India-EU Summit: Trade, defence and mobility deals on table

The upcoming India-EU Summit, marked by the significant gesture of hosting European Council President Antonio Costa and European Commission President Ursula von der Leyen as chief guests for India's Republic Day on January 26, underscores a crucial inflection point in India-EU relations. This high-level engagement, culminating in the summit on January 27, signifies a mutual commitment to deepening strategic ties across critical sectors such as trade, defence, and mobility.

**Background Context and Historical Trajectory:**

India and the European Union established a 'Strategic Partnership' in 2004, recognizing their shared democratic values, commitment to multilateralism, and economic complementarities. The EU has historically been one of India's largest trading partners and a significant source of Foreign Direct Investment (FDI). However, despite the strategic partnership, the relationship often felt underleveraged. Early attempts at a comprehensive Free Trade Agreement (FTA), known as the Bilateral Trade and Investment Agreement (BTIA), initiated in 2007, faced numerous hurdles and were suspended in 2013 due to divergence on critical issues like market access, intellectual property rights, and data security. The geopolitical landscape, particularly the rise of China, the COVID-19 pandemic's impact on supply chains, and the need for diversification, provided fresh impetus. A major turning point came with the India-EU Leaders' Meeting in Porto, Portugal, in May 2021, where both sides agreed to resume FTA negotiations and launch a connectivity partnership. This was further solidified with the establishment of the India-EU Trade and Technology Council (TTC) in April 2022, a first for India with any partner and only the second for the EU (after the US), highlighting a shared vision for resilient supply chains and technological cooperation.

**What Happened and Key Stakeholders:**

The presence of the European Council President and European Commission President as Republic Day chief guests is a powerful diplomatic signal, showcasing the EU's importance to India and vice versa. The European Council, comprising heads of state or government of EU member states, defines the EU's overall political direction and priorities, while the European Commission is the EU's executive arm, responsible for proposing legislation, implementing decisions, upholding EU treaties, and managing the EU's day-to-day business, including trade negotiations. These leaders represent the collective political will and executive power of the 27-member bloc. On the Indian side, key stakeholders include the Ministry of External Affairs, the Ministry of Commerce and Industry, and the Ministry of Defence, all working under the overarching guidance of the Prime Minister's Office.

**Significance for India:**

This summit holds immense significance for India. Economically, the EU is India's third-largest trading partner, with bilateral trade exceeding $116 billion in 2022-23. The ongoing FTA negotiations aim to boost this significantly by reducing tariffs and non-tariff barriers, potentially unlocking new market access for Indian goods and services. This aligns with India's broader economic strategy of diversifying trade partners and integrating into global value chains, crucial for achieving its 'Atmanirbhar Bharat' (self-reliant India) goals. Politically and strategically, enhanced cooperation with the EU, a bloc of democratic nations, strengthens India's multilateral diplomacy and provides a counterweight to rising geopolitical complexities, particularly in the Indo-Pacific region. The EU's own Indo-Pacific strategy largely converges with India's vision of a free, open, and inclusive region. Defence cooperation, including potential co-development and co-production of military hardware, could bolster India's defence manufacturing capabilities, aligning with the 'Make in India' initiative in defence. Furthermore, agreements on mobility are vital for India's highly skilled workforce, facilitating the movement of professionals, students, and researchers, fostering people-to-people ties, and addressing potential labour shortages in EU member states.

**Broader Themes and Constitutional Linkages:**

India's engagement with the EU resonates with core principles enshrined in its Constitution. Article 51, a Directive Principle of State Policy, mandates the State to 'endeavour to promote international peace and security; maintain just and honourable relations between nations; foster respect for international law and treaty obligations... and encourage settlement of international disputes by arbitration.' India's proactive foreign policy, including its engagement with major blocs like the EU, directly stems from this constitutional directive. Economically, the summit's focus on trade and investment directly supports the government's Foreign Trade Policy and initiatives like 'Make in India,' aimed at boosting manufacturing and exports. Enhanced defence cooperation supports the Defence Procurement Procedure and the broader vision of achieving self-reliance in defence production.

**Future Implications:**

Successful outcomes from this summit, particularly progress on the FTA, could significantly reshape India's economic landscape, attracting more FDI and creating employment opportunities. Deeper defence ties could lead to technology transfer and joint ventures, reducing India's reliance on a single source for military equipment. The mobility agreements could streamline visa processes and recognition of professional qualifications, benefiting Indian diaspora and addressing skilled labour demands in Europe. This strengthened partnership is poised to elevate India's global standing, making it a more influential player in global governance, climate action, and digital transformation. The India-EU relationship, moving beyond traditional trade, is evolving into a comprehensive strategic partnership crucial for navigating the challenges and opportunities of the 21st century.