India-EU Relations

The European Union (EU), with its fifteen member countries, constitutes the largest
economic entity of the world today. Austria, Belgium, Denmark, Finland, Germany,
Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Sweden and the United Kingdom are the present constituents of the grouping. Two
of its member states are permanent members of the UN Security Council, one more
is one of the strongest candidates for membership once the Council is expanded, four
are members of the G-8 and all are among the most advanced economies in the
world today.
India has traditionally had a multi-dimensional relationship with the EU which is our
largest trading partner, biggest source of foreign direct investment, major
contributor of developmental aid, important source of technology and home to a
large and influential Indian diaspora. India was one of the first Asian nations to
accord recognition to the European Community in 1962.Initially, our contacts with
the Community were limited to economic and commercial links since this was the
extent of the Communitys competence. As the Community evolved and took on a
political dimension as well, India decided to establish a closer political relationship
with it.

Accordingly, in 1983, it was agreed to formally institute the India-EC political

dialogue. There are several institutional mechanisms that foster India EU relations:
India-EU Summit Meeting, India-EU Troika Ministerial Meeting, Senior Official
Meetings, India-EC Joint Commission, India-EU Joint Working Group on
Terrorism, India-EU Joint Working Group on Consular Affairs, India EU Round Table
etc. EAM participated at the India EU annual troika ministerial talks in Madrid on
14th February 2002 which was held under the Spanish Presidency of the EU. The EU
side consisted of Spanish Foreign Minister Joseph Pique, EC High Representative Mr.
Xavier Solana and EC Commissioner for External Relations Mr. Chris Patten. EC
Commissioner for External Affairs Chris Patten visited New Delhi on 24th May 2002
and met with EAM and Principal Secretary to PM. This was followed by a visit by EU
High Representative Javier Solana on 26th July 2002. On both occasions bilateral
issues as well as regional and international issues of mutual concern were discussed.
There was a broad convergence of views that terrorism was a global phenomenon
and the need to dismantle infrastructure of cross border terrorism.
Interaction at the level of Parliament has picked up in the recent past. The South
Asia Delegation of the European Parliament, led by Mr. Gerard Collins, Chairman of
the Delegation, visited India on April 17-20, 2000. Indian Parliamentay group led by
PA Sangma in January visited European Parliament to sensitise the Members of the
European Parliament on terrorist attacks on Indian Parliament.
Summit Level Interaction : With the institutionalization of the Summit level
interaction since the first India-EU Summit in Lisbon bilateral relations have soared
to a higher level. Since the Lisbon Declaration there have been several new
initiatives demonstrating our determination to engage at all levels governmental
and non-governmental. The Joint Working Group on International Terrorism has
shown convergence of views on tackling the scourge of terrorism. The Joint Working
Group on Consular Affairs has shown our mutual desire to remove impediments in
the furtherance of business and people to people contacts. The Indo-EU Round Table

and the Think Tank Network which are part of the ongoing civil society dialogue
between India and the EU are complementary to our overall relationship. The Third
Meeting of India EU Round was held on 4-5 February 2002 in Jaipur where the role of
the media and human capital in enhancing civil society dialogue was discussed. The
recommendations of the RT have been submitted to the Heads of Government of
India and EU for consideration. India-EU Troika Senior Officials Meeting took place
on 2nd May 2002 in New Delhi. Former Foreign Secretary Mrs. Chokila Iyer led the
Indian side and Mr. Don Javier Garrigues, Secretary General of Foreign Office of
Spain led the EU side. India and EU committed themselves to continue the fight
against international terrorism and discussed developments in South Asia and
European Union. The fourth meeting of India EU JWG Consular Affairs was held on
22nd May 2002 in New Delhi under the Spanish Presidency. Problems of transit
visas instituted by EU countries following the 11th September terrorist attacks,
business visas, work permits and general consular problems such as driving licenses
and documentation were discussed during the meeting. The 12th India EU Joint
Economic Commission was held in Brussels on 10th July 2002. Both sides discussed
the problems of market access issues, GSP issues, Summit deliverables and reviewed
the progress of sub-commissions as well as Joint Working Groups.

The second Summit was held in New Delhi on 23rd November 2001, under the
Belgian Presidency. India was represented by Prime Minister Atal Behari Vajpayee
and the EU was represented by the Prime Minister of Belgium, Guy Verhofstadt, in
his capacity as President of the European Council and the President of the European
Commission,Romano Prodi. Indian Ministers Jaswant Singh (External Affairs), Murali
Manohar Joshi (Human Resource Development, Ocean Development and Science &
technology), Murasoli Maran (Commerce & Industry), as well as the Belgian Minister
of State Ms Anne-Mie Neyts-Uytterbroech (Foreign Affairs) and the European
Commissioner Pascal Lamy (Trade) participated in the Summit.

The Joint Communiqu that was adopted during the Summit reviewed the progress
since the Lisbon Declaration and outlined the future course of action. It incorporated
several issues of mutual interest; reiterated the commitment of India and the EU,
global actors in the multi-polar world, to further expand the relationship at all levels;
expressed support for the international coalition in the fight against terrorism
wherever it occurs and regardless of its motives; expressed support to the early
implementation of Comprehensive Convention on International Terrorism. On
Afghanistan, hope was expressed that afghan people would have a broad-based
multi-ethnic government which will respond to the needs and aspirations of the
afghan people. On the economic and development cooperation, there was
recognition for building mutual confidence and understanding. On WTO it expressed
satisfaction at the successful conclusion of the Fourth WTO Ministerial Conference
held at Doha, particularly its development and agenda. The Summit adopted the
declaration against international terrorism as a separate document. It underlined
the common commitment of India and the European Union to counter the great
threat faced by open democratic and multi-cultural societies. The declaration called
upon all states to cooperate in the fight against terrorism. The Declaration affirmed
that international terrorism is a threat to peace and security and called upon all
states for refraining from providing moral, material or diplomatic support to acts of
terrorism and from preventing the use of their territory for sponsoring terrorist acts
against other States. The Joint Vision Statement on Information Technology was

adopted and several useful agreements the Science & Technology and the Sarva
Shiksha Abhiyan on primary and secondary education in India with a contribution of
Euro 200 million were also signed.India-EU Business Summit that preceded the
political event was organised jointly by CII and FICCI in partnership with the
Department for Industrial Policy and Promotion of the Ministry of Commerce on 22nd
November 2001. Over 425 participants including high-level business participation
and business community from India and EU countries attended the event.
Biotechnology, food processing and pharmaceuticals, IT and telecommunications,
engineering and manufacturing and financial services and insurance were key areas
identified on which recommendations were made. Prime Minister in his keynote
address urged the EU to grant greater market access to Indian products and services
and welcomed useful sector specific reports emanating from the joint initiative to
enhance bilateral trade and investment flows. The next India-EU Business summit
will be held on 8-9 October 2002 in Copenhagen, before the political summit of the
Third India EU Summit in October 2002.
There has been acceptance that India-EU dialogue at the highest level should be
institutionalised on a regular basis. The next India-EU Summit would be held in
Copenhagen during the Danish Presidency of the EU on 10-11 October 2002.
The New Delhi Summit adopted a fresh 'Agenda for Action', with concrete objectives
to be implemented in time for the 3rd Summit. 'Agenda for Action' pledges India and
EU to intensify the political dialogue in order to address the consequences of the
terrorist attacks of 11th September and reiterates the commitment of both sides to
work together for early adoption and implementation of the Comprehensive
Convention on International Terrorism. It commits India and EU to deepen the
dialogue on economic and development cooperation through the India-EC Joint
Commission, which will examine the recommendations of the Business Summit in the
framework of "India-EU Joint Initiative for Enhancing Trade and Investment".

Economic relations:The EU is Indias largest trading partner with a steady growth in

volume and diversity since 1993, with a third of Indian exports reaching EU
destinations. Bilateral trade was approximately Euro 25.02 billion in 2001. It
accounts for 26% of our exports and 25% of our imports. India is the EUs 17th
largest supplier and 20th largest destination of exports. However, its EU market
share in 2001 was about 1.3%. India's strength still lies in its traditional exports like
textiles, agricultural and marine products, gems and jewellery, leather, and
engineering and electronics products. Some sectors like chemicals, carpets, granites
and electronics have shown the fastest growth in the last five years. Indian imports
have been dominated by gems & jewellery, engineering goods and chemicals &
minerals. The EU is one of the major sources of foreign direct investment for India,
with countries like the UK, Germany France, Belgium, Italy and the Netherlands
accounting for a large proportion of the investment. FDI flows from EU to India
amounted to Euro 1.1 billion in 1999 while FDI from India to EU was Euro 69 million.
The pattern of EU investment has shifted towards the infrastructure, mainly power
and telecommunications. The EU has a substantial stake in the industrial machinery,
transport, electrical and electronics, textiles, chemicals and consultancy sectors.
Development Co-operation:

The European Commission has a large number of development programmes, with

education, health and environment as priority sectors. The main objective is to
enhance human development by providing assistance for projects which benefit the
economically weaker and deprived sections of the society. The EU has moved from a
project-based approach to a programme-specific one. There is potential for
diversifying into new areas such as drinking water supply, particularly in rural areas,
watershed development, housing, sanitation, slum improvement etc. The combined
contribution of the EU member states and the EC accounted for almost 27% of the
total aid flow into India over the last five years. At present, 15 EC funded projects
are operational in the health, education, environment and other sectors. While EU
countries together contribute a large chunk of bilateral aid, only 10-15% of this aid
comes from EC budgetary funds. The EC has individually contributed about ECU 2
billion over the last 20 years in grants-in-aid for developmental projects. The EU
member countries individually contributed a total of $ 56 million worth of money,
material
and
men
as
relief
assistance
in
the
wake
of
the Gujarat earthquake in January 2001 (EC alone gave a grant of Euro 13 million).
At the Second India EU summit on 23rd November, the Financing Agreement for
universalising elementary education /primary education project Sarva Siksha
Abiyan with a contribution of Euro 200 million was signed.
India-EU Round Table:

In view of the existence of vibrant, dynamic and multifaceted civil societies on both
sides, civil societies dialogue has become an important dimension of India EU
relations. Following a decision taken by EAM and EC External Relations
Commissioner Chris Patten in December 1999, the India-EU Round Table was
launched during Commissioner Pattens visit to India January 29th 2001. The two
co-Chairpersons are Mr. N.N. Vohra, Director, India International Centre and Mr.
Goke Frerichs, President of the Economic & Social Committee. The Round Table is a
distinguished non-governmental forum of eminent personalities drawn from the fields
of business and industry, academics, media, NGOs etc. who would share their
experiences and perceptions on global issues of mutual interest and identify
measures to strengthen and diversify the relationship between India and the
European Union. The 3rd meeting of the India-EU Round Table was held on 4th 5th
February 2002 in Jaipur. The two Co-Chairmen Mr. NN Vohra and Mr. Goke Frerichs
in their opening remarks condemned the 13th December terrorists attack on Indian
Parliament. The meeting led to a useful discussion on the selected topics The role
of media in promoting and strengthening civil society linkages and The
development of human capital, specially focusing on the migration of highly skilled
persons. Recommendations of the Third Round have been submitted for
implementation to the Heads of Government of both India and the EU. The Fourth
meeting is scheduled to take place on 12-13 September 2002 at Cascais, Portugal.
The identified topics for discussion are (a) Cooperation in the field of food and
agriculture business between India and EU and (b) Investment promotion in the
context of the WTO trade negotiations.