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EU - India relations - background

21 June 2010
by eub2 -- last modified 21 June 2010

EU-India relations date back to the early 1960s when diplomatic relations were established. It was however the 1994 Cooperation Agreement (which is still the current legal framework for cooperation) that opened the door to the broad political dialogue that has since evolved, notably through annual Summits since 2000, and through regular ministerial and expert-level meetings.


1.    Introduction

EU-India relations date back to the early 1960s when diplomatic relations were established. It was however the 1994 Cooperation Agreement (which is still the current legal framework for cooperation) that opened the door to the broad political dialogue that has since evolved, notably through annual Summits since 2000, and through regular ministerial and expert-level meetings.

In recognition of both sides' political and economic importance the EU-India Strategic Partnership was created in 2004 to enable the partners to better address complex international issues in the context of globalisation. To underpin the Strategic Partnership, leaders at the 2005 Summit adopted the EU-India Joint Action Plan (the 'JAP') which defined common objectives and proposed a wide range of supporting activities in the areas of political, economic, and development cooperation.

The Joint Action Plan was reviewed at the 2008 Summit which has since focused on promoting four priorities: peace and comprehensive security, sustainable development, research and technology, and people-to-people and cultural exchanges.

In 2006, the Summit endorsed a proposal to prepare for the negotiation of a Free Trade Agreement, negotiations for which are still under way.

2.    Political Cooperation

Political cooperation with India is embedded in an institutional framework that has continued to be strengthened in recent years. Annual Summits have delivered significant outcomes, not only on political issues but also in the areas of trade and investment, science and technology, and economic and development cooperation. In addition to the Summits, the political dialogue is reflected in a number of other forums which include regular Ministerial meetings, Senior Officials Meetings, meetings of Political and Geographical Directors, and the EU-India Security Dialogue.

Essential political themes in the relationship are the fight against terrorism (EU Coordinator de Kerchove visited India in October last year to explore possible bilateral cooperation; and in parallel a possible agreement between Europol and India), non-proliferation, crisis management, and in particular maritime security ("Atalanta"cooperation on anti-piracy), peace building and peace keeping and regional issues within the South Asian region (primarily a specific dialogue on Afghanistan and possibly on Sri Lanka).

Human rights issues are addressed in the EU-India Human Rights Dialogue held in Delhi on an annual basis.

3.    Economic and Trade Relations

The EU is India's most important trading partner. Trade in goods between both partners more than doubled from €25.6 billion in 2000 to € 61 billion in 2008, though there is still much potential for trade growth.

EU FDI inflow into India amounted to €0.9 billion in 2008. Many reputed European companies are investing in India in diverse areas such as energy, civil aviation, ports, Information Technology, automobiles, pharmaceutical, financial services and retail.

The EU is also becoming a prime destination for India's outward investment in sectors which include steel, pharmaceuticals, automobiles, IT and energy. In 2008, Indian investments into the EU reached €2.4 billion. EU Financial institutions and banks play a crucial role in funding most major European acquisition by Indian companies.

The completion of the FTA negotiations remains a strategic objective for both sides.

4.    Sectoral Dialogues and Exchanges

Joint Working Groups have been set up to facilitate exchanges on subjects as diverse as Agriculture, Telecommunications and Information Technology, Pharmaceuticals and Biotechnology, Food Processing, and Environment. A Joint Customs Cooperation Committee serves to strengthen dialogue on a wide range of issues in that field. The increased importance given to Climate Change mitigation and related cooperation activities was reflected when the 2008 Summit in Marseilles adopted a Joint Work Programme on Energy, Clean Development and Climate Change. Follow-up activities were confirmed at the Summit in November 2009, when the EU and India agreed to expedite cooperation activities on Climate Change mitigation, clean energy (clean coal technology, nuclear energy) energy efficiency and renewable energy (in particular solar energy).

Negotiations to secure the conclusion of an EU-India Maritime Agreement are ongoing, and a horizontal, EU-wide Civil Aviation Agreement was signed in 2008.

On the basis of a mandate granted to it in 2009 by the Member States, the European Commission is negotiating a civil nuclear energy (fission) research agreement with India. A separate agreement on nuclear fusion research cooperation was signed at the 2009 Summit.

Migration is becoming an increasingly important subject in the relationship and is covered through regular meetings in Delhi of the EU-India Working Group on Visa and Consular Issues. Ways to strengthen cooperation on migration related issues are being explored.

5. Scientific Cooperation

Research cooperation between the EU and India started in the mid-1980s and the first EU-India Science and Technology (S&T) Agreement was signed in 2001 and extended in 2009.

India has become the fourth largest international partner for the EU under the 7th (2007-2013) EU Framework Programme for Science and Technological development (FP7). Indian organisations are participating in research projects in various technological areas of which health, environment, food agriculture biotechnologies and ICT are the most prominent. India has become a full partner in the International Thermonuclear Experimental Reactor (ITER) nuclear fusion project.

A Joint EU-India Call for Proposals on Solar Energy Research was launched in 2009 with €5 million contributions from each side.

6. The EU-India Cooperation Programme under the Development Cooperation Instrument

The main objectives of the EU-India Cooperation Programme are to contribute towards India's achievement of the Millennium Development Goals (MDGs) and to provide support for the implementation of the EU-India Joint Action Plan (JAP).

The first Multi-annual Indicative Programme (MIP) under the 2007-2013 planning period allocated a total of €260 million for the above activities over the four years from 2007-2010.

Following a Mid-term Review exercise conducted in 2009 the second MIP (2011-13) allocates an indicative total of €210 million to the same sectors as previously, but with an increased allocation for the social sectors.

7. Preparatory Actions

Financing under the Community budget for 'Preparatory Actions' in India was introduced by the European Parliament in 2007 to promote EU interests in business and research exchanges. Under the Preparatory Action for India, a European Business and Technology Centre (EBTC) has been established in New Delhi as a one-stop shop to provide EU companies with information on rules, regulations, standards, key market barriers, and general trade and investment-related matters. The EBTC will also promote the establishment of research networks between Europe and India and will support EU-India dialogues in various sectors.

The Centre is focusing primarily on energy, transport, the environment and biotech, promoting climate change as a general cross-cutting issue, and sustainable technologies in which Europe has considerable experience. The EBTC office is located in New Delhi but three regional centres in Mumbai, Kolkata and Bangalore will open later this year.

Source: European Commission