A University Grants Commission Approved Journal
(under UGC-CARE, Arts & Humanities Citation Index)
ISSN 2582-2241





Former Indian Foreign Secretary Krishnan Srinivasan demonstrates in his book Old Europe, New Asia: Strategies, Challenges, Responses that Europe and emerging Asia could be natural partners with considerable synergy in fashioning a new multi-polar world, but they are handicapped by their respective internal weaknesses, lack of self-confidence, and the considerable influence of the United States despite its rebalance to Asia proving to be a non-starter. Ambassador Srinivasan identifies the limitations of current Europe-Asia relations, and explores the potential for the future. In the first part, the author examines Europe’s interactions with China, and in the second he explores the India-Europe relationship. He recommends that India needs a “Look to Europe” policy to supplement its “Look East” and “Act East” policy.

The EU and China

An Overview

THE WAY CHINA TURNS OUT IS, TO AN EXTENT, BASED ON HOW IT IS treated. To treat it as a threat may be self-fulfilling. To contain and thwart it would provoke an onrush of nationalism. Treating it as a partner and enveloping it into multilateral institutions will be the better way to define common understandings on identity, interests and security. The United States can lead but will not dominate, even if it gives up unilateralism, military supremacy and pre-emptive war. The majority of the world’s population cannot be governed by a system to suit the interests of Europe and the United States.

By 2030, almost certainly by 2040, China’s gross domestic product will be the biggest in the world. It is already the world’s biggest exporter and biggest importer of commodities. The belief that the private sector and free market are more efficient than public ownership and regulation has consequently been challenged. The shift in power and wealth from West to East is similar to the shift from Europe to the United States that happened in the 19th and 20th centuries, but this shift will be faster than any in earlier history. The implications of this are not clear; it could be less smooth than the shift from Europe to the United States for institutional and cultural reasons, but it is better for both Europe and Asia to prepare for it as a challenge and an opportunity.

Diplomatic relations between China and the European Commission date back to 1975.  There was a Trade and Cooperation Agreement in 1985, and in 1995 came the first European Union (EU) document on China, with annual EU-China summits after 1998. The EU along with the United States played an active role in facilitating China’s admission to the World Trade Organisation (WTO) in 2001. In September 2003, a EU-China comprehensive strategic partnership started with the EU’s A Maturing Partnership: Shared Interests and Challenges, and in October 2003 China replied with China’s EU Policy Paper, the first such document from the Chinese on any group or country, which noted that the EU would play an increasingly important role in regional and global matters.

The EU needs to anticipate that China will be richer and more powerful, and must strive to make it realize that adherence to global rules and norms is not incompatible with this process, but will enhance and make it sustainable. Increase in Chinese investments in Europe would help the EU’s economy, create jobs and growth, and support China’s external profile. The EU negotiators have to ensure that China does not compete unfairly by using pirated intellectual property or take undue advantage of government support. The EU must encourage internal competitive neutrality: if China expects its growing intellectual property to be respected abroad, it must protect foreign intellectual property at home, including in state-owned enterprises and the provinces. There has to be dialogue on food and product safety, exchanges of scientists on environment, clean water and climate change, and bringing together Chinese and EU provincial and municipal leaders.

China has so far combined authoritarian government with a partially privatized economy. Since the financial crisis, the Chinese have regarded their model as an alternative to democracy, but the model is culturally specific and few developing countries can emulate it. Export driven growth and top-down decision making may not yield good results for ever. The guiding ideal of the Communist Party is equality, but the society has growing inequality, and most recent waves of technology innovation benefits the best talents and best educated and creates divisions.

China has bought European sovereign debt in a big way and bolstered the euro value against the dollar. The EU is China’s biggest trading partner, and China is the EU’s second biggest trading partner after the United States. The world must accept the idea that China may be a cheaper and more flexible source of capital than many alternatives because Chinese banks offer financing at attractive terms for foreigners to buy Chinese goods. The next phase is likely to see China’s industrial giants starting to look overseas for new markets and new expertise. That will be controversial because most of them are controlled by the Communist Party of China (CPC). In areas like telecommunications and energy, they could provoke trade rows in the West.

China regards its EU ties not as a matter of expediency but as a long term strategic policy, and hoped to enlist the EU as a pole to foster a multipolar environment and limit U.S. unilateral attitudes. Chinese saw the relationship as reducing contradictions, and the EU as about building consensus. In fact, China affects Europe’s world far more than Europe can affect China’s world. Europe is hedging its bets because Sinophiles and Sinophobes there go hand in hand. On one hand, they may assert that China is a “partner,” and on the other they think it may be a security problem due to fears of lost jobs and markets flooded with Chinese goods. China’s exporters boosted western living standards by selling cheaper manufactures, but killed off many European manufacturers. China’s surplus meant European deficits, and huge global increases in food prices, energy and commodities.

The Strategic Partnership of 2003 was backed by an agreement on space and satellite navigation cooperation. For China, such a partnership meant a security relationship with strong political ties, but that could not be realized when Europe’s strategic policy is subordinated to the United States. Therefore the EU is regarded as a distant power with limited strategic interests in Asia. A High Level Economic and Trade Dialogue began in 2008. EU’s agenda was to deny preferences, use instruments like anti-dumping and safeguards, and obstruct compensation through WTO’s trade dispute mechanism. Its complaints were that China undervalued its currency, did not comply with the WTO, restricted access to public procurement, had social and environment conditions that were non-tariff barriers, gave subsidies to national industries, and placed restrictions on the export of some key raw materials. Seven out of ten European businesses say they are victims of Chinese violations of Intellectual Property Rights (IPR) and 73 per cent of all counterfeit seized in EU in 2011 was from China. China, of course, had its own list of grievances: EU security scrutiny of investments, European sunset industries demanding protection, the EU arms embargo, denial of market economy status, the Nobel prize to a jailed activist, meetings of politicians with the Dalai Lama, European actions on copyright, trademarks and IPR, lack of transparency in regulations and anti-dumping. There are empty threats on both sides to close the market.

The EU has struggled to form a response while China eroded U.S. influence in East Asia, forged ahead with almost 100 per cent literacy, and life expectancy nearly at developed country level, promotes its language and culture abroad through Confucius Institutes, has 300,000 students abroad and is taking steps towards oil self-sufficiency. China has reputedly large deposits of shale gas—36 trillion cubic metres of accessible reserves, though at present China has to buy the advanced equipment from the West which adds to the extraction costs.

Like the United States and China, EU-China trade ties are too big to fail. The EU is China’s largest trade partner ahead of United States and Japan, and an important source of investment but many Chinese policies run counter to the EU, especially regarding human rights in Africa. Business is business, the Chinese might say, echoing what the EU itself states in dealing with China. China represents a development model not in line with EU; one where economic liberalization need not be accompanied by political liberalization or Western norms. This is appealing to some parts of the world, not only in Asia and Africa, but elsewhere.

The big three in the EU—Germany, France, and Britain—have competing and conflicting agendas on China. They, along with Italy, pursue strategies to optimize their own companies’ prospects in the Chinese market on the grounds that only through fostering good political relations with China could EU companies get lucrative contracts. There is also intense competition among European countries to attract Chinese investment. Chinese firms have acquired Volvo. China runs a terminal in Greece, wind farms in Romania, and an economic zone in Bulgaria. It has a stake in Barclays, oil ventures with Norway and Switzerland, and an average spend of £6.5 million per property in London.

Nevertheless, German investment in China is 30 times the Chinese in Germany. The number of EU investment projects in China may be less than that of the United States and Japan but with an average larger value per unit, more high value added, and more transfer of technology. EU companies have an interest in selling or transferring advanced EU technology to China despite IPR being an issue at the governmental level.

As the centre of political, economic and strategic gravity moves from the Atlantic to the Pacific, and from the United States and Europe to Asia and China, the question is whether the collective EU is prepared for this shift. The Chinese are opposed to EU ambitions to westernize and transform China, but China will have priority for the EU because of its political influence, economic potential, higher economic stakes and trade, which define the degree of interest the EU takes in other countries also. Will China accept the culture, norms and structure of postwar order? This is the biggest core question. It would help if Europe’s engagement was a considered, consistent one driven by organizing principles and not a series of one-off reactions to occasional events. It is not certain that China possesses either the will, or intention or capacity to shape tomorrow’s world. China’s internal debate is still fluid, and there is a window of opportunity before final strategic settings become entrenched. But this is a time when the EU itself is in deep distress. Both the EU and the United States are getting disengaged and insular in regard to the rise of China, when policy needs to be sophisticated and acute. There must be a significant diplomatic engagement with China from the West, or there will be a new global order by default, perhaps inimical to Western interests and values. But this will need more intellectual effort, diplomatic coordination, political will and open and candid engagement with Asia than has so far been the case. The relationship needs to evolve from a trade partnership to an equal partnership on global issues because future geopolitical and economic realities require a working relationship. The goals should be mutual confidence building, military transparency, common responses to disaster management, global challenges like terrorism, disarmament and climate change, commitments to open economies and sustainable development, and a new Asia Pacific order that could translate into a wider peace, because, for the moment, China is not seeking to oust the United States from Asia. The EU should refrain from linking non-trade goals such as democracy and human rights, cultural diversity, environment and sustainable development with economic matters. This makes EU look preachy, pandering to its anti-market non-governmental organizations (NGOs) and other European lobbies, and arouses Asian resistance.

Arms Embargo

The arms embargo sustained against China by the EU since the Tiananmen Square incidents in 1989 is held by the Chinese to show the EU’s inability to escape from the Cold War mentality. The European Parliament is very vocal against lifting the embargo. In fact, the EU arms ban was a Council declaration, vaguely defined and not binding, and is thus the result of a series of national embargoes, supplemented by EU’s dual use regulation, which is binding. Then Chinese Premier Wen Jiabao in September 2012 urged the EU once again to lift its arms embargo which has been pending for one decade, and for which the Chinese have been pressing since 2002. The ban limits high technology and dual use sales at a time when China wants to diversify its sources of purchase from Russia which is its main supplier.

Chinese Type 98 Main Battle Tanks on parade. This photo, by the courtesy of Wikicommons, is in the public domain.

The EU has been considering lifting the arms ban since 2005. France, Italy and Germany are opposed to the arms embargo, the Nordics and the Dutch want to keep it, and U.S. influence retains it in place. The United States supports the ban on account of China’s human rights record and its relations with Taiwan. What worries the United States and its Asian allies like Japan and Taiwan is that the EU should be involved in Asian regional security or in Asia’s balance of power, since it lacked any clear political vision, and the United States is adamant that advanced defense technology, currently shared with Europe, should not end up in Chinese hands. When considering lifting the arms ban, the EU has bowed to the concerns and threats of the United States which confirmed to China that the United States was firmly in command of the major political decisions of the EU.

The ban assumes importance because for 20 years to come, the main demand for arms sales will be from outside the U.S. and European markets, and mainly from big Asian importers. European defense industry suffers more than the American, which has the benefit of a domestic market bigger than European countries combined.

Nuclear Opportunities

In civil nuclear research, Europe could benefit from opportunities in China.

China is building state of the art nuclear facilities while Europe’s are aging and some countries will have to close down some experimental nuclear reactors.[1] Nuclear power is heading South to the developing world. Radiation and the costs of Fukushima have caused the North to cap their programmes and Europe has reached saturation point for electric power. Germans closed eight reactors and will close the rest by 2022. Switzerland and Spain have banned new reactors, and Italians voted against a nuclear programme. Mexico will stop construction of ten reactors by switching to natural gas, but South Africa will go ahead and so will other developing countries. Russia, France, United States and Japan will vie with each other to sell reactors, while pro- and anti-nuclear European camps hamper a unified energy approach to Asia.

In nuclear energy, France has more advanced reactors to offer India and China than the United States, and its civilian nuclear agreement with India excludes many of the controversial aspects of the Indo-U.S. agreement and provides for transfer of enrichment and reprocessing technologies which the United States had initially excluded. France also seems willing to work within the framework of the Indian Nuclear Liability Act which U.S. companies are not. Britain will start to negotiate a civil nuclear agreement with India.

China supported Germany but not Japan, for the United Nations Security Council, and also supported Cadarache in the south of France over Japan to site the first large nuclear experimental fusion plant, a US$ 12 billion project called International Thermal Experimental Nuclear Fusion Reactor (ITER), but that was less due to favor for the EU than due to its opposition to Japan.

The EU and India

An Overview

China and India have been lonely giants, too big to have any close partners, but as they rise, both China and India will have to accept responsibilities for regional if not global security.[2] India may never bestride the global stage like China but neither will it be a mere walk-on soldier in the play.

India and the EU have many similarities. They are the world’s two biggest democracies and are unions of a number of linguistic, cultural and ethnically different states. They are both unwieldy, bureaucratic, caution ridden, and slow to decision. But these affinities have not translated into closeness. The Indian Constituent Assembly debates are full of the dangers of excessive federalism and the need for a stronger union, so India is familiar with the debate always engaging Europe. India and the EU have both been dealing with integration and unity in diversity for over six decades. The concept of multiple identities is something Europe and India also have in common, and Europe and India face common threats of fundamentalism, terror, illegal migration and climate change. India’s vision of a democratic, multicultural and multipolar world coincides with that of Europe. With a new economic and security landscape evolving in Asia, Europe’s future engagement with it must include India. The EU is India’s major trade, development and investment partner and Europe is becoming important for investment and acquisitions for Indian companies. These are positive trends. The United Kingdom is the biggest investor in India, and receives over 50 per cent of Indian investments in Europe. It also hosts some 40,000 Indian students and has a 1.6 million strong Indian community.

Aggressive nationalism in the world has to be moderated, and India with its tolerant, multi-religious, plural complexion and no ideological inhibitions, might emerge one day stronger than a more chauvinistic country like China. A civilization that accepted the equality of nations may prove stronger than one that rejoiced in either isolation or superiority. Better cooperation between EU and India would give more leverage to both in regard to China and the United States. Europe as India’s ally in the West, and India as the EU’s strategic partner, would give both more prestige and more geopolitical clout, but the two parties are not of one mind. The relationship has been likened to a “loveless arranged marriage… between a well-matched couple but with no spark of chemistry.”[3] India needs a ‘Look to Europe’ policy to supplement its ‘Look East’ and ‘Act East’ policy.

The EU and India could cooperate in projects in Africa and elsewhere in the world in a triangular and mutually beneficial cooperation. There is also the possibility of maritime cooperation in the Indian Ocean which is a maritime/littoral space of geopolitical, geoeconomic and geostrategic priority. The EU, being reliant on sea-based commerce, is an important stakeholder in maritime security in the Indian Ocean with its multiple choke points, piracy, terrorism, failed states and rogue states, overfishing, military supply routes, undersea cables, drugs and arms trafficking, and the increasing presence of China.

The EU balances social justice with economic modernization in regional integration in which India and China are interested, and in the search for distinct ways towards a knowledge economy. India and EU also share concerns on radicalism and extremism emanating from Islamic fundamentalism. The EU needs to have strategic engagement with India on global issues and new forms of global governance.  Such fields of cooperation could include human security, social development, capacity building, democratic reforms, agriculture and rural development, energy consumption and sub-national governance.

On the one side, Brussels pushes to broaden the EU-India framework from the European point of view (e.g. with respect to the human rights) which in fact is difficult to be met and, on the other, New Delhi would like some specific solutions to current issues (e.g. with respect to counter terrorism) and to leave optimization of the framework for the future. The EU-India partnership is a top-down, executive-driven partnership complemented by corporate interests. Ties may be more symbolic than real, but the danger for India is that it may underestimate the degree of coherence that exists already within the EU as seen in the free-trade negotiations, where EU is in the lead as negotiator and not the member states, and thus neglect direct relations with EU institutions. As the major power in South Asia, India does not like European interference in its own backyard, but the EU´s potential impact on politics in South Asia is small and its democratization efforts are complex endeavours with unclear outcomes. A growing and more serious issue is how the EU positions itself in regard to the United States’ renewed focus on Asia in collaborating more with democratic Asian partners. India and other newly emerging powers and regions, such as Indonesia and Southeast Asia, and even Taiwan and Korea, are still neglected in the European media and public discourse.

India established diplomatic relations with the European Economic Community (EEC) in 1962 but it took 32 years for a ministerial level dialogue to start. On the EU’s part, as with other Asians apart from Japan, only after 1990 was there a more pro-active policy shown by Brussels. India-EU meetings at the summit level began on a regular basis only in 2000, after the euro currency was launched in 1999.

EU Attitude to India

The EU is a constructive and widely respected global economic actor of a new kind. It wishes to remain a point of reference, a centre of strategic thought, creativity and innovation. It is economically strong though politically weak, does not have commensurate political or military strength, and cannot formulate a coherent foreign policy position. Strong bilateral positions that are expressed and implemented by its members diminish its credibility as a security player, and it also lacks cultural engagement. In the areas of security interest to India, the EU is almost irrelevant. On strategic issues, the EU has no obvious standing or role. Delhi will point out that there is no EU defense ministry, army headquarters or intelligence HQ, and security cooperation is best dealt with bilaterally, whether on global security issues, terror, nuclear proliferation or energy security. The EU is reluctant to confront Pakistan on terror related issues; it wants to balance between India and Pakistan since it is unwilling or unable, due to its incompetence, to deal with India’s strategic concerns. Europe and India do not face shared threats and have different security contexts. While the EU stresses Indo-Pakistan dialogue, India insists on specific references to Pakistan’s support for terror across its border. India has made several proposals for greater coordination against terror, but there was a mismatch of expectations: the EU has more non-traditional threats like cyber and human trafficking, whereas for India there are questions of national integrity, border control, insurgencies and separatism. Most EU members do not share the same urgency or interest in security as India. India joined the International Thermonuclear Fusion Experimental Reactor project in 2005, mainly due to American clearance after Washington had started negotiations with India on an escape route from the Non-Proliferation Treaty (NPT) in the form of a civil nuclear agreement.

Both India and the EU are open to dialogue on multilateral issues like terror, disarmament, climate change and a rule-based international order, but the EU is unable to take a united stand on India’s nuclear status. There is no coherent European policy towards India, no bilateral trading arrangement, no plan to allocate more of the Community’s aid funds to India, or even to coordinate the aid given to India bilaterally by EU member-states or for it to be used to buy imports from EU members other than the actual donors.

India ranks the EU low in its priorities; it still sees the EU rather as an experiment than as an efficient structure. It remains puzzled as to whether the EU is a super state, a supranational entity or a post-modern state. India finds the changing priorities of the EU baffling. The EU has a very low profile in India and the EU has scarce time and scarcer political energy for India. In many ways Europe and India have come to be perceived as the sick men of their regions: once full of spirit and vitality, now stagnating and spluttering, struggling to overcome internal divisions and find a proper space for themselves in the global order. To cap it all, the EU does not regard Asia as multi-polar but concentrates attention on China, much to India’s chagrin. In the European Commission’s giant bureaucracy, when compared to China, there is lack of India expertise.

The EU feels that India is neither entrepreneurial nor proactive enough and complains about lack of engagement with India. It sees India as poor and mired in its own problems. India for its part engages with the EU but not enough; nor with the European Parliament. India’s democratic polity does not earn it any points with the EU, which is uneasy about strategic cooperation, high technology and defense cooperation with India. The United States has been more sympathetic to India’s rise, whereas the EU is seen by New Delhi as a staunch defender of the existing order. The EU views India as part of the nuclear proliferation problem and is bogged down by legalistic interpretations of non-proliferation. Many EU member states were uneasy with the US-India 2008 nuclear accord.

There are also other differences. There is optimism in Asia, pessimism in Europe. Europe is threatened by a technology gap with United States, and with China taking over European manufacturing and India taking over European services. Europe has to outsource business and insource skilled labour, and India’s market is too protected. Europe believes in a post-modern world of norms; emerging Asia believes in power, realism and balance of power, with little belief in collective institutions. Europe is status quo and Asia wants changes in international society to reflect its interests.  If India wants to rise, and Europe to stay relevant, they have both to exploit their complementarities.

Indian Attitude to the EU

In India, a point of view close to British Euroscepticism is discernible when reflecting on Europe. For historical reasons, Indians perceive the EU primarily through a British lens and historically prefer the bilateral route with key EU states like the UK, France and Germany. Britain is more or less the spokesman for the EU in India, and vice versa. The EU seems to India to prefer process rather than outcome, with a plethora of forums producing limited results, though the same criticism could be made of India. The EU’s and India‘s importance as global players remains at least in part derived from expectations of future power potential rather than actual achievements to date. India has found it hard to see value added in the EU as opposed to individual members like the UK and France, and important Indians regard the EU as irrelevant for India’s future status in the modern world. India has not seen eye to eye with the EU on Myanmar, UN reform, Sri Lanka, climate change, the Doha Round, or non-proliferation. The EU gives Pakistan little priority, but India does not feel it gets any advantage from being a democracy.

Indians, like most others, have an allergy to being lectured to, and Europe is inclined to preach. Former Indian diplomat Eric Gonsalves states, “the European Commission and the EU are a pain in the neck to deal with.”[4] As a democracy longer than many EU states, India wants to handle human rights in its own political space. For the EU to insert human rights into a draft free trade agreement as if they were auto emission standards, upsets Indian negotiators. India accepts multilateralism, but is sceptical about many specific issues: the International Criminal Court, Responsibility to Protect (R2P), humanitarian interventions and the ban on anti-personnel landmines. In geopolitics, the mindset of the Cold War has not fully changed, and the EU in India’s viewpoint has slavishly followed the U.S. lead on many global issues. So there are differences on Ukraine, Syria, Iran and Afghanistan. India and the EU both hesitate between rejection and acceptance of external interventions. India wants to be a pole in a multipolar world, and wants the EU, led by the UK, France and Germany, to recognise its status.

EU-India Problems

The EU’s high moral aspirations reflect those of India after independence in the heyday of Nehruvian non-alignment but India has since moved to a realist power-oriented political project. The voting behaviour at the UN General Assembly in the period 2004-2010 is instructive: in the case of full EU cohesion (when all EU member states cast the same vote), the voting cohesion per annual UNGA session between the then 27 EU member states and India varied from 43 per cent to 53 per cent. This means that, overall, in half of the resolutions voted upon during an annual UN General Assembly (UNGA) session, the EU member states and India cast different votes.

If EU is considered leaderless, India could be expected to be more understanding: its federal system has produced powerful chief ministers in the states and the most powerful politician at one time was Sonia Gandhi, who was only the head of a political party. Both sides, however, are not willing to learn from each other. The nucleus of Indian incomprehension of the EU, however, lies elsewhere; there is no other country worldwide where national sovereignty and use of hard power rank higher as the first priorities.

“Each . . . looks to the most powerful pole . . .  rather than towards each other, and spends more time deploring the shortcomings of the other rather than building . . .  the future partnership.”[5] This is a dialogue of the deaf; the EU hardly makes a conscious effort to understand India. Europe talks about India’s economic labyrinth; India about Pakistan, but Brussels is impervious to Pakistan’s behaviour. The Indian model of growth with democracy is no longer any counter to the China model: no one will listen to India in the absence of economic prowess, rapid economic growth and thriving business opportunities. Both sides appear minimally interested in a special relationship and perceive each other fundamentally as associated with the deficiencies the other powers attribute to them. The EU is a strong proponent of international legally binding commitments as well as powerful international regimes. The EU encourages social protection, respect for the environment and human rights, while India is reluctant to let its economic growth and development be limited by concerns about these issues. India opposes inclusion of core labour standards in WTO negotiations and linking trade with environmental issues, child labour, the rights of Dalits and the death penalty.

India’s complaints with the EU are in regard to nuclear issues, climate change, agricultural tariffs, trade related issues, technology transfer restrictions, access for professionals in the services market, and the complexity of EU policies. Access to the European market and technology for India is a big challenge, with health and sanitary regulations, quality restrictions and social restrictions. There are disputes on Trade Related Aspects of Intellectual Property Rights (TRIPS) and access for textiles, spices, automobiles, software, and pharmaceuticals. Nor does the EU extend any noteworthy development assistance, though Operation Flood from 1970 to 1996 was at one time the world’s biggest food and development programme and made India the world’s leading milk producer.

Indians feel they are talked down to with arrogance by the EU about prosperity, stability and human rights, securitized visa regimes and ignorance about other parties’ compulsions. India feels slighted when even small and insignificant member states, such as Denmark and the Nordic countries, of the EU deliver sermons to India on relations with neighbours, human rights, nuclear non-proliferation and disarmament. Most of the emerging economies in Asia gave women the equal right to vote before two EU countries –Switzerland and Portugal—and India has been a democratic country longer than a dozen EU member states. The Delegation of the European Commission in Delhi set up in 1983 is almost invisible, only known to some development activists and NGOs. The EU-India summits are not newsworthy, achieve little, and get scant media coverage. The emerging Asian economies generally feel that all European journalists are obsessed by human rights matters to the exclusion of everything else.

India as a weaker but more moderate country than China considers it deserves a proactive and sympathetic EU, especially in South Asia where China will certainly be more influential in future. In contrast with China, India was once juxtaposed as the ‘democratic candidate’ and  found world-wide supporters who wanted it to succeed as an alternative to the China model as representing democracy with religion and the English legal system and language. In the 1960s, Andre Malraux had told India that Europe provided a ‘third option’ to United States and the Soviet Union. Is the EU a second option for India and emerging Asia now? EU foreign policy seems to be based on the premise of equilibrium between India and Pakistan, terror and non-proliferation notwithstanding. In many trade aspects, India does not get support from the EU because there are doubts whether India genuinely believes in open trade and a free market. India and the EU need to live up to the promise of their potential. On human rights and secularism it is for India to demonstrate that it is accountable, because the EU through its parliaments and civil society has legitimate concerns and deserves to be convinced.

In information and communications technology, giant companies like IBM and Accenture are expanding rapidly in India to benefit from its low-cost high quality labour, and Indian software companies expand in the United States to create the closer customer relations needed to compete in high-end consultancy services. This is not happening in Europe, where there is no cross movement of jobs and labour as firms compete to provide knowledge leadership, breakthroughs and innovation, and India’s Information Communication Technology (ICT) firms have not established their own ‘brands’ as vendors and not just as service providers.  The sentiment in Europe to outsourcing to India is creating protectionist attitudes while in India the lack of good infrastructure is a handicap.

Cultural Patterns

Modern India has taken an active interest in the West but only after the era of colonization when the West could no longer be ignored. The tendency was different in Europe, where the search for the origins of Western civilization in India or to contemplate India as the recipient of unpolluted wisdom reached a peak with the Romantics and Schopenhauer. At the same time, the West also nurtured the opposite sentiment; contempt for everything Indian as “dark and irrational . . .  standing against the light of reason symbolized by Western rationality.” Some like Edmund Husserl regarded the Europeanization of the world as a historically predetermined fate.[6]

India has a resilient core culture. Macaulayism had as its objective the creation of a person “Indian in blood and in colour, but English in tastes, opinions, morals and intellect” and to keep India in thrall to the British legacy. [7] There are identity clashes. Both the EU and India are victims of prejudice and stereotyping, with constructed identities of the other. India aspires to be treated as an equal and overreacts when it is not so, and to India’s dismay the EU is not reacting fast enough to this belief. For the EU, caste is a repellent aspect of Indian society, and Europe regards India with a superiority complex as a repository of reason. The media could play a role in forming new identities, but there are few pro-India lobbies in the EU and a strong diaspora only in the UK.  

Europe believes human satisfaction and goals are personal and individual; India that belonging to a community is a fundamental human need. The cultural divide on how society should perform has found expression in some cases of family separation where it was felt by India that European ideas are not always right. Twins conceived by a surrogate mother in India were not allowed entry to Norway since the law there did not allow surrogate children to be Norwegian nationals. The Indian government took the children’s welfare into account and felt that the Norwegian mother, in Norway, was the best parent possible for the twins. Diplomatic tension arose about two children of an Indian couple in Norway placed in a foster-home in 2011 despite repeated official appeals for a sympathetic and speedy resolution. Upon diplomatic interventions, Norway said it could do nothing to interfere with the judicial process. In a case in 2012, a couple was convicted for ‘serious child abuse’ in dealing with bed-wetting of their seven-year-old son in Norway. The parents had threatened to return their son to India and the school had reported them to the authorities. The parents were accused of ‘threats, violence and other wrongs’ and sentenced to eighteen and fifteen months respectively. They returned to India in 2013. These interventions by the state into the private lives of families are not a part of Indian culture. India feels it has been treated unfairly and insensitively by certain European countries. Denmark’s refusal to extradite a person (Kim Davy aka Niels Holck aka Niels Christian) involved with airdropping weapons into India in 1995 due to India’s poor jail conditions and human rights record was not well received.

The Indian government has also had problems with European NGOs. It took action against local NGOs using foreign money for a people’s movement in Tamil Nadu against the peaceful uses of nuclear energy. These funds had been received from U.S. and Swedish sources and were diverted by local NGOs, including church groups, to anti-nuclear protestors.

Strategic Partnership

The EU has strategic partnerships with a few Asian countries. The then EU President Herman Van Rompuy summed up the task at hand for the EU, “Until now we had strategic partners. Now we also need a strategy.”[8]

The Cooperation Agreement of 1994 laid down the basis of Indo-EU relations.[9] Annual summits have taken place since 2000 and the Strategic Partnership in 2004 is supplemented by a EU-India Security Dialogue. But India is disappointed by the EU’s response on Khalistani activities, when Germany, Netherlands and others dragged their feet, and at the anti-Indian influence of Pakistani diaspora voters which inhibits EU cooperation. Indians prefer the bilateral route such as with UK, a long-standing dialogue partner, or France that has helped in India’s civil nuclear capability, to the EU as a bloc. In the Indian view, EU has an obsession with China, and is too equidistant between Pakistan and India.

The strategic partnership is only a kind of honorary degree conferred by the EU on certain favoured nations: there is no definition of what a strategic partnership is. In 2004, India responded with its first ever paper on a foreign entity, notably envisaging a relationship “immune from the vicissitudes of . . . relationship with a third party”, presumably meaning the United States and China. The resulting Action Plan of 2005 was also the first of its kind for India with any entity, but the updated joint action plan of 2008 is one that leads mainly to more dialogue rather than any concrete action. The EU struggles to maintain the military resources necessary to match its economic resources, while India’s dilemma is that it is a potential global power without ever being able to establish itself as a regional one. It has to break the shackles of South Asia to integrate itself into the East Asian economic system and project its power and influence globally. The EU can contribute little to the first goal and is seen as an obstacle to the second, unlike the United States. India wants to be treated as something more than just a big market, while it is not clear what the EU seeks from India. Although all the formal structures are in place, the EU and India have been unable to identify one or two core issues from a long dialogue list in the Joint Action Plan. European diplomats have expressed frustration at New Delhi’s apparently lacklustre efforts to advance India’s Strategic Partnership with the EU and conversely, those in the Indian strategic community harbour largely negative perceptions of the importance of the European Union as a security actor in the South Asian region. Civilian power is equated with weakness and the normative approach is seen as soft imperialism. So, the prospective security cooperation with the EU as a collective remains in the realm of the conceptual.

In the 2004 agreement, India and the EU narrowed their differences on nuclear weapons. India said it abided by the Non-Proliferation Treaty (NPT) though it would not sign it, and would agree to common efforts to contain proliferation of weapons of mass destruction. The EU was then split on the U.S.-India civil nuclear cooperation agreement; it wanted India to join the NPT and Comprehensive Test Ban Treaty (CTBT). UK, France and Germany were pro-India, but not the Nordic members.

India relies on hard power capabilities, and regards multilateral fora as instruments for promoting its national interest. The EU wants to strengthen international organizations and the juridification of international relations. India insists on non-interference, and does not innovate in conflict resolution in its neighbourhood or even outside it, other than participating in UN peacekeeping operations. It does not go in for multilateral approaches or working with non-state actors towards conflict resolution, and so is unlikely to work with the EU in international theatres. It is hard to locate even one example where India and the EU had jointly played a substantial role in resolving any international crisis.

Indian Diaspora in Europe

Politically and publicly, EU and India ties are still below the horizon; there is lack of overlapping spheres of interest, but also lack of knowledge of each other, unlike with the United States, thanks to a highly successful Indian diaspora. And also unlike in the United States, the European Indian diaspora mostly does not comprise the openly ambitious, upwardly mobile, representatives of the upper middle classes. The Indian national profile in Europe is low in comparison to other global powers and India struggles with an image problem partly due to the lack of a strong, non-resident Indian lobby, and Europe remains largely unknown to Indian professionals. What is left is academic research and tourism, and expertise on contemporary India is rare in the EU. The EU situation in India is not much better: outside a few elite institutions, the EU is not much of a topic, and the sparse reports of Indian media about the ‘old’ continent are often of poor quality.

Relations have changed substantially in recent years, from that of aid donor and recipient, to one of partnership. India’s diaspora’s educational achievements and economic status can play a significant role and contribute to Europe-India relations. The growing Indian diaspora in Europe is two million strong. From the mid-20th century, instead of South-South migration, a shift can be noticed in migration from the ex-colonial periphery to metropolitan centres in the industrialized north. It was not the previous type of labour migration but the English educated middle class, which had cultural and linguistic expertise and social contacts to set up collaborations with their home-country counterparts. The second wave following World War II was marked by the emigration of less educated and semi-skilled Indians to English-speaking countries like the United States, Britain and Canada; a characteristic of these migrants was their ability to maintain strong cultural and religious ties with their homeland. The third ICT wave was another distinct category within the new Indian diaspora: it moved to multiple destinations in a transnational space along the networks of the companies for work. Europe is India’s second largest market for ICT services, but it accounts for only 31 per cent of India’s ICT exports (UK with the dominant share of 19 per cent) while the United States accounts for 60 per cent. Indian professionals overseas play a leading role in establishing relationships and India has been a major source of global human capital. Multinational companies are looking for cost-effective employees and the UK is the third destination after the Anglophone countries, Canada and the United States.

The main reasons for issuing residence permits to non-EU citizens in 2009 were family reunification, employment and education. The highest number of permits relating to education was issued to the Chinese and the highest number of permits for employment purposes, including researchers, highly skilled and seasonal workers, to Indian citizens. The Indian diaspora forms a potential resource and can play a positive role in clearing information and perception deficits, facilitating interactions and increasing mutual knowledge. But it has not yet gained any socio-political power within host nations in Europe, and due to its wide dispersion, its overall influence in Europe is rather limited.

There has been an increased effort to work towards a common European Union migration policy. Labour migration into Europe boosts competitiveness and therefore economic growth. Europe has to become as attractive a migration destination such as Australia, Canada and the United States, and to make highly skilled workers change their perception of Europe’s labour market as governed by inconsistent admission procedures. All migrants who come to reside and work legally in the EU should enjoy basic work-related socio-economic rights. The Blue Card Directive, adopted in 2009, would allow the employment of non-Europeans in any country within the EU. Instead of dealing with different national legislations and different visa and work permit requirements, one single permit would be in place. Individual member states can separately decide how many Blue Cards they wish to grant each year and retain the right to refuse candidates.

Indian Defence Ties with Europe

India has the fifth biggest military budget in the world, at US$ 55.9 billion, that it expends on the second largest standing army of 1.18 million soldiers, and a navy and air force in the top five.[10] However its armed forces suffer from a poor teeth to tail ratio with fighting elements outstripped by support units, and 60 per cent of the expenditure is on recurring costs as opposed to capital expenses that deal with modernization and acquisition of new weapons systems. India’s failure to build a strong domestic defense industry base means that it is the world’s biggest arms importer with 65 per cent of its hard and software being sourced from abroad. In addition, most of the acquisitions are done in a muddled manner with no long term strategic planning or inter-service prioritization and long delays have led to huge cost escalations. 

Some EU countries maintain large defense industries despite cutting of military budgets, the absence of domestic orders and perceptions of threat, so export orders become vital. India is the world’s biggest importer of arms, and the EU could expect a reasonable share of the US$ 200 billion that India plans to import in the next dozen years. Defense manufacturing is a high cost industry as advanced technology and outlays on research and development are required. Exports are needed to achieve economies of scale and amortize the costs of development. All EU countries adhere to technology denial regimes (Nuclear Suppliers Group, Wassenaar Group, the Missile Technology Control Regime and the Australia Group) individually and some EU coordination exists on this score. On technology transfer they are all restrictive and the latest generation technology is almost impossible to access.

The Indian Air Force ordered 36 Rafale figher jets from the French company Dassault Aviation for Euro 7.87 billion in September 2016. This photo, by the courtesy of Wikicommons, is in the public domain.

The prospective, though now aborted, merger between BAE Systems of UK and EADS (French-Spanish-German combine that owns Airbus) could be the way of the future to secure Asian markets at a time when European nations are cutting military budgets. There is no synergy between the military sector and security strategy. The UK was worried that BAE/EADS merger could damage the transatlantic special relationship and the arrangement was eventually vetoed by Germany. Despite the BAE/EADS fiasco, consolidation due to mergers and acquisitions have resulted in economies of scale, helping international competitiveness. As a result, complex defence products are seldom purely ‘national’. Although the defense industry is largely privatized, and dealing with individual countries gets diluted, at the political level the commitment of individual governments to the contract can be differentiated. The ‘multinational‘ nature of the European defense industry has facilitated India in its defense procurements.

For a slice of the lucrative Indian defense market, the EU has to contend with an entrenched Russia, and also growing shares in India for Israel and the United States, but India’s interest is to avoid over-dependence on any country. For defense contracts, some level of geopolitical understanding must exist, and it was noted in New Delhi that France has eschewed sanctions against India and is considered a reliable partner. A commercial nuclear deal with the French nuclear giant, Areva, for nuclear reactors and fuel supply was signed in 2009. Importantly, the agreement allowed for reprocessing rights over the spent nuclear fuel from French reactors under safeguards and also provided assurance of lifetime supply of nuclear fuel for these reactors. Moreover, it did not bar the transfer of enrichment and reprocessing technologies and allows India the assurance of a long-term relationship.

Ambassador Krishnan Srinivasan was Foreign Secretary in India’s Ministry of External Affairs, and later Deputy Secretary-General of the Commonwealth. He was educated at Christ Church, Oxford University, and has held fellowships at Cambridge, Leiden, Uppsala, and Calcutta. He has written several books. His non-fiction works are Old Europe, New Asia: Strategies, Challenges, Responses; Europe in Emerging Asia; Diplomatic Channels; Towards the New Horizon: World Order in the 21st Century; The Jamdani Revolution: Politics, Personalities and Civil Society in Bangladesh; The Rise, Decline and Future of the British Commonwealth; and Tricks of the Trade. His novels are: Ambassador Marco's Indian Instincts; The Invisible African; Guesswork; The Ugly Ambassador; and The Eccentric Effect.


[1] “China, France sign deals on nuclear energy, science,” The State Council, China, February 22, 2017. Xinhua report: China and France on February 21 signed agreements on nuclear energy and science during French Prime Minister Bernard Cazeneuve’s Beijing visit. During talks with Cazeneuve, Premier Li Keqiang said China is willing to work with France to deepen cooperation in the whole industrial chain of nuclear energy. He hoped that the two sides would ensure a smooth implementation of the Hinkley Point C nuclear power plant program and discuss joint development of the third-party nuclear power market.

[2] Liz Mohn, Cultures in Globalization (Gutersloh, 2006), 59.

[3] Gauri Khandekar, “The EU and India: A Loveless Arranged Marriage,” FRIDE policy brief  90, Aug. 2011; and Bernd von Muenchow-Pohl: “India and Europe in a Multipolar World,” Carnegie Papers, May 2012, 1.

[4] I.P. Khosla, ed., India and the New Europe (New Delhi: Konark, 2004), 39.

[5] David Malone, Does the Elephant Dance? (New Delhi: Oxford University Press, 2011), 243.

[6] Vidya Nivas Mishra and Rafael Argullol, From the Ganges to the Mediterranean (Gurgaon: Shubhi, 2008), 2.

[7] www.bbc.co.uk/news/world-asia-india-20637124‎

[8] Bernd von Muenchow-Pohl, “India and Europe in a Multipolar World,” Carnegie Papers, 2012, 15.

[9] Indo-EU timetable: 1996 Enhanced Partnership; 1998 Indian nuclear tests; 2000 India-EU summit; 2002 Denmark Summit with major differences; 2003 India terminates ODA from smaller EU states; 2004 Strategic Partnership; 2005 Joint Action Plan; 2006 Security Dialogue; and 2007-13 EU Country Strategy Paper.

[10] Stockholm International Peace Research Institute, April 24, 2017.