EU-India strategic partnership: Time to co-create the Indo-Pacific governance

16 November 2021

Keen observers of EU-India relations surely have not missed the change in the narrative around the two actors’ strategic partnership. In the last five years, the EU-India relationship was upgraded from frozen relations to a prime partnership. The last summit’s decision to reopen FTA negotiations and to launch the Connectivity Partnership are examples of these changing times. However, it is by effectively co-creating the governing structure of the Indo-Pacific that the strategic partnership can prove its impact.

Most recent evolution of EU-India relations

After a four-year hiatus between 2012-2016, caused by the halting of trade negotiations in 2013 coupled with the Italian Marines case in 2012, EU-India relations resumed only five years ago. Adopting the EU strategy for cooperation with India and the EU Strategy for connecting Europe and Asia in 2018 set the basis of the new relations. This year’s EU-India Leaders’ Meeting in Porto represents a new high in relations and allows for the partnership to move forward. In the relatively short period of five years, the narrative around the relationship has moved from brainstorming areas of joint interest (Agenda for Action 2020) to outlining 13 pages of common objectives (Roadmap to 2025) and acting through the joint implementation of the Connectivity Partnership.

The third EU-India Strategic Partnership Review was held in October. It is reassuring that the reference to “realiz[ing] the untapped potential” has finally disappeared from official statements. On the contrary, the partners are now finally making the most out of the forum and using it to tackle contentious issues, such as discussing their positions on COP26. How to tackle climate change remains one of the most challenging questions and the EU and India have diverging positions vis-à-vis COP26: the EU tries to export a green deal approach, while India supports a less binding approach that also takes into consideration historical emissions. Acknowledging the problem is only the first step. Working towards a concrete solution must follow.

At the end of the day, since the two sides are building their strategic partnership on shared values, particularly multilateralism, these need to be promoted in the region. If the EU and India are true to their words, they must find a way to co-create a governance system for the region.

In addition to EU-India relations, bilateral relations of EU Member States with India are improving. Relations with Italy — which had severely deteriorated after the 2012 Marines incident as well as the Augusta Westland chopper case — are refocusing on working towards common interests and overcoming common challenges. Portugal, Sweden, Poland, Denmark, and the Netherlands are just a few examples of countries with renewed enthusiasm for EU-India relations. And of course, economic relations with Germany continue to develop, while strategic relations with France are on a solid track. The Indo-French strategic partnership, in particular, is likely to deepen further as a result of the AUKUS case. India’s development of relations with the Member States as well as with the EU is beginning to show results. Several milestones have been met, which will allow for the partnership to take off. Carrying out joint projects through the Connectivity Partnership and successfully concluding FTA negotiations will upgrade the relations from joint communication to joint action.

FTA and Connectivity Partnership

Boosting trade relations through signing an FTA is regarded as an important milestone to meet for EU-India relations. A 2020 EPRS study assesses the potential gains from increased trade for both sides to be between EUR 8 billion and EUR 8.5 billion. Furthermore, potential gains from coordinated EU action in addressing possible side effects of changes in trade, such as inequalities, labour market effects, poverty and development implications, and environmental issues, may be much larger. This consideration further confirms the need to finalise such an agreement. However, before entering into force it will take years and quite a few of them. Official negotiations have not started yet, and Indian expectations of negotiating a unique template — one that excludes the sustainability clause featured in all EU FTAs — will likely find some resistance from the EU.

A different story altogether, and perhaps a more promising one, is the Connectivity Partnership. Building on the first-ever EU Connectivity Partnership signed with Japan in 2019, the EU signed one with India during the Leaders’ Meeting in Porto earlier this year. Energy, transport, people-to-people, and digital connectivity are the pillars. Every one of these areas offers huge potential, from investing in the green energy transition to developing sustainable transport systems and stimulating research and setting standards for new technologies. Moreover, the creation of an innovative financial system driving growth and generating returns would change the way foreign policy is implemented. Proving how the EU and India can jointly deliver and implement connectivity projects is the game-changing signal we have been waiting to see. While jointly creating an innovative financial system will show the potential of the EU-India strategic partnership by showcasing the power of togetherness, the real impact of the partnership comes from the capacity to co-create sustainable governance in the Indo-Pacific.

The Indo-Pacific

The EU presented its strategy for cooperation in the Indo-Pacific last September. By unanimously adopting a strategy aimed at enhancing the EU's role in a geopolitically charged region, the EU Member States declared that their presence in the region would be coordinated by the EU. The EU strategy will serve as a guiding document for all future actions of EU Member States in the region. This is an important message, which may well set a new tone for EU Foreign Policy. Historically, the Member States have managed the EU’s Common Foreign and Security Policy (CFSP) and Common Security and Defence Policy (CSDP). Contrary to other areas such as trade, the regional organisation has limited (special) competencies in CFSP and CSDP, which are run by a unanimity rule. Partly because of this, the EU has been a reluctant global actor until now. However, this may likely change in the near future.

For this, the implementation of the Indo-Pacific strategy is key. First steps among the suggested actions should be an enhanced naval deployment by the Member States and bringing a regional dimension to the connectivity partnerships with Japan and India. The reflections contained in the ongoing Strategic Compass on what kind of security and defence actor the EU wants to be will also likely contribute to a changing narrative and enable the EU to become a global actor true to its name. It is difficult today to talk about the EU’s role in the Indo-Pacific without mentioning the AUKUS affair. Among the many lessons to be learned from this instance, two are crucial for EU-India relations. First, there is a critical lack of trust in the Indo-Pacific region (and beyond), and second, communication is key.

Lack of trust and dysfunctional communication have many downsides and can even become plain dangerous if they lead to increased militarisation and/or foster divisions. Moreover, the region is also witnessing a mushrooming of bilateral and multilateral associations which need to work coherently to avoid fostering frictions. If the EU and India manage to drive the co-creation of functional governance of the region — by facilitating the communication amongst the various associations to which they belong — this would be a game-changer. At the end of the day, since the two sides are building their strategic partnership on shared values, particularly multilateralism, these need to be promoted in the region. If the EU and India are true to their words, they must find a way to co-create a governance system for the region.

To conclude, the strategic partnership between the EU and India has proved capable of rising from the ashes and reaching new highs in a relatively short time. Swift implementation of the Connectivity Partnership can showcase the power of togetherness. But the real impact of the partnership would come from the co-creation of an effective governance system in the Indo-Pacific to foster cooperation over friction. Getting this right must be the priority of next year’s 17th Summit.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Stefania Benaglia is Associate Researcher at the Centre for European Policy Studies (CEPS). She also manages the Think Tanks Twinning Initiative for the EU Policy and Outreach Project to India and serves in the Advisory Board of the EU-India Association. In 2019 she was nominated as Top 40 Under 40 EU India Leader. Between 2014 and 2017, she moved to Delhi working on EU-India defence cooperation. Her previous work experience includes Istituto Affari Internazionali (IAI), NATO Parliamentary Assembly, European Commission and the International Institute of Counter-Terrorism in Israel. Image credit: Etienne Ansotte/European Union, 2021.