India Should Believe in the EU

Context: Closer cooperation between India and the European Union is the need of the hour to address the common problems in the wake of the global pandemic.

Areas of concerns in India-European Union (EU) relations:

• Economic cooperation: Compared to investments in China (€175.3 billion), EU’s investments in India it is just €67.7 billion (in 2018).
• Mutual Trust Deficit: Lack of attractiveness for EU investment, which is moving out of China, due to mutual trust deficit.
• Stagnation in Free Trade negotiations: Despite strong bilateral relations with EU member states, they are unable to come close in dealing with the EU as a whole. 
• Challenges to Rules-based order: The EU’s emphasis on a rules-based international order is being challenged by the proliferation of exceptionalism. 

Way Forward:

• Enhanced Business Cooperation: can help both the EU and India diversify their strategic value chains and reduce economic dependency on China.
• Addressing the Trust Deficit: Facilitating people’s mobility to improve mutual understanding and create opportunities for innovation and growth.
• Focus on Free Trade Agreement (FTA): Speedy negotiation in FTA  to bring multiple gains to both the partners.

• Geopolitical convergence: Stronger cooperation with like-minded, democratic powers is needed to deal with Chinese assertions in the Indo-Pacific region.
• Climate change cooperation: Both the EU and India can work to succeed in transforming into carbon-neutral economies through the EU's new industrial strategy, the Green Deal.

• Reform of Multilateral Institutions: The EU and India must join forces to promote sustainable reform of multilateral institutions like the World Trade Organization (WTO).