 2010, the relations were elevated to ‘Enhanced Partnership for the Future’
  • The UK supports India’s proposal for permanent membership of the UNSC and is also an important interlocutor for India in the EU, G8, G20 and global contexts
  • The Parliaments of India and the UK enjoy traditionally close relations
  • A new group of Lords, MPs and prominent British Indians of Conservative Party, called the Conservative friends of India group, was launched in 2012 with the purpose of a more meaningful relationship between the Conservative party, British Indian community, and India
  • Also, the India-UK Round Table was set up as a non-government channel for long range and ‘out of box’ thinking on the future of our bilateral relationship
  • Politically, relations between India and the UK occur mostly through the multilateral organisations of which both are members, such as the Commonwealth of Nations, the World Trade Organization and the Asian Development Bank

• • Bilateral Institutional Engagements include:
    • The India-UK Foreign Office Consultations provide an opportunity to review the entire range of bilateral relations, including political, economic, commercial, scientific, regional and international cooperation
    • The India-UK Disarmament and Non-Proliferation Dialogue discusses issues such as NPT, Civil Nuclear Cooperation, INF & New START, CWC & BWC, JCPOA, Gulf, DPRK, China, Pakistan and Export License
    • The India-UK JWG on Counter Terrorism condemns terrorism in all its forms and manifestations, exchanges views on threats posed by globally proscribed terrorist entities, reaffirms to work together
    • In addition, India and UK also regularly meet under the UN Dialogue, Policy Planning Dialogue, Strategic Dialogue, Cyber Dialogue and Home Affairs Dialogue to discuss cooperation in specific sectoral areas

2.Defence relations

• • After Independence from the British Raj in 1947, India embarked on its own foreign and national defence policy that was characterized by the Non-Aligned Movement (NAM)
    • With the colonial experience fresh in their minds, India’s policymakers chose this approach to not get caught between the great powers in their cold war
  • After the end of the Cold War, the two countries entered into a strategic partnership in 2004
    • Annual summits and meetings between heads of government and foreign ministers were envisaged, as was cooperation in the areas of combating terrorism, civil nuclear activities, and civil space programs, amongst others
  • In 2015, the Defence and International Security Partnership framework was unveiled, calling for enhanced cyber, defence, and maritime collaboration and stating UK’s support for projects under the “Make in India” initiative
  • Around 70 defence related companies across the UK supply various goods for aircraft/helicopter manufacturing/overhaul at HAL like ejection seats, fuel tank kits, hydraulic pumps, engine spares etc and support legacy platforms like Jaguar, Mirage & Kiran
  • Maritime cooperation is another area where engagement is increasing. UK is deploying Carrier Strike Group in Indian Ocean region this year in line with its strategic tilt to Indo-Pacific

3.Economic and Commercial Relations

• • The India-UK economic relations received a vibrant upward direction after the establishment of Joint Economic and Trade Committee (JETCO) in 2005 to tackle trade and investment barriers on both sides and promote business links
  • In 2021, total trade between India and UK amounted to USD 13.11 Billion
  • As of 2021, India is UK’s 15th largest trading partner, and the UK is India’s 18th largest trading partner with manufacturing exports accounting for over 90 percent of India’s export to the UK, consisting of clothing, medicinal and pharmaceutical products, metal manufacturers, organic chemicals, and precious stones
  • India has invested in 120 projects and created over 5,000 jobs in the UK to become their second-largest source of foreign direct investment (FDI) only behind the United States
  • 
  • In the recent Joint Economic and Trade Committee (JETCO) meeting of 2020, Both sides agreed to remove barriers to trade as part of a roadmap to a Free Trade Agreement
  • Also, negotiations for an India-UK free trade agreement (FTA) are set to begin early next year as officials on both sides continue their engagement following the conclusion of working groups, allowing both to establish selective gains in commodities and services

4.Nuclear Cooperation

• • Both nations, have signed a Civil Nuclear Cooperation Declaration in 2010 which will help promotion and facilitation of cooperation in the nuclear field including nuclear trade and also between the scientific institutions of the two countries
  • Further, In 2015, the UK and Indian Prime Ministers signed a Nuclear Collaboration Agreement between the two countries as part of a comprehensive package of collaboration on energy and climate change, that amounts to a total of 3.2 billion pounds worth of commercial deals between the UK and India, including joint research programmes and initiatives to share technical, scientific, and financial and policy expertise

5.Education

• • This started with the signing of the Science and Technology Agreement in 1996
    • In 2006, a new orientation was given to S&T Cooperation with setting up of the ‘Science and Innovation Council’ which is the main framework within which India-UK Science & Technology cooperation operates
  • During the 2010 UK-India Summit, the Prime Minister of the United Kingdom and India came into agreement to support education, by implementing the India Education and Research Initiative (UKIERI)
  • UK is among the favoured destinations for Indian students to pursue higher education
    • Around 50000 Indian students are currently studying in UK
  • Also, UK identifies India as a key development partner. Further, the two sides are discussing Global Innovation Programme, which will support Indian sustainable innovations to be scaled up and transferred to select developing countries

 6.Climate and Environment

• • India and UK closely engage on climate related issues through various mechanisms including the Ministerial Energy Dialogue and Joint Working Groups on Climate, Power and Renewables.
  • India-UK Green Growth Equity Fund is mobilising institutional investments in the renewable energy, waste management, electric mobility and environment sub-sectors in India

7.Health

• • Health sector collaboration is a key element of India-UK Strategic Partnership. The Joint Working Group on Health and Life Sciences regularly meets to prioritise and coordinate bilateral cooperation in the health sector.
  • The successful partnership between Oxford University, AstraZeneca and Serum Institute of India on Covid19 vaccine demonstrated the potential of Indian and UK expertise working together to solve international challenges
  • The two sides are also working on pandemic preparedness, Antimicrobial Resistance (AMR), Zoonotic research, non-communicable diseases, digital health, Ayurveda and alternate medicines, as well as health worker mobility
  • During the visit of Indian PM to UK, they launched the ‘Ayuryoga’ programme in November 2020 and started online modules to raise awareness and practise of Ayurveda and Yoga in UK

8.Culture

• • India and UK signed a Memorandum of Understanding on Cultural Cooperation in 2010
  • The Nehru Centre (TNC), established in 1992 in London, is the cultural outreach of the High Commission of India in UK
    • The Centre organises a wide range of cultural functions at its premises
  • Also, Of Britain’s population of 62.3 million, the population of Indian origin is estimated to be around 1.8 – 2 million, accounting for the single largest segment of ethnic population
  • The Queen of England hosted the official launch of the UK India Year of Culture in 2017 at Buckingham Palace with Indian Finance Minister

Irritants/Constraints in India-UK relations: Way forward

• • Trade barriers
    • While leaving the EU may mean that the UK can sign a bilateral trade agreement with India to remove some of these, a comprehensive deal is highly unlikely to be completed in the near future
    • India, which only has nine bilateral trade agreements—and none with a Western country—has made clear that it is not “in a rush” to make a deal with the UK, and that it would demand concessions on movement of people, which have been a sticking point for the UK in EU-India trade negotiations
    • Way forward
      • Both the Government should prioritise trade talks with India and do more to lay the groundwork for an eventual deal
  • India’s business environment
    • The complexity of India’s business environment constrains trade and investment
    • Complicated laws on tax, imports, and foreign direct investment, and variations in the business environment between Indian states hinder doing business
    • Way forward
      • Starting out with improving access to targeted support for UK businesses in India, particularly start-ups and smaller businesses – could be the way out to improve the business environment in India

• • Influence of China
    • Despite these shared interests, the UK and India have sometimes diverged in their positions towards China’s role in the Indian Ocean
    • India is concerned about China’s growing influence in the region, including its investments in ports through the Belt and Road infrastructure initiative (BRI)
    • The UK, by contrast, has engaged substantially with Belt and Road. This risks feeding a perception in India that the UK has prioritised its relationship with China
    • Way forward
      • The UK and India’s convergence of interests in the Indian Ocean region offers an important opportunity to increase engagement on defence and security
      • Hence, both nations should promote standards of transparency and sustainability for infrastructure projects in the region
  • Defence Ties
    • On India’s side, the key hindrances have been its red tape-ridden and perilously slow procurement/acquisition process, low incentives for foreign original equipment manufacturers to invest in India, and uncertain rules and regulations regarding the exportability of systems developed
    • On the other hand, the UK has been slow to adapt to the Indian government’s increasingly preferred method of acquisition—through Government-to-Government (G2G) agreements or Foreign Military Sales (FMS) for deals with the US
    • Way forward
      • With the UK expanding its footprint in the Indo-Pacific and India working toward gaining prominence as the net security provider in the region, both countries’ aspirations and future seem to be intertwined. Hence, the imperative for thorough execution
  • Role of Pakistan
    • The UK’s ties with Pakistan complicate the process of building a closer defence and security relationship with India
    • Way forward
      • The UK’s ability to maintain good relations with both New Delhi and Islamabad, and be perceived as a credible interlocutor, is particularly important following these clashes
  • Colonial Prism
    • Anti-colonial resentment against Britain is always seething barely below the surface among the Indian political and bureaucratic classes
    • Also, the bitter legacies of the Partition and Britain’s perceived tilt to Pakistan have long complicated the engagement between India and the UK

Way forward

• • India needs to recognise the lack of harmony between different strands of the relationship. Long joint statements and unreachable ambition are not the answer. Arriving at common ground on issues troubling India should be the foremost concern
  • This relationship has had many beginnings. Just to stay in the game, we have to concede to geopolitics. Britain (post- Brexit) and India (with the China challenge) need partners. Given India’s difficulties amid the pandemic, Britain has early advantage
  • Hence, the need to bank on the profound ties of culture, history and language to further deepen relations between India and UK

Snapshot

• The areas of defence cooperation, space cooperation and civil nuclear cooperation constitute the three principal pillars of our Strategic Partnership.
  • Apart from these traditional fields of cooperation, India and France are increasingly engaged in new areas of cooperation like climate change, sustainable growth and development, the International Solar Alliance etc.
• India and France support a multi-polar world order.
  • France has continued to support India’s claim for permanent membership of the Security Council and the reforms of the United Nations.
  • France has provided consistent support to India’s candidature for the membership of all the four Multilateral Export Control regimes, viz. Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement (WA) and the Australia Group (AG)
• India and France have consistently condemned terrorism and have resolved to work together for the adoption of the Comprehensive Convention on International Terrorism (CCIT) in the UN

Areas of Cooperation

• • Institutional Dialogue
    • India and France have a range of regular institutional dialogue. India-France Strategic Dialogue takes place between National Security Advisors from both sides
    • Joint Working Group on Counter Terrorism, Cyber Dialogue, Track 1.5 Dialogue with the participation of the Observer Research Foundation from our side and the Strategy and Policy Planning Division of the French Ministry called CAPS and the Centre for International Studies and Research (CERI as the French acronym stands) are the other active mechanisms
    • In 2018, Both countries concluded a bilateral agreement on “Exchange and Reciprocal Protection of Classified or Protected Information”
      • They also issued a “Joint Strategic Vision of India-France Cooperation in the Indian Ocean Region” to maintain the safety of international sea lanes, for countering maritime terrorism and piracy and for building maritime domain awareness
      • India and France also signed an “Agreement for the provision of reciprocal logistics support between their Armed Forces” to extend logistical support on reciprocal access to their respective facilities for their armed forces

• • Defence Cooperation
    • Regular exchange of visits at the level of Services Chiefs takes place
    • The three services also have regular defence exercises; viz. Exercise Shakti(Army), Exercise Varuna (Navy), Exercise Garuda (Air Force)
    • Apart from service-level staff talks, the two sides have a High Committee on Defence Cooperation (HCDC) which meets annually at the level of Defence Secretary and the French Director General of the Directorate of International Relations and Strategy (DGRIS).
    • Apart from this, various staff courses, training programmes etc. also regularly take place.
    • Major on-going defence-related projects
      • Purchase of Rafale aircraft
        • India and France inked a ₹59000-crore deal for 36 Rafale jets in 2016
      • P-75 Scorpene Project
        • In 2005, a contract of strategic importance was signed between India and France for construction of six submarines through License Agreement
    • Both nations have agreed to strengthen bilateral defence and security partnership through enhanced intelligence and information sharing, operational cooperation, bolstering mutual capabilities, expanding bilateral exercises and pursuing new initiatives in maritime, space and cyber domains

• • Space Cooperation
    • India and France have a rich history of cooperation in the field of space going back to fifty years with ISRO and the French Space Agency, CNES carrying on various joint research programmes and launch of satellite
    • Building on the historical linkages in the arena of civilian space, both India and France have issued a “Joint Vision for Space Cooperation” in 2018, under which both nations will work on:

• • • • Bringing societal benefits of space technology
      • Imaging Earth in high resolution.
      • Space domain and situational awareness
      • Addressing the Global Challenges including climate change, where both sides will pursue their cooperation for climate monitoring on the joint missions Megha- Tropiques and Saral-Altika, the ongoing studies of the Trishna satellite for land Infrared monitoring and the Oceansat3-Argos mission
      • Exploring the solar system and beyond
      • Developing technologies for human exploration of the universe
      • Cooperation on Space Transportation Systems
    • India and France have signed an agreement for the cooperation on Gaganyaan Mission.
      • • France space agency, CNES, will support scientific experiment plans and will provide French equipment, consumables, and medical instruments for Indian astronauts use.

• • Civil Nuclear Cooperation
    • France has been instrumental in India’s nuclear technology progress.
    • The French Atomic Energy Commission (CEA) offered technical cooperation to India on civil nuclear innovation in 1950, which materialised in 1951, with the two countries signing a bilateral agreement “for the research and construction of beryllium-moderated reactors”
    • Following India’s 1974 peaceful nuclear explosion, France emerged as the only western country to commend the event, pointing to it as a reflection of India’s advancement in the nuclear sector.
      • Much before the nuclear accord, France’s support to India was already seen in its continued supply of fuel to India’s Tarapur Nuclear Plant after the US and Canada terminated their agreements in protest of the 1974 peaceful nuclear explosion
      • Also, France also openly opposed US sanctions on India after the 1998 nuclear tests, and helped in creating a positive environment during India’s negotiations with the IAEA
    • Further, a landmark agreement on civil nuclear cooperation was signed between India and France in 2008
    • According to the agreement, France will construct six European Pressurised Reactors (EPR nuclear reactors) of 1,650 MW each and implement the 9,900 MW Jaitapur Nuclear Power Project (JNPP) in an expedited manner

• • Economic Cooperation
    • In 2018, India and France have committed to increase bilateral trade to 15 billion euro by 2022 and “timely relaunching” of negotiations on the India-EU free trade agreement
    • Economic relations between France and India (goods exchanged amounted to €11.5 billion in 2019) are uneven, with the balance weighing heavier on India’s side
    • France ranks 25th among countries supplying India, with a 1% market share, and is its 15th-largest customer
      • The aviation, chemicals and pharmaceuticals industries represent a significant portion of French exports to India.
    • France is among India’s leading foreign investors, with foreign direct investment stock of €5.5 billion at the end of 2018 (6th-largest G20 investor).
      • Currently, France is the 9th largest FDI source for India
    • There are more than 1000 French companies, including SMEs, in India in sectors such as services, aviation, railways, cement, pharmaceuticals, defence, automobile, energy, food processing, etc.
    • Also, France is cooperating with India as part of its “Smart Cities” programme. French companies in the sustainable urban development sector are already working in more than twenty cities (metro, water supply, etc.)

• • Climate Change
    • France and India are strengthening their cooperation for the environment and the fight against climate change. The Agence Française de Développement (AFD) started working in India in 2008, and has a mandate focused on the preservation of global public goods.
    • The International Solar Alliance (ISA), jointly launched by France and India in November 2015 during COP21, promotes the development of solar energy
    • The blue economy and coastal resilience are shared priorities for France and India, which intend to strengthen cooperation in the field of marine scientific research and their mutual knowledge of the oceans

• • Cultural Cooperation
    • Indian culture enjoys wide admiration among the people of France. The Indian Council of Cultural Relations (ICCR) regularly sends Indian cultural troupes to France
    • India and France organize reciprocal festivals, aiming to promote their culture: in France, the Namasté France festival showcased India in late 2016, while in India, Bonjour India was held in late 2017-early 2018.
    • India was a guest of honour at the Paris Book Fair in 2021, while France will be a guest of honour at the New Delhi World Book Fair in 2022
    • Many notable Indians have been awarded by France for their contribution in their respective fields as follows:
      • France’s highest French civilian honour comes in recognition of Shri A.S. Kiran Kumar’s invaluable contribution to the development of the India-France space cooperation.
      • Indian-origin Diagnostics company GeneStore awarded as best investment in France
      • Indian Soumitra Chatterjee has been awarded the France’s highest award for artists

• • Education
    • In the field of S&T, the Indo-French Centre for the Promotion of Advance Research (CEFIPRA) based in New Delhi established in 1987 is playing a major role by funding joint proposals for research in sciences and evaluating existing research projects.
      • Joint Indo-French research projects funded by CEFIPRA have led to several patents.
      • CEFIPRA also awards Raman-Charpak scholarships since 2013 to Indian and French scholars.
      • Several other bilateral cooperation programmes exists including the establishment of an Indo-French Ministerial-level Joint Committee on Science and Technology
    • Around 300 MoUs have been signed between Indian and French Universities and private Institutions
    • The number of Indian students studying in France reached 10,000 in 2019 (with an objective of 20,000 by 2025), supported by scholarship programmes and partnerships between Indian and French institutions
    • The framework for bilateral educational cooperation is provided by the Educational Exchange Programme (EEP), which includes mutual recognition of degrees, bolstering the research programme and increasing student-scholar research mobility through a flexible visa regime. A Joint Working Group has also been set up under the EEP

Challenges to India-France Relations

• • Climate change
    • Thermal power is still feasible and more economical than ‘Solar Energy’ in India. Hence, the lack of driving Intent for International Solar Alliance (ISA) to make much headway in near future
  • Political Cooperation
    • France’s commitment to Belt & Road Initiative is in stark contrast to India’s stand as well; hence the strategic differences between the two nations
    • Also, the cooperation on Indo-Pacific is merely symbolic, which need further review in the comnig years
  • Nuclear Cooperation
    • Reports highlight that electricity from the Jaitapur project will be more expensive than many other sources of electricity, including solar and wind power
    • In addition to the high costs, safety problems with the reactor design and construction have emerged in several EPRs
    • These safety concerns are exacerbated by India’s flawed nuclear liability law
    • Further, Delay in the Jaitapur project is affecting future cooperation on the nuclear front.
  • Defence Cooperation related
    • Delays and controversies around Rafael deal are also affecting mutual trust between both the nations

Way forward

• • France and India can work towards building strengthened coalitions within existing multilateral systems
    • By cooperating within frameworks such as COVAX and ACT, France and India can work towards engaging with and defending the interests of Lower and Middle Income Countries (LMICs) who have been side-lined in multilateral forums addressing the current Covid-19 crisis.
  • Similarities between India and France’s definition of the Indo-Pacific strategy being one of inclusivity, sovereignty, engagement and freedom of navigation creates room for cooperation
    • By building coalitions to constrain behaviour from China and defending values of multilateralism, India and France must translate their converging views on the Indo-Pacific into action
  • The two countries must continue to work together in areas such as maritime domain awareness, terrorism, cybercrime, piracy, disaster relief and the blue economy. Engagement on a multilateral level through the QUAD, ASEM and trilateral engagements such as the India-Australia-France dialogue must also take place.
  • The rapidly developing nature of the industry calls for fast-tracked initiatives for cooperation in areas such as data protection, data localisation, investing in Indian technology and supply chain diversification.
    • In this perspective, India and France must work together on International regulations for digital data, to ensure independence from both China and the US
  • The convergence in case of Afghanistan terror issue, France emerging as a mediator between USA and Iran, India’s commitment to Digital partnerships with France under Start Up India, all indicate the growing closeness between two nations, which need to be capitalised on in the coming years
  • As with the ISA, France and India can spearhead the development of multilateral initiatives which accommodate the voices of those who are most at risk.
    • The ISA can move to provide incentives for Low Income countries, by leveraging finances to fund renewable energy projects
    • Also, India and France can work towards creating a financial mechanism within the ISA and develop action-oriented and need-based multilateral initiatives to tackle climate change

Conclusion

• France is a crucial partner for India, and needs to play a key role in terms of India’s strategy in the Indo-Pacific, honouring climate commitments, combatting challenges to the global tech order and rebuilding resilience in multilateralism.
• By reinforcing shared values and commitments to these challenges, the France-India partnership can be taken to a new level this decade.

Snapshot of relations

• Bilateral relations between India and Germany are founded on common democratic principles and are marked by a high degree of trust and mutual respect
• India and Germany have a “Strategic Partnership” since 2001, which has been further strengthened with the Inter-Governmental Consultations (IGC) at the level of Head of Governments (German Chancellor and PM) which allows for a comprehensive review of Cooperation and identification of new areas of engagement

Areas and Instruments of Cooperation

• Political Cooperation
  • Parliamentary Exchanges
    • There is an Indo-German Parliamentary Friendship Group, in the German Bundestag since 1971.
    • The Indo-German Parliamentary Friendship Group (constituted in May 2018) for the present term of German Parliament consists of 24 Members from all the six parties represented in the German Parliament. Visit by Parliamentarians from both sides take place regularly
  • Institutional Arrangements
    • Several institutionalized arrangements exist between India and Germany, to discuss bilateral and global issues of interest namely, Foreign Office Consultations, High Defence Committee, Indo-German Energy Forum, Indo-German Environment Forum, S&T Committee, and Joint Working Groups in various fields, including skill development, automotive, agriculture, coal, tourism, water and waste management
    • Both countries consult each other and coordinate positions in multilateral forum, including G-20 and in the UN on global issues such as climate change, sustainable development, etc.
    • India-Germany meet on the side lines of G-4 as well, to discuss on important issues

• • • There have been consultations between the two countries on regional and international issues such as UN issues, International Cyber Issues, Disarmament & Non-proliferation, Export Control, East Asia, Eurasia, Africa etc.

• • Defence Cooperation
    • India-Germany Defence Cooperation Agreement (2006) provides a framework for bilateral defence cooperation.
    • To further enhance the Defence Industry and defence cooperation between Germany and India, an Arrangement on Implementation of the Agreement, concerning Bilateral Defence Cooperation was signed on February 12, 2019 during the visit of Raksha Mantri to Berlin
      • The agreement will enable both the countries to share classified information with each other
    • India and Germany maintain an ongoing dialogue in the areas of commercial maritime security and cooperation in the field of anti-terrorism
    • Recently, The Indian Navy and the German Navy carried out a joint exercise in the Gulf of Aden near Yemen, in the Indian Ocean leg of Indo-Pacific Deployment 2021. The Indian Navy was represented by frigate “Trikand” while the German Navy was represented by frigate “Bayern”.

• • Economic & Commercial Relations
    • Germany is India’s largest trading partner in Europe, with a total trade of USD 21.07 Billion in 2020-21, occupying 17.4% of share in European Market
    • Germany is the 7th largest foreign direct investor in India since April 2000
      • Germany’s total FDI in India from 2000 until 2019 amounted to US$ 11.9 billion
    • In 2021 India imported €946M and exported €944M from Germany, resulting in a negative trade balance of €1.8M

• • • • The top imports of India from Germany were Measuring and Automated control instruments (€74.3M), Other machinery (€71.5M), Machinery for electricity production, distribution (€65.4M), Aircraft (€57.9M), and Other prefabricated chemicals (€55.7M)
      • The top exports of India to Germany were Other prefabricated chemicals (€53M), Basic pharmaceutical products (€46.6M), Apparel of knitted or crocheted fabrics… (€43.2M), Chassis, bodies, engines etc. for motor… (€41.3M), and Other textile products (€36.8M).

• • • For facilitating trade, a Fast-Track System for German companies has been operating in Department for Promotion of Industry and Internal Trade (DPIIT) since March 2016
    • India and Germany signed a Joint Statement in 2019 to set up a Fast-Track system for Indian Companies in Germany
    • To facilitate the entry of German Mittelstand (Medium Sized Companies) in India, the Embassy of India, Berlin runs the Make in India Mittelstand (MIIM) Programme since 2015.

• • • In future, Germany’s role in reviving the India-EU free trade talks i.e Bilateral Trade and Investment Agreement (BTIA) will be very crucial.
      • Also, Germany has also agreed to intensify efforts for an early conclusion of an Investment protection agreement between the EU and India.

• • Science & Technology
    • Indo-German Science & Technology cooperation started with the signing of the Intergovernmental S&T Cooperation Agreement in 1971 and 1974
    • There are more than 150 joint S&T research projects and 70 direct partnerships between Universities of both countries.
      • India’s scientific establishments have close partnerships with German R&D institutions, including the Max Planck Society, Fraunhofer Laboratories and the Alexander von Humboldt Foundation.
    • Recently, Germany has announced new development commitments to the tune of more than EUR 1.2 billion (approx. INR 10,025 crore) to aid India’s fight against climate change and for cooperation on clean energy

• • Culture
    • India and Germany have a long tradition of academic and cultural exchange
      • Max Mueller was the first scholar of Indo-European languages to translate and publish the Upanishads and the Rigveda.
      • German interest in the Indian philosophy and languages resulted in the setting up of the first Chair of Indology at the University of Bonn in 1818.
      • The Government of India has funded 31 short term rotating chairs of Indian studies in German Universities so far
    • There has been growing interest in Germany in Indian dance, music and literature, as well as motion picture and TV industry
      • Indian films and artists regularly feature at the Berlin International Film Festival and at Indian Film festivals held in other parts of Germany

• • Development Cooperation
    • Germany has been an important development cooperation partner for several decades
      • Energy, sustainable economic development and environment & management of natural resources are priority areas
    • Financial assistance from Germany is mainly as soft loan, composite loans or grants routed through German Government’s Development Bank
    • Major projects are in the sectors of energy (Renewables, Green Energy Corridor), Indo-German Solar Partnership, Skill Development and Sustainable urban development (water/sanitation/waste, climate friendly urban mobility, smart cities).
    • Germany supports India’s reform policies geared towards inclusive, regionally and socially balanced growth.
      • As concrete steps in this direction Germany, in collaboration with Indian partner institutions, is actively supporting development and strengthening of financial systems in rural areas, social policy instruments especially for the unorganised sector, and promotion of small and medium-sized enterprises as well as microfinance institutions.
      • In this framework, the German development cooperation is actively supporting the reform of rural cooperative banks implemented by the National Bank for Agriculture and Rural Development (NABARD).
      • It is also providing support for many aspects of promotion of small and medium enterprises (SMEs) in collaboration with the Small Industries Development Bank of India (SIDBI).

Challenges/Roadblocks

• • Historical
    • Earlier, Cold War politics, as well as the lack of development in India caused German governments to treat the world’s largest democracy with indifference for many years
  • Political
    • Since 2000, India has not been very dependent on extensive relations with Germany, as the former Soviet Union dominated Indian bilateral relations to a large extent
    • As the world changed in the early 1990s, India reacted promptly and adapted well to the new situation, whereas Germany did not realize the opportunities vested in trade, science and technology and defence cooperation with India, and instead concentrated on the People’s Republic of China.
    • The relation between Germany and India as a whole are somewhat dysfunctional and unable to move forward
      • Core documents overtly focus on close economic relations; while cooperation in other fields offer little more than a forum for the exchange of ideas and best practices rather than focussing on substance
    • Also, India has “flown” under the radar of many German politics
      • What is mostly amiss is a continuous strategic interaction at various levels, states, civil society, parliamentarians
    • Also, Germany is expressed concerns about Kashmir lockdown and the rights of minorities in India and has begun to cast a shadow over the “shared political values” (freedom and the rights of minorities) with India

• • Economical
    • Further, Germany and European Union are sceptical about India’s trade liberalization measures, as Germany and EU bat for more liberal labour regulations
    • India had recently celebrated remarkable improvements in the ease of doing business, indicating its willingness to remove bureaucratic hurdles. However, technical regulations in trade like testing requirement are real burden for German Companies

India-Germany: The Future Ahead

• • Presently, the Indo-German partnership somehow seems to lack the momentum to leap forward
    • It’s been on a springboard for a while, and has much potential to fulfil.
    • In the current period, some reengagement appears necessary. In this context, if some big ideas, which emerged between India and Germany, were to be successfully implemented, it could perhaps create a wider and deeper paradigm of Indo-German partnership.
  • Collaboration in High Speed Railways(HSR)
    • German technology is acceptable in India, its companies are well known, and there is no apparent commitment to use only Japanese technology for all HSR in India.
    • If the German proposal succeeds in a cost-effective manner, it could open business opportunities in six more HSR projects in India
  • Efforts towards making Germany a reliable Defence Industry Partner
    • German Howaldtswerke-Deutsche Werft (HDW) submarines are in India.
    • Now Germany remains keen to provide the six API submarines required by the Indian navy. ThyssenKrupp Marine Systems is leading the German thrust to enhance the Indo-German partnership in defence production
    • The Indian Defence Ministry needs to consider this proposal, to further add considerable momentum to Indo-German relationship
  • Towards Multi-Polar World order
    • Amidst the policy uncertainties of USA, and the regional dominance of China, both India and Germany could coordinate towards a win-win situation
    • Also, Post Brexit, Germany is an important player in European Union. Therefore, engaging Germany is not just about India’s bilateral relations with it. It is about collaborating with the Germany led EU as a whole