GS 2: International RelationsGS 3: Economy

For Delhi and Brussels, challenge is to move from breakthroughs to delivery, Pg13

India and EU strengthen ties with new trade, defence, and mobility agreements amid geopolitical shifts and diversification strategies.

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Key Highlights:

  • EU leaders visited Delhi during Republic Day weekend, consolidating the India-EU strategic partnership.
  • The trade agreement with the EU, whose economy rivals China's, is India's most consequential trade arrangement.
  • India and Europe are diversifying partnerships to mitigate risks associated with China and the US.
  • Agreements on trade, defense, and mobility resulted from sustained diplomatic efforts since 2014.
  • India exited RCEP in 2019 and has since pursued trade agreements with Western economies.

Detailed Insights:

  • Post-Independence Era: Europe was viewed through the lens of Russia-West rivalry, and India was seen as protectionist.
  • Modi Government: Resolved bilateral issues, reopened political channels, and revived annual India-EU summits in 2016.
  • Strategic Review: Europe initiated a fresh strategic review of India in 2018, leading to the resumption of trade talks in 2022.
  • New Initiatives: The India-Middle East-Europe Economic Corridor (IMEC) and enhanced security cooperation in the Indian Ocean have expanded horizons.
  • Shared Priorities: India and Europe share priorities like economic reform, defense capabilities, and technology gap reduction.
  • Trade Agreements: India has recently secured trade agreements with Australia, the UAE, the UK, and the European Free Trade Association.
  • Future Focus: India aims to upgrade the Australia agreement, revive talks with Canada, and engage with CPTPP members.

Key Concepts Involved:

  • Trade Liberalisation: Reducing barriers to trade, such as tariffs, to promote economic growth.
  • Strategic Partnership: A long-term agreement between countries to cooperate on political, economic, and security issues.
  • RCEP (Regional Comprehensive Economic Partnership): A free trade agreement among Asia-Pacific nations, excluding the US.
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