EU and India will launch an EU-India Trade and Technology Council. The agreement was made by European Commission President, Ursula von der Leyen, and Indian Prime Minister Modi in New Dehli on Monday.
Credit: corund / Shutterstock
The collaboration will mark the beginning of a new partnership between the two countries. India and the EU also agreed to resume negotiations for a Free Trade Agreement and to start talks on several initiatives including creating an Investment Protection Agreement and an Agreement on Geographical Indications (for guaranteeing product origin for consumers).
“Today, we are taking steps to deepen our strategic ties with India – on trade, trusted technology and security, notably in respect of challenges posed by rival governance models,” said President von der Leyen.
The EU is currently India’s third-largest trading partner. It accounts for 11.1% of total Indian trade – or €62.8 billion worth of trade in goods. Its first and second-largest partners, China and the US, trade only a marginally larger amount at 12% and 11.7w% respectively.
India, on the other hand, is the EU’s 10th largest trading partner, with just 1.8% of EU total trade in goods in 2020 – well behind its top partners China (16.1%) and the US (15.2%).
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According to the European Commission, the trade relationship between India and the EU has increased by 12.5% over the last decade.
The EU-India trade agreement is being made under the shadow of the Russian-Ukraine, war where nations around the world have been moving to cement relationships and boost military spending.
At the Indian geopolitical conference Raisina Dialogue, President von der Leyen said: “The outcome of Putin's war will not only determine the future of Europe but also deeply affect the Indo-Pacific region and the rest of the world.”
“For the Indo-Pacific, it is as important as for Europe that borders are respected. And that spheres of influence are rejected. We want a positive vision for a peaceful and prosperous Indo-Pacific.”
Given their size and resources, India and the EU are also both critical to the success of global climate strategies. During her India visit, von der Leyen also spoke about increasing cooperation to achieve ambitious decarbonisation targets.
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At a visit to India’s International Solar Alliance, she said: “We are closely aligned with India in the fight against climate change. Solar energy will play a decisive role to reach our objectives on the way to net-zero, both in India and in Europe. Investment here also becomes an investment in our security.”
Recently India has been having strained relations with its top trading partner China. Although India and China managed to maintain their trade partnership in 2021, there had been growing tensions between the two countries.
In 2020 India banned 220 Chinese tech apps including WeChat and TikTok following increasingly serious disputes over the Himalayan border. In one incident a clash resulted in at least 20 soldier fatalities in the Galwan Valley in June.
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