The increasing importance of India to Europe in a changing world order

By (Mrs) Amb Narinder Chauhan

Ursula Von der Leyen, the head of the European Commission visited India in April to sway India away from Russia following the latter’s war in Ukraine. She said the “no limits” partnership between China and Russia presented a threat to both India and Europe. She called upon India to align itself closer with the European Union (EU) as India attempts to balance its ties with Russia and the West. Speaking at the Raisina Dialogue, India’s largest annual think tank exercise on geopolitics and geoeconomics,she said that a closer relationship was in the strategic interests of India. Several other European leaders including from Sweden, Armenia, Luxembourg, Norway, Lithuania, Netherlands, Poland, Portugal, and Slovenia participated in the event.

India and Europe have a longstanding trade,investment, and technology relationship. In the year 2007 a Strategic Partnership was established between India and EU and a multifaceted Joint Action Plan was drawn up. Talks since 2007 for a comprehensive economic partnership stalled in 2013 due to differences on Intellectual Property Rights (IPR), duties on automobiles, spirits, and movement of professionals. As a result of Ursula’s visit, both sides are expected to resume negotiations on a free trade agreement in June 2022, with the aim of concluding it by 2023 or early 2024.

Ursula referred to the common values of democracy and rule of law, which she said were threatened by Russia and China. These comments were made in the backdrop of the war in Ukraine which, according to her, was affecting not only Europe but also the Indo Pacific, already visible through the rising cost of food and fertilizer.

Ursula. also criticised China’s debt trap policies which allows China control ports and vital infrastructure. This signals yet another shift by Europe, this one away from China. Instead, she advocated the EU’s Global gateway programme, which aims to invest Euro 300b in partner countries. She offered benefits from this fund to India in the realm of climate change, energy production, and digital technology.

In a joint statement during Ursula’s visit, India and the EU agreed that rapid changes in the geopolitical environment highlight the need for joint in-depth strategic engagement. It will, however, not be easy to put behind differences if the EU continues to rile India on issues such as human rights, environment etc. Further, at a time when India aims to engage in an active dialogue with the European Commission, European growth is slowing down as it faces large-scale migration, food insecurity, high inflation, fall in living standard etc.

Ursula’s visit was a broader western effort to encourage India to downgrade ties with Russia in response to its invasion of Ukraine. India has resisted condemning Russia’s war in Ukraine, instead calling for an immediate ceasefire and advocating peace talks. India abstained from a UNGA Resolution to suspend Russia from the UNHRC. India has also resisted western pressure to avoid buying oil from Russia, although it receives relatively little oil from Russia. India, on the other, is dependent on Russian weapons including recently purchased air defense systems. India’s relations with China have been frosty ever since the deadly 2020 border clash in Ladakh.

Immediately prior to Ursula’s visit, British PM Johnson visited India announcing a new defense and security partnership. He signaled the target of concluding a free trade deal by October 2022 and unveiled an expanded defense partnership that provides easier access to British military hardware and technology to India. Although ties with the UK are not easy  despite the presence of a large Indian diaspora, UK’s exit from EU provides India an opportunity to forge a standalone relationship not hamstrung by the slow-moving EU common foreign and defense policy with attendant restrictions.

The Indian PM’s visit soon after, in early May, to Europe, including a Summit with Nordic leaders of Denmark, Sweden, Norway, and Finland in Copenhagen, and to Germany and France, all important trade, and technological partners, has imparted fresh energy and momentum in India’s ties with the west. And it is happening when few expected this to happen. India has continued to maintain its position on the Ukrainian crisis even as the west continues to put pressure on India. India has been consistent in its advocacy of diplomacy and dialogue within the four corners of the UN Charter and international law. It has refrained from publicly condemning Russia though a clear disappointment can be discerned in India’s growing concern about the humanitarian crisis arising out of the Ukraine war.

As the Ukraine war prolongs, Europe is worried about maintaining its supplies and protecting its economies, especially since China’s role in this new order is not clear. A new global financial order is in the making with Russia linking its natural resources with ruble and gold to beat European and US sanctions. This poses a unique problem to Europe which is trying to work around its own sanctions!The US move to freeze foreign assets when it is running huge foreign debts not only calls into question its monetary policy but also serves to undermine the trust that has underpinned the international financial system. Other major players will not take kindly to it.

India sees an opportunity in this situation. Indian PM’s recent talks with leaders of Germany, France and Nordicscome at a time when the region is witnessing its worst geopolitical and geo economics crisis since WWII. The US and EU have imposed harsh sanctions against Russia to deter it from escalating the crisis, but the sanctions have not proven to be a deterrent as the war has been ongoing for two months now. Russia started the war and looks like it will end it on its own terms, whatever the collateral damage. A protracted war is to Russia’s benefit as it gets time to reboot itself and as it fades away from people’s minds as did Syria. As the refugees pour into Europe and the US, the world has started drawing parallels with the US’s own wars

The renewed interest of the western world is indicative of a shift towards India and the larger South Asia, as all the major powers including US, Germany and France are reshaping their Indo-pacific engagements,and away from China to counter its Belt and Road project. While there is still some scope of economic expansion in China it is difficult for western firms to compete on what they see as unfair terms with state owned firms. As a result, many western firms that are still in China are keeping one leg there and another leg in South Asian countries, it is not so much about building markets as safeguarding markets and supply chains.

The Italian Foreign Minister’s recent visit to India afforded an opportunity to discuss industrial collaboration with special focus on defense to meet the challenges of the future. The Presidency of the G-20 that India assumes later this year and the Summit that it will host next year will provide India yet another opportunity to shape the contours of a new global order.

That India and Europe have chosen to engage just as the world is emerging from the pandemic to a changed global order shows that India’s place in the post covid world order and post Ukraine war world will be a new and crucial one, in which major powers will see India as a reliable ally to help maintain supplies and security of the sea lanes. The Ukraine war, no doubt, will bring about major changes in the European security architecture, but in the overall global scenario Ukraine is only a sideshow as major battles will be fought in Asia.

(Author is former Indian Ambassador. She also served as Counsellor/ Minister dealing with Trade Policy at the Indian Embassy in Brussels, accredited to EU, Belgium and Luxembourg. Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited).