India, Indo-Pacific, Latest news

Interview: EU-India trade and tech talks: it’s all about the geopolitics

The EU and India are actively engaged in trade and investment negotiations and recently launched a Trade and Technology Council. What is driving this cooperation, and what can we expect from these burgeoning conversations?

Robert Francis caught up with Stefania Benaglia from the Centre for European Policy Studies in Brussels to discuss EU-India relations.

Stefania Benaglia heads the Global Connectivity programme at the EU affairs think tank CEPS in Brussels. Stefania is also a long-time expert of EU-India relations. © Bernal Revert

Q: Where do EU-India relationships stand at the moment?

Since free trade agreement negotiations broke off in 2013 between the EU and India, the narrative has changed from being geoeconomic to geostrategic.

The political ‘externalities’ that come with a bilateral free trade agreement weigh much more than the added dollar that you would gain from extra volumes of trade.

This is the lens through which I think we should currently read the current broader relationship between the EU and India.

India has wanted to be seen as a global actor for a while. But there is a question mark concerning the gap between its intentions and its capabilities.

This will be a perpetual question for India – and there is no easy solution.

India is beginning to understand the strategic value of nurturing its international relations with like minded countries such as the EU.

There is a lot that plays into the change of mindset, including the challenge China’s rise poses to India. On the EU side there is a desire to diversify its supply chains and make them more resilient.

On the world stage India wants to project itself and become the global manufacturer.

But between where India stands today and that actual accomplishment, there are some substantial domestic hurdles that need to be addressed.

India is still a complicated place to do business.

Q: Do you think the FTA negotiations will be finalised soon?

With next year leading to political elections on both sides, there is a sense of urgency in concluding the talks by the end of this year.

I don’t think it is realistic to expect a conclusion of the FTA negotiations before that, but there might be a surprise. We need to be patient and see how some elements play out.

Everyone – bar a few exceptions – wants to work with India right now. And India knows it. This can be a very humbling exercise as you have to make an appealing offer to New Delhi.

This EU-India FTA is unique and is like no other in terms of its political value.

The whole world is looking at this agreement to see what concessions India will make – and as well as at what the EU will do.

Q: What do you see resulting from the EU-India Trade and Technology Council?

It is the political value of the TTC itself that is its main ‘deliverable’.

The TTC can be viewed through the same lens as the FTA – it is more geostrategic than geoeconomic.

Cooperation with India is key as the EU will obtain easier access to critical raw materials and production sites for semiconductors.

But the TTC is also a useful forum for policy discussions, and it sends a useful political message.

It can be considered a success if the working groups meet regularly and establish a community of top civil servants and officials that understand each other and bring the issues forward.

As we have seen in the EU-US TTC, the added value of such a forum really is about building trust over time.

For the EU-India TTC there are certain fundamentals, such as human rights elements, that need to be fulfilled before the EU can negotiate something in the digital sphere.

The trust gap is significant between the EU and India.

Q: How important are the TTC discussions around standards?

Standard setting is a crucial part of the TTC.

If India adopted certain digital standards that are compatible with those of the EU, then the EU by extension could prod other countries that want to work with India to adopt these standards. It needs international cooperation with like-minded countries to make sure its standards remain the international standard.

China is aggressively pushing for its own standards in the digital sphere to become international standards.

Technology transfer is also a key issue: India wants EU technology. The risk Europe sees is that India uses this technology to deconstruct it and come up with cheaper and simpler technology and market it to other countries.

CEPS colleagues Rosanna Fanni and Dr Malorie Schaus also contributed to this interview.

Leave a Comment

Your email address will not be published. Required fields are marked *

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.