The development of EU-India trade relations

Abstract

This paper retraces key historical events that have influenced the relationships between individual EU member states and India. Building on this foundation, it then explores the evolution of European Union-India relations as a whole. The objective of this study is to gain a deeper understanding of how foreign policy and diplomatic ties have developed over the decades, shaped by shifting political dynamics. Drawing upon academic research and official documents as guiding sources, the study highlights significant milestones, and assesses the current state of the partnership, evaluating its progress and the factors that continue to influence its development. After years of strategic focus on China, scholarly interest has increasingly shifted toward other major powers in Asia, reflecting a broader reassessment of strategic priorities. Likewise, the European Union and its member states have begun to frame the EU-India partnership as a mutually beneficial and increasingly vital collaboration. This shift was largely driven by evolving geopolitical dynamics, most notably, China’s growing global economic influence and to certain extent the rising tensions between Western and Eastern economic blocs. As a result, EU policymakers have been compelled to diversify strategic partnerships to reduce overreliance on China, recognising in India a credible and attractive alternative (Jain, 2023; Poitiers et al., 2021). The paper proceeds by addressing the longstanding disputes between the two regions the proposed Free Trade Agreement (FTA), which has the potential to significantly enhance bilateral economic exchanges and foster advancements in areas such as research and technological innovation. These issues stem from contentious provisions and clauses intended to promote equitable trading practices while safeguarding stakeholders. Disagreements span multiple domains, with the most significant issues relating to India’s environmental standards, agricultural sector, services, labour market regulations all the way to the intellectual property rights (IPR) compliance, often at odds with United Nations directives.

Various scholars assert that India’s primary motivation for pursuing a Free Trade Agreement (FTA) with the EU lies primarily in securing economic advantages. However, other argue that such benefits could similarly be obtained through bilateral agreements with individual EU member states, thereby reducing the necessity of ratifying a comprehensive FTA (Jain, 2023).