EU India Virtual Summit 2020: Beating around the bush

The outcome of 15th EU-India Summit was as unremarkable as that of the first summit in June 2000

Last week has seen yet another EU-India Summit come and go. As in the past two decades, the meet was noticeable only for the absence of any real meat on the table.

The EU-India Summit on July 15 that saw Indian Prime Minister Narendra Modi get together, digitally, with European Commission President Ursula von der Leyen and EU Council President Charles Michel was yet another missed opportunity.

The joint statement put out at the end of summit paints an accurate picture of how the summit managed to entirely skirt the painful but important discussions on the main pillars of the relationship, trade and free movement of persons. Instead, the statement is as full of platitudes such as multilateralism, strategic partnership and what not.

It has been now 20 years since the two sides held their first summit in June 2000 in Portuguese capital Lisbon and where great (and almost certainly genuine) hopes had expressed about harnessing the true potential of the trade relationship between the EU and India. Twenty years on, India’s share in EU’s trade remains an ignominious 1.9 pc well below EU’s key trading partners like US (15 pc) and China (14 pc).

Cert that the EU is India’s second largest trading partner, just behind the US, with about 11 pc of the share of total Indian external trade. But both sides realise and have declared for decades that the trade could be of an entirely different order and that’s the reason that both the sides have been pursuing a bilateral Free Trade Agreement since 2007, when the leaders had boldly, definitely too boldly, set a deadline of 2012 for conclusion of the deal.

Since then, the two sides have done little more than push the ball in each other’s court or entirely shift goalposts. When they ran out of bureaucratic machinations, they renamed the elusive agreement to Bilateral Trade and Investment Agreement, just as any struggling Indian businessman with strong beliefs in astrology would change his name, hoping it would change his fortunes.

But alas, astrology is a tricky customer and as with most Indian businessmen, the EU and India are now stuck with a new name but the Dame Fortune has sternly refused to give her blessings to any progress on this highly divisive and embarrassing issue for diplomats and politicians on both the sides.

The two would have done better had they gone about resolving the deadlock by doing what any smart businessman would have done – negotiate. And negotiate with the objective to reach an agreement that both sides can not only live with and also sell to their people back home.

And for that to happen, both the sides, but especially the EU needs to realise that a negotiation necessarily involves give and take. So far, the EU’s position has been take and take, while trying to bind India into a long-term deal which would open the lucrative Indian market to the EU, while leaving Indian companies struggling to meet the various non-tariff barriers that the EU has become such an expert in placing regularly in the path of Indian exports to the EU.

For example, the EU wants India to fully liberalise its automobile market and slash to near zero import duties on liquors and spirits. It also wants India to slash duties on a wide variety of goods in the EU exports basket. Another key demand is about changing Indian rules on cross-border capital flows. And the EU also wants greater access to Indian food market, with the objective of feeding cheeses, meats, fruits and various other delicacies from across the European Union to hundreds of millions of Indian palates.

While seeking all this and more from India, the EU has not agreed to key Indian demands, including allowing more Indian farm exports to the EU, which are regularly hampered by various NTBs and sometimes genuine issues with the quality of food and high levels of chemical pesticides used by many Indian farmers. There have been hundreds of cases of Indian food products getting rejected at the EU borders on these sometimes real and often fictitious grounds. The fate of Indian pharmaceutical products, especially generic medicines, is no better.

The other major demand, perhaps even more important for India in the long term, is for free movement of people between India and the EU. Though this is a key element of the stalled negotiations at the World Trade Organisation, which is itself in its death throes, the EU has been stalling any progress on this subject with a variety of lame excuses such as the issue being the responsibility of each member State rather than for Brussels to take the call. The EU faces a severe shortage of skilled workers in practically all domains and stands to benefit tremendously from an agreement with India that lets the EU companies select well-skilled workers from India who can then find work anywhere in the Union. But political pressures back home would perhaps make this a difficult sell, especially at a time when there has been a strong backlash against migration in practically all EU nations.

Yet, important deals come with tough issues and the EU needs to show to India that it is willing to go for a real win-win deal on trade and movement of people.

Besides trade, there has been some criticism in the media about the Europeans not taking a position on China, something that the Indians had been pushing hard to be included in the meeting. But it did seem as immature for Indian diplomats to expect the entire world to frame and realign its foreign policy on the basis of Indian wishes. China is an important partner of the EU and carries much more weight than India across all aspects of its relationship with the EU.

Though there have been increasing criticisms of China, noticeably over the coronavirus pandemic, the EU is definitely nowhere near ready to really upset the Dragon. This was pretty much clear from the post-Summit press briefing by Charles Michels who did emphasise the importance of China to the EU. Moreover, there is little certainty that Indian leadership would not once again reach out to Chinese President Xi Jinping and solicit peace as had been done in Wuhan two years ago.

The one place where EU and India can pat themselves on the back heavily is the cooperation in areas like education, skills and civil society. These and other fields have seen a whole lot of progress over the past two decades. But, it’s time that the two sides took up the real issues that separate rather than unite the world’s largest democracies and build a real relationship with real gains for all.