The Relationship between the European Union and India

Seminar Paper 2005 12 Pages

Business economics - Economic and Social History



1. Introduction: What is the analysis about?

2. Background: The external relations of the European Union

3. Problem: What is India’s role for the European Union and vice versa?

4. Research: Methodology & procedure pursued in the analysis

5. Findings: What is it like today and likely to be tomorrow?

6. Conclusion & Recommendations: Aspects to be derived

7. Resources

1. Introduction: What is the analysis about?

In view of globalization and economic reorganization, the EU needs to take up and intensify bilateral relations to current and future superpowers, like e.g. the United States of America and China People’s Republic.

Increasingly, India is both in terms of global politics and economically awaking and stepping into the first row of global powers. At least, this is what it is supposed to according to observer. Moreover, the role of a major regional actor makes up the significance of India as a strategic partner, esp. in the fight against terrorism, which haunts India in equal measure like Europe. Thus, the European Union naturally has to strengthen cooperation with India.

Since the EU wisely foresaw the majority of developments, they installed the so- called regular “EU / India Summit” in June 2000 and regular talks are held now.

In the following, the analysis in question will deal with the steady relationship with India and the developments within the latter. Particularly, a focus is to be laid at the trade relations between the two sides.

Firstly, I want to classify this relationship into the lane of all strategic partnerships of the European Union. By this, an evaluation of this relationship in contrast to other ones ought to be achieved. Starting from this, a description of the current situation between both parties and a prospect into the future of the latter are to be carried out.

After a short explanation of the methodology, the findings will be presented. Here, a track down of particular issues to improve and new cooperation fields take the centre stage. This part is followed by a conclusion and possible solutions discovered during research. Based on those, recommendations will be made aiming particularly at trade relations.

2. Background: The external relations of the European Union

The European Union keeps up relations with several countries outside the old continent, and especially constant contact with six nations, i.e. the United States, Canada, Japan, China PR, Russia, and, most recently, India.1 2

Most currently, on September 7th, 2005, the sixth “EU / India Summit” took place in New Delhi.3 The journey, led by British prime minister and current EU president, Tony Blair, originally began with an “EU / China Summit”. Hence, political observers had the opportunity to directly compare the two relationships.

The European Union keeps up talks with China PR on delicate issues, such as Human Rights, relations to China Republic (Taiwan) and domestic policy (e.g. treatment of dissidents).4 In the past years, however, the Union’s focus lay on economic relations as China PR has been, still is and even will be probably one of the greatest winners of globalization process.

While China is stated to be EU’s second biggest trading partner, India ranks only on No. 9 according to EuroStat.5 In 2004, the European Union exported goods, mainly industry products, worth $ 48 bn to China PR and imported goods worth $ 127 bn.6

Both exports and imports have been constantly growing over the last years, showing the increasing mutual importance.

Apart from the fields of politics and trade, FDI, environmental subjects, and technology play a significant role in the relations. There is only one country, which is ranked even higher than China in the trading partners’ list of the European Union: the United States of America. The world’s biggest trade relation has been established between the US and the EU. Both nations represent the most important partner for each other. 46% of the EU’s FDI went to the US and, at the same time, 69.3% of the US foreign direct investments into the various member states of the European Union. This transatlantic partnership aims at far more than merely trade issues. Political reactions to current matters often used to be brought into agreement with each other; at least before the Bush administration took over charge in the White House.

The strong connection to each other is said to base upon shared values, such as “democratic government, human rights and market economics”7 and a common history on the basis of huge streams of European immigrants into the USA.

The joint combat of terrorism and the common management of problems initiated by globalization add to the overall image of these relations.8

With the other nations, the EU has partnerships also mostly covering these themes mentioned above. Of course, in these ones as well economic and political aspects play the major role.It is unclear how the existing partnerships will develop in the coming years, whether there will be intensification or an easing of the relations. It is also not completely clear, what the future need for strategic partnerships for the European Union will be and which countries will be the ones most eligible.

3. Problem: What is India’s role for the European Union and vice versa?

“The sheer size of the European Union in economic, trade and financial terms makes it a world player.”9 Within the huge web of bilateral and multilateral relations of the EU with certain nations, it has to turn out over the coming years what India’s role within this web is. After years of being a recipient of assistance transfers of the EU, they currently are one of 6 nations which the EU conducts regular talks with.

But the question is about the future and the destination of the regular talks and about the profundity and extent of the relations. The EU maintains relations with major political and economic global players, however, mostly limited to political and economic levels. Being the largest democracies of the world and exhibiting certain parallels and similarities within their dominions, it is unclear, yet exciting to observe as well, how the relations have changed since the establishment of regular talks, what the relations actually covers and what future cooperation projects and goals will be pursued in the years to come.

Quite an amount of questions have to be addressed in the sections in the wake: Which steps have been carried out since the initial arrangement of regular talks in June 2000? What kind of gigantic leaps and small mini-steps have been taken since then? What projects are planned for the mid- to long-term future? Do the EU and India confine to concentrating on political or economic issues only? Or do they want to take extended stock in each other, maybe in the fields of culture or even military alliance? These are the subjects to be covered during the next chapters.

4. Research: Methodology & procedure pursued in the analysis

In order to address the questions appropriately, a scan of the official resources directly from the parties involved, such as the EU website and the homepage of the Ministry of External Affairs of India, will be used to complete the answers to the questions stated above.

In addition, external observers shall be consulted via their websites and publications. Not only European and Indian media, but also press coverage from overseas, i.e. the United States and China PR.

Within the following analysis, a chronological approach will be pursued. The individual summits between India and the EU will be scanned and summarized in order to pinpoint a particular development in one or the other direction. The main agreements and goals obtained in each summit will be identified and, subsequently, classified into the broader picture of the relations between the two global powers.

In the conclusion a summary of the development and possible derivations from the latter will follow. For this, certain comments from international experts and media would have been helpful as they hold much more background information about the relations than accessible via internet and published books.

5. Findings: What is it like today and likely to be tomorrow?

Unlike the majority of the partners of the EU, India is able to claim that it has a partnership which is not only based on trade and political issues, but also on cultural cooperation and other joint projects with regard to e.g. research and space technology.

Basically, this relation is a perfect role-model for a mutual win/win-situation: For India, the relation to the EU manifests an “opportunity to be recognised as a truly global player”10. This implies both economic upswing with the help of the Europeans and gain in political importance, esp. with regard to regional issues like the Kashmir dispute, the civil wars in Sri Lanka and Nepal11, the turmoil at the eastern borders, and, last but not least, the fight against terrorism initiated and supported by western neighbouring countries such as Pakistan and Afghanistan.


1 TheEuropeanCommission’sDelegationtoIndia.September2nd,2005.President Barroso to attend EU-India Summit in NewDelhi on7 September. Available at: http://www.d e lind.c e c.eu.in t /en/pr e ssandinfo/press_releases_2005/020.htm , visitedon:November 6th, 2005.

2 Ministryof External Affairsof India. January7th, 2005.India-EUrelations. Available at: http://www. m ea.g o v.in/o nm ouse/eu1.h t m , visited on: November 6th 2005

3 BBCNewsWorldEdition.September7th, 2005.Blair hails India 'turningpoint'. Available at: http://news. b bc.co.uk/2/hi/uk_news/politics/4221678.stm visited, visited on September 13th, 2005

4 TheEuropeanUnion.May2005. TheEU'srelationswithChina–Overview. Available at: http://europa . eu.int/co mm /external_relations/china/intro/ , visited on November 4th, 2005

5 EuroStat.September2nd, 2005.Chinazweitgrößter,IndienneuntgrößterHandelspartner von EU25. Available at: http://epp.eurostat.c e c.eu.int/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PRE REL_YEAR_2005/PGE_CAT_PREREL_YEAR_2 0 05_MONTH_09/6-02 0 92005-DE-BP.PDF, visited on: November 5th, 2005

6 Ibidem.

7 E uropean Business News Online. May 2004.EUguides- External Relations in the European Union .Available at: http://www.eubusiness.com/guides/ext-rel visitedon: October 25th,2005

8 The European Union. May 2005. TheEU'srelationswithChina–Overview. Available at: http://europa . eu.int/co mm /external_relations/us/intro/ visited on November 4th, 2005

9 European Business News Online. May 2004.EUguides- External Relations in the European Union. Available at: http://europa . eu.int/co mm /external_relations/us/intro/ visited on November 4th, 2005

10 TheEuropeanCommission’sDelegationtoIndia.2000. A Milestone in EU India Relations. Available at: http://www.delind.cec.eu.int/en/political_dialogue/summits/first/overview.htm visitedon: September 24th, 2005

11 TheEuropeanCommission’sDelegationtoIndia.2003. 4th EU-India Summit- Joint Press Statement. Available at: http://www.delind.cec.eu.int/en/political_dialogue/summits/fourth/107-joint-pr.htm visitedon: September19th, 2055


ISBN (eBook)
ISBN (Book)
File size
368 KB
Catalog Number
Institution / College
University of Applied Sciences Rotterdam
European Union India Affairs Europäische Union Indien Strategische Beziehungen Global




Title: The Relationship between the European Union and India