From Brussels, European Commission President Ursula von der Leyen spoke with Indian Prime Minister Narendra Modi on May 3 to discuss assistance to India in dealing with the New Guinea virus outbreak and to exchange views for the upcoming EU-India Online Summit on May 8. The exchange of views. According to the sources, the EU and India will sign a multifaceted connectivity agreement covering transport, energy, digital sectors and people-to-people contacts. In addition, the two sides also intend to revive the EU-India Broad Trade and Investment Agreement, which has been stalled since 2013.
The Hindustan Times reported Monday that Modi will hold talks with von der Leyen and European Council President Charles Michel on the sidelines of Friday’s online summit, where the two sides will sign an agreement to boost mutual connectivity. According to EU diplomatic sources, the agreement will create assets and build capacity for India and the EU, as well as link India and the EU in the transport, energy, digital sectors and people-to-people contacts through joint investments in third countries. The agreement will not only be based on a rules-based international order, but also involve the private sector to create assets in the Indo-Pacific region and will not impose a debt burden on third countries.
The EU diplomat said, “This is India’s and the EU’s response to the Communist Party’s ‘One Belt, One Road’ initiative, as the connectivity partnership will take into account environmental and sustainable development as well as a fully transparent process …… This is similar to the Indian and Japanese bidding in the Sri Lankan port project.” Von der Leyen tweeted the same day, “There is clear momentum to strengthen our strategic relationship on trade, digital, climate change and multilateralism. I am encouraged by the prospect of strengthening Indo-European trade and investment ties. This will bring great potential for our businesses and citizens.” The current India-EU summit comes just after the EU, for its part, unveiled its Indo-Pacific cooperation strategy.
While many experts question the EU’s Indo-Pacific policy mentioning India only once, EU diplomats made it clear in their briefings that India is as central to their policy as the United States and Japan. If the measure is to mention a country by name, the United States is not even named once [in the strategy],” said one ambassador to Europe. With the China-EU comprehensive investment agreement on hold, the wait-and-see aspect of the EU is clear.” Separately, the Financial Times reported that India and the EU plan to restart the long-stalled EU-India Broad Trade and Investment Agreement negotiations in a bid to deepen their economic ties and counter the rise of China. It is reported that India and the EU may announce as soon as Saturday the resumption of the negotiations, which were suspended in 2013 due to differences over tariff rules on auto parts and the right to free movement of professional labor.
The report said that the resumption of bilateral trade talks between India and the EU, the world’s two largest economies, has become a priority in the epidemic. In addition to the move to enhance trade cooperation and drive economic growth, the response to the economic devastation caused by the epidemic and China’s state capitalist model are the main incentives. An Indian government official said the resumption of talks would be announced at the end of the EU-India online summit in Porto on Saturday if there were no last-minute obstacles between the two sides or resistance from EU member states. He said, “There is optimism, but it is not a done deal.” The EU’s intention to restart trade talks with India comes at the same time that Britain is seeking its own trade deal with New Delhi.
Previous attempts by the EU and India to reach an agreement between 2007 and 2013 have failed, despite extensive work between the two sides. Problems include India’s reluctance to ease access to EU lawyers and to further open its market to European auto parts. The EU’s reluctance to provide more generous rights for Indian professional labor to work in Europe has frustrated New Delhi. Officials believe the prospects for a deal are more favorable now than they were 10 years ago, as India seeks ways to counter China’s growing economic power in the region. New Delhi decided last year not to join the Regional Comprehensive Economic Partnership Agreement with 15 other countries, including China and Japan.
“It would be a game changer,” said a senior EC official. “We are seeing a geopolitical shift,” he said, adding that there is now more “political momentum” behind the talks. The official said progress in the talks would depend on confidence-building measures on the Indian side in terms of market access, including easing the right of action for European professionals to visit factories in India. David O’Sullivan, former director general of trade at the European Commission, commented, “I hope that if they restart, there is reason to be optimistic that we can squeeze out a little more time to get the deal done. He added, “It would send a positive signal to the international community and to the Indo-Pacific strategy.”
Recent Comments