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Why Modi needs to look to Europe now

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Kanwal Sibal
Kanwal SibalOct 14, 2014 | 17:39

Why Modi needs to look to Europe now

Europe is conspicuously missing so far in Prime Minister Narendra Modi’s foreign policy sallies. He has focused first on our neighbourhood, with visits to Bhutan and Nepal. East Asia has thereafter received priority, with his visit to Japan and the visit of the Chinese President to India. In between, with the BRICS summit in Brazil, Latin America got early attention.

That summit, consisting of mainly non-European powers and Russia, which is now stressing upon its Eurasian identity, strengthened the impression that India’s foreign policy priorities were skirting Europe. Modi’s visit to the US as the West’s leading power, while balancing the seemingly Asia-oriented preferences of his government, left Europe out of early signalling of priorities. The Australian prime minister’s recent visit to India again did that. Later this year, Russian President Putin will be visiting India for the annual summit and Modi will be visiting Australia for the G-20 summit and a bilateral visit.

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Trade

He will undoubtedly meet major European leaders at Brisbane, filling the existing gap in contacts with these key world powers. Of course, the UK and French foreign ministers have visited India and called on Modi. The latter, halted at Frankfurt en route to the BRICS summit, planning to meet the German chancellor, but the initiative floundered because of the vagaries of football match results.

The European Union is India’s biggest trade partner, a fact overlooked when China or the US are cited as our principal trade and economic partners. Last year trade with the EU reached 72.7 billion euros. With Europe, unlike China, our trade is balanced; Europe is not destroying parts of our industry because of underpriced exports. Europe is a major source of high technology for us, which China is not. The EU is the highest investor in the Indian economy, with its investment stock reaching 41.8 billion euros in 2012. India-EU trade services stood at 22.7 billion euros in 2012. The FTA (Free Trade Agreement) negotiations with the EU begun in 2007 need finalisation for boosting economic ties.

Europe has been, next to Russia, our principal defence partner, supplying us all forms of high-end equipment. It is vital for balancing our external defence ties and keeping our supply sources diversified. Europe is more liberal in terms of technology transfers than the US, which is why one has to be clear-eyed in tying up with foreign suppliers for co-development and co-production of military hardware as a part of our plans to develop an indigenous defence manufacturing base. Unlike the US, which wants to collaborate with the Indian private sector for defence manufacturing, European countries are willing to partner with our public sector. While the need to involve the private sector in such manufacturing is indisputable for rapid progress in building our indigenous capacities, state control over this vital component of a country’s sovereign function cannot be overlooked beyond a point.

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Negotiation

In transfer of technology negotiations, the state’s bargaining power will be greater than that of the private sector. Our failure is more because of the uncoordinated manner in which we negotiate defence contracts, besides other problems that have corroded our system. Lately, the cancellation of tenders, some after completion of negotiations, has raised doubts in some European defence industry circles about India as a partner. On the cultural front, European countries are active in India, open to our “soft power” and exposing us to theirs. In terms of people-to-people contacts, vital for sustained relationships, Europe leads.

Beyond bilateral ties, the two European countries, France and the UK, are permanent members of the UN Security Council, which means that however ineffective the UNSC is at times and how much it needs reforming, Europe’s role there cannot be ignored. A third European country, Germany, is with us in the Group of 4 (G-4) as a candidate for permanent membership. Both France and UK strongly support India’s candidature for permanent membership, unlike China which opposes artfully and the US which supports artfully. It may be true that those who support us are aware that any Security Council expansion is not for tomorrow and that politically supporting our aspiration can be leveraged to advantage in bilateral relations. Nonetheless, such support recognises the legitimacy of India’s claim and acknowledgement of India’s rising status.

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Acknowledgment

The two European states are nuclear weapon states and hence major players in the non-proliferation related, technology-denial export control regimes whose membership India is seeking. France, with which we have signed a uranium supply agreement, is in position to be India’s leading Western partner in setting up nuclear power plants, much ahead of the US. France was the first country with which we instituted a strategic dialogue following our 1998 nuclear tests, the 26th round of which was held last week. In space, France, has been India’s leading European partner, with Arianespace launching our INSAT series satellites and now India launching the French SPOT satellites, which gives us business as well as recognition as a space power.

In climate ahange or WTO negotiations, India has positions at variance with those of Europe. In these forums, we have to contend with Europe as a negotiating partner. On terrorism and religious extremism, India and Europe have shared concerns, though European is reticent on Pakistan’s terrorist activities directed at us and we have reservations about Europe’s methods to combat extremism in West Asia.

Prime Minister Modi will undoubtedly pay attention now to Europe to boost his development agenda, visiting France and Britain and receiving Germany’s Chancellor Angela Merkel here.

Last updated: October 14, 2014 | 17:39
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