Skip to content
Home » General Studies » India-EU Relations

India-EU Relations

A high-level meeting between the EU Trade Commissioner and India’s Commerce and Industry Minister outlined a six-point roadmap to enhance cooperation between India and the European Union.

The partnership focuses on democracy, economic integration, sustainable trade, technology collaboration, security, and connectivity, addressing challenges such as trade diversification, regulatory barriers, and Free Trade Agreement (FTA) negotiations.

6-Point Roadmap For India-EU Cooperation

  1. Common Values: Strengthening democracy, rule of law, and economic development through deeper market integration.
  2. Quality Production: Enhancing standards and best practices in Indian industries under the Zero Defect Zero Effect principle.
  3. Sustainable Development: Promoting fair trade with sustainability principles based on the Common But Differentiated Responsibility (CBDR) framework.
  4. Trade Agenda: Addressing tariff and non-tariff barriers to ensure a fair and equitable trade framework.
  5. Technology and Supply Chain Resilience: Ensuring critical raw material supply security and reducing dependencies on non-market economies.
  6. People Ties: Strengthening educational and research collaborations to enhance skilled workforce exchanges.

Historical Relations

  • India established diplomatic relations with the European Economic Community in 1962.
  • The 5th India-EU Summit (2004) in The Hague upgraded the relationship to a Strategic Partnership.

Trade Partnership

  • The EU is India’s largest trading partner and accounts for 12.2% of India’s total trade in 2023, surpassing the U.S. and China.
  • India is the EU’s 9th-largest trading partner, maintaining a trade surplus with the bloc.
  • Trade in goods increased by 90% in the last decade, and services trade grew by 96% from 2020 to 2023.
  • Foreign Direct Investment (FDI) from the EU significantly contributes to India’s industrial growth, job creation, and technology transfer.

Strategic Alignment

  • India and the EU share common interests in security, renewable energy, climate action, and multilateralism.
  • Bilateral dialogues exist on counterterrorism, cybersecurity, migration, maritime security, human rights, and non-proliferation.
  • The EU’s Indo-Pacific Strategy aligns with India’s role in ensuring regional security.
  • Both are committed to reforming multilateral institutions like the WTO, UN Security Council, and G20.

Energy And Climate Cooperation

  • India-EU Clean Energy and Climate Partnership (2016): Strengthens collaboration on renewable energy and the Paris Agreement.
  • EU-India Green Hydrogen Partnership: Supports policy frameworks and pilot projects in clean energy.
  • Sustainable Consumption & Production (SWITCH-Asia Programme): Encourages eco-friendly manufacturing and waste management.

Technology And Infrastructure Collaboration

  • India-EU Trade and Technology Council (TTC): Focuses on semiconductors, AI, and clean energy technologies.
  • India-Middle East-Europe Economic Corridor (IMEC): Aims to boost global trade routes and energy security.
  • EU-India cooperation in fintech and digital payments is expanding to enable cross-border transactions.

Security and Defense Cooperation

  • EU deploying a liaison officer at India’s Information Fusion Centre in Gurugram for maritime security.
  • Joint military exercises and counterterrorism collaborations are under discussion.
  • The EU’s Enhancing Security Cooperation in and with Asia (ESIWA) initiative strengthens security ties with India.

Key Challenges In India-EU Relations

  • Trade Diversification: Only 20 product categories contribute 90% of total EU goods exports to India.
  • EU’s Import Dependence on China: India’s share in the EU’s import basket has stagnated since 2010, whereas China’s share has grown.
  • FTA Negotiation Delays: Disputes over digital regulations, investment protection, and dispute resolution mechanisms have prolonged talks.
  • Carbon Border Adjustment Mechanism (CBAM): EU-imposed taxes on energy-intensive goods could impact 0.05% of India’s GDP.
  • Labour and Environmental Standards: Divergences in labour laws, human rights policies, and environmental regulations hinder EU investments in India.

Way Forward

  • Fast-tracking the India-EU FTA: Formal re-negotiations on Free Trade, Investment Protection, and Geographical Indications Agreements launched in 2022.
  • Trade Reforms: Enhancing tariff predictability and harmonizing regulations for increased investments.
  • Green Cooperation: Strengthening collaborations in green transition goods and renewable energy.
  • Labour Policy: India continues to reform labour codes in alignment with international standards.

India-EU relations hold significant economic, technological, and strategic potential. By addressing key challenges and expediting agreements, both regions can benefit from a stronger, more resilient partnership.

Also Read

Key Pillars Of India-US Relations Across Sectors
India-Bangladesh Relations: Connectivity, Trade, And Diplomacy
International Laws vs. India’s Defence Export Policies
India’s Military Diplomacy