India-EU relations are gaining renewed momentum in the backdrop of shifting global power dynamics and strategic uncertainties. Critically analyze the areas of cooperation and challenges in the India-EU relationship. Suggest measures to enhance this partnership in a multipolar world.                                       (250 words)

The India-EU relationship is undergoing a strategic recalibration, spurred by global realignments, including the rise of China, U.S.-Russia tensions, and Europe’s pursuit of strategic autonomy post-Trump era. Recent developments, such as External Affairs Minister S. Jaishankar’s Europe visit and PM Modi’s participation in the G7 Summit, underscore India’s efforts to deepen engagement with Europe.

Areas of Cooperation (India-EU relationship):

1. Economic Cooperation:
   1. The EU is India’s 3rd largest trading partner, with bilateral trade reaching €88 billion in 2021.
   1. EU investments in India rose from €63.7 billion (2017) to €87.3 billion (2020).
   1. Indian companies like Tata Group have significant presence in EU markets.
2. Strategic and Political Engagement:
   1. India-EU Strategic Partnership (2004) involves dialogue on counter-terrorism, cyber security, and non-proliferation.
   1. The India-EU Trade and Technology Council (TTC) launched in 2023 promotes cooperation on supply chains, digital governance, and green transitions.
3. Infrastructure and Connectivity:
   1. India is a key player in the India-Middle East-Europe Economic Corridor (IMEC), providing an alternative to China’s BRI.
4. Research and Innovation:
   1. Joint collaboration under Horizon 2020 and student exchanges via Erasmus+ foster knowledge sharing.
5. Multilateral Cooperation:
   1. India and the EU align on global governance issues, engaging in forums like UN, G20, and WTO.

Challenges in India-EU Relations:

1. Trade and Market Access: The stalled India-EU Free Trade Agreement (FTA) faces hurdles over tariff barriers, especially on automobiles and pharmaceuticals.
2. Intellectual Property Rights: The EU has criticized India’s compulsory licensing practices (e.g., cancer drug Nexavar case).
3. Human Rights and Governance: The EU has raised concerns over CAA 2019, religious freedom, and treatment of minorities.
4. Climate Change Differentiation: Disagreements persist over climate responsibilities, financing, and carbon border taxes.
5. Geopolitical Divergences: Contrasting views on Middle East, Ukraine, and China occasionally create friction.

Way Forward:

1. Reviving FTA Negotiations:
   1. Addressing regulatory barriers and finding common ground on digital trade and services.
2. Deepening Strategic Cooperation:
   1. Enhance collaboration on counter-terrorism, cyber security, and defence technology.
3. Leveraging Multilateral Platforms:
   1. Jointly advocate reforms in global institutions like WTO and UNSC to reflect contemporary realities.
4. Strengthening People-to-People Ties:
   1. Expand academic, cultural, and youth exchanges to build long-term understanding.
5. Sustainable Development Collaboration:
   1. Joint work on green technologies, clean energy, and climate finance under a just transition framework.

Conclusion:

India-EU ties have the potential to become a pillar of the emerging multipolar world order. As the EU recalibrates its global posture and India asserts its strategic autonomy, both can benefit from a pragmatic, multifaceted partnership. A balanced, rules-based engagement can help navigate the shared challenges of the 21st century.

‘+1’ Value addition:

• EU-India Bilateral Trade in Services increased by 48% between 2019 and 2022.
• Foreign Direct Investment (FDI) inflows from the EU to India, one of the largest sources, is valued at USD 107.27 Bn.
• In 2024, India and the European Free Trade Association (EFTA) signed a Trade and Economic Partnership Agreement (TEPA) with 4 European states- Iceland, Liechtenstein, Norway and Switzerland.
• The EU’s CBAM will impose additional 25% tax on energy-intensive goods exported from India to the EU, impacting 0.05% of India’s GDP as per CSE.

https://indianexpress.com/article/cities/ahmedabad/india-eu-free-trade-agreement-end-year-finnish-envoy-10058156

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