The relationship between India and the European Union does not have the same hyper-resonance as New Delhi's other bilateral relations. Yet, as the annual EU-India summit testifies, both sides are engaged on issues of vital importance. The 11th summit, for which Prime Minister Manmohan Singh flew to Brussels last week, was significant for several reasons. Both sides hope to conclude a free trade agreement by the spring of 2011. EU is among India's biggest trading partners. Last year, the two-way trade in goods and services was worth €69 billion. The 27-nation EU is also a big investor in India. The Broad Based Trade and Investment Agreement, in the works since 2007, aims to dismantle tariffs on most products traded by the two sides. Expectations are that it could push bilateral trade to as much as €100 billion. But the negotiations had stumbled on EU insistence over including a clause on sustainable development that would hold trade and investors to strict human rights, particularly labour rights, and environmental standards. India had resisted this. It is unclear if the joint declaration's reference to “significant progress” in the negotiations means the two sides have resolved the issue. The EU had indicated it would not let this condition stand in the way of the agreement, but it is in India's own interests to follow best practices while ensuring adequate protection to the interests of domestic trade and industry and the workforce. Both sides are also trying to negotiate two other major irritants — a dispute over intellectual property rights relating to Indian-made generic drugs, and the resistance of EU member-states to free movement of Indian professionals. The accommodation of Indian concerns on both is crucial to a satisfactory trade agreement.
This was the first EU-India summit to be held after the Lisbon Treaty came into force a year ago. Among other measures, the Treaty aims to raise EU influence in global affairs. Accordingly, the group has been eager to look beyond trade in its relations with India, and give it more political and strategic content. Cooperation in combating terrorism, the situation in Afghanistan and Pakistan, non-proliferation, disarmament, climate change, the role of G20 in global economic governance, and the proposed EU-India agreement on cooperation in the development of peaceful nuclear energy were all discussed at the summit. In recent years, the EU has signalled the willingness to play down what India sees as an overly activist attitude on the Kashmir issue — at this summit, it was not even mentioned. As it seeks to broaden ties with India, much will depend on how the EU tackles the challenge of reconciling the positions of its numerous member-states on important issues to present a coherent foreign policy.