NEW DELHI – The recent Indian-Italian bilateral dialogue, held in Milan on November 7, at a time when Italy was reeling from the euro crisis and Silvio Berlusconi’s impending political demise, offered a fraught reminder of the potential, and the limits, of India’s relationship with the European Union.
India has a long history of relations with Europe, going back to the days of the Roman Empire. Its southwestern state of Kerala boasted a Roman port, Muziris, centuries before Jesus Christ was born; excavations are now revealing even more about its reach and influence.
The discovery of ancient amphorae has confirmed that India used to import products such as olive oil, wine, and glass from Italy, in exchange for exotic items like ivory and spices. Interestingly, an ivory statue of the Hindu goddess Lakshmi, dating back to the first century BC, was found during excavations of the ruins of Pompeii in southern Italy.
After languishing for centuries, trade is once more shaping the relationship between these two world regions. The EU is India’s second-largest trading partner, with turnover reaching €68 billion ($93.5 billion) in 2010, accounting for 20% of India’s global trade. Exports of services from Europe to India are worth €10 billion, while services imports are valued at a little more than €8 billion.
India has a several affinities with the EU, not least that it, too, is an economic and political union of linguistically, culturally, and ethnically different states. But, in practice, these affinities have not translated into close political or strategic relations.
In 1963, India was one of the first countries to establish diplomatic relations with the European Economic Community (the predecessor to today’s EU), and the India-EU Strategic Partnership and Joint Action Plan of 2005 and 2008 offer a framework for security cooperation. But it will take time for the EU to develop a common strategic culture. The EU member states must develop a collective approach to national-security problems before meaningful strategic cooperation between the EU and India can occur.
Another important impediment to India-EU relations is that Indians don’t like anyone lecturing to them. One of the great failings in the EU-India partnership has been Europe’s tendency to preach to India on matters, such as human rights, that Indians believe they can handle on their own.
A democracy for more than six decades (longer than some EU member states), India regards human rights as a vital domestic issue. Neither Amnesty International, Human Rights Watch, nor any European institution has exposed a single human-rights problem in India that Indian citizens, journalists, and NGOs have not already revealed and handled within India’s democratic political space.
Given this, the EU’s effort to write human-rights provisions into a free-trade agreement with India, as if they were automobile-emissions standards, gets Indians’ backs up. Trade should not be held hostage to internal European politics about human-rights declarations. On the actual substance of human rights, India and the EU are on the same side and have the same aspirations. Once this irritant is overcome, negotiations over the free-trade agreement, which have long been in their “final” stages, can be concluded, and should transform trade.
There is also room for technological cooperation. India’s abundant and inexpensive scientific brainpower and its growing reputation for “frugal innovation” offer interesting potential synergies with Europe’s unmatched engineering capacity.
Of course, there are serious structural impediments. Ironically, despite its human-rights rhetoric, the EU has long favored China over India: for every euro that the EU invests in India, it invests €20 in China. Admittedly, this is partly India’s fault, because it has not created an equally congenial climate for foreign investment.
Another stumbling block is that India prefers bilateral arrangements with individual member states to dealing with the EU collectively. Arguably, this is necessary, given European institutions’ lack of cohesion on strategic questions. Since the Maastricht Treaty created the EU in 1992, Europe has claimed to have a “common foreign policy,” but it is not a “single” foreign policy. If it were, EU member states would not need two of the five permanent seats on the UN Security Council, and be clamoring for a third.
Yet the case for India-EU cooperation could not be stronger, since the bulk of the world’s problem areas lie between India and Europe (or, as Swedish Foreign Minister Carl Bildt once put it, between the Indus and the Nile).
The danger is that India could write off Europe as charming but irrelevant, a continent ideal for a summer holiday, not for serious business. The world will be poorer if the Old Continent and the rising new subcontinent fail to build on their shared democratic values and common interests to offer a genuine alternative to US-Chinese dominance.