EU-India relations come full-circle

by Gauri Khandekar*

The 2017 EU-India Summit stands as a watershed moment in the relationship’s timeline having transformed EU-India ties into a veritable strategic partnership by securing it firmly onto two new forward-looking pillars – a platform for climate and energy cooperation and a partnership on sustainable urbanization. The summit also registered a pledge by the European Investment Bank to invest a further €800m in solar projects across India and the conclusion of a mobility agreement for young scientists and researchers.

For more than a decade, the EU and India partnership had been slow-moving and fragmented, struggling to maintain momentum. The relationship remained far too focused on set-piece summits rather than fostering dynamic everyday linkages. Meetings, including summits, would be ritually cancelled and the paucity of high-level bilateral visits revealed a lack of political will. Unfairly large emphasis was laid on foreign policy cooperation, but on many issues divisions far exceeded commonalities, leading to disappointment and an overall delusion in the potential of the partnership.

India’s transition from an aid-recipient to a donor country in the early 2010s meant an end to EU development aid to India – for long the mainstay of the relationship. Moreover, a Free Trade Agreement (FTA) – the partnership’s most imaginative moment – would for numerous reasons prove difficult to materialise. A number of the then-quasi strategic partnership’s other initiatives too (maritime cooperation, a Civil Nuclear Energy Fission Agreement, a Europol Agreement and others) remained in the pipelines for far too long. Overall, the EU failed to conjecture a partnership with rising India beyond trade or aid.

The establishment of the two platforms for climate and energy and sustainable urban cooperation strikes the right note to define and transform future EU-India relations given India stands on the cusp of major transformations in both the energy and urban fields driven by strong social and economic rationales. These initiatives are therefore timely, not only for India and the EU, but also for global climate efforts.

For one, the scale of India’s energy and urban transformation will be monumental. As the world’s fourth largest emitter of greenhouse gases (GHGs), an environmentally sustainable transition in India will have a significant impact on global climate efforts.

Second, India’s urban and energy transformation represents an immense economic opportunity. India’s Twelfth Five Year Plan (2012-2017) estimated infrastructure investment at around $1.25 trillion, with 40%  emanating from the private sector. Similarly, the investment opportunities in India’s dynamically growing renewable energy sector are vast. The Indian government is keen on achieving 175GW renewable energy capacity by 2022. Indeed, India was named the second most attractive renewables market for 2017 by consulting firm EY.

With these two platforms, EU companies now have a level playing field against actors like China, Japan, Canada, Australia and the US who have aggressively competed for presence in India’s lucrative infrastructure and energy markets. Not only would tapping into these markets enhance economic growth and job creation back in the EU, but would also enhance the EU’s image as a strategic actor in India.

Third, these initiatives can potentially launch the EU and India as global climate leaders. Following US President Donald Trump’s announcement in June 2017 to quit the Paris Climate Agreement, many feared the US decision may derail international climate efforts in particular by encouraging other countries to follow suit. While the latter has not yet ensued, there is a need for climate champions beyond the EU. During his visit to Europe in June 2017, Indian Prime Minister Narendra Modi vowed to go “above and beyond” the Paris Climate Agreement. Modi’s India seems committed to climate action judging by recent efforts like the launch of the International Solar Alliance, proposals to increase the country’s non-fossil fuel electricity share from 31% to 53% cent as early as 2027 (according to India’s Central Electricity Authority), plans to becoming an all-EV nation by 2030, amongst others.

Indeed, the EU and India have reinforced their commitment to the Paris Climate Agreement. Under a bilateral Agenda for Action 2020 released at the 2016 EU-India bilateral summit held in Brussels, both partners pledged to enforcing their Intended Nationally Determined Contributions (INDCs) and enhance cooperation in areas such as energy efficiency of buildings, development of renewable energy including smart grids and fostering research and innovation

While these two initiatives will undoubtedly strengthen the EU-India relationship, there is scope for much more. The EU and India must now supplement the energy and urban cooperation pillars with a symbiotic third pillar on innovation cooperation. Socially and environmentally friendly innovation will be essential for any successful, sustainable energy and urban transformative change-making. While the EU and India both have strong individual innovation communities, building a dedicated platform that fosters innovation partnerships can help strengthen nascent cooperation on energy and urbanisation. Out-of-the-box thinking may also help circumvent jammed FTA negotiations and release mutually beneficial opportunities. While the FTA may not materialise in the next five years both partners can instead seek to liberalise trade sector-by-sector.

Nonetheless, as of 2017, the EU and India appear to have reinstated the strategic quotient in their bilateral partnership. As a long-term investment, the EU-India Platform on Climate and Energy Cooperation and the bilateral Partnership on Sustainable Urbanisation will effectively cement the perception of the EU as a strategic partner in New Delhi, confirm the EU’s commitment to promoting sustainable development in India, and foster the inchoate role of partners as international climate leaders.

*Gauri Khandekar is Researcher at the Institute for European Studies at the Brussels Free University. In 2011 she called the EU-India relationship “A Loveless Arranged Marriage”.
**First published in EurActiv.com