Context: A high-level ministerial dialogue to boost trade and investment relations, commitment to remove trade hurdles and expand market access are part of the new broad-based strategic partnership adopted between India and the European Union (EU) recently. 

More on the news:

  • The India-EU agreed to optimally use the Investment Facilitation Mechanism (IFM) established in 2017 to promote inbound investments from the EU.
  • The strategic partnership objectives formed a key part of the announcements at the 15th India-EU Summit and are set to guide ties between India and the bloc over the next five years.

Key announcements of the summit:


Source: BS

  • A high level dialogue: Between the Commerce Minister of India and E.U. Trade Commissioner to try and take the Bilateral Trade and Investment Agreement (BTIA) (a free trade agreement that has been suspended since 2013) forward.
  • Continuing the regulatory dialogue on pharmaceuticals and medical devices that will align products with international standards and remove quality barriers to active pharmaceutical ingredients and medicine exports (a key Indian demand). 
  • Obstacles related to sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) will also be regularly flagged and reduced.
  • To speed up cooperation on agricultural and marine trade, reduce customs hassles, protect intellectual property and geographical indicators, and foster cooperation between small businesses and start-ups.
  • In the security space, closer military ties have been pushed with a focus on establishing regular security consultations that will exchange information on strategic priorities, security issues, crisis management, and peacekeeping. 
  • Early conclusion and implementation of a working arrangement between Europol and the Central Bureau of Investigation (CBI) has also been agreed upon. 
  • More convergence between the regulatory frameworks governing cross-border data flows and privacy issues. 
  • Make utmost efforts towards reaching an agreement on taxation of the digital economy, with widespread consequences for internet giants like Google.
  • Green focus: India has called for more European investments in India's renewable energy sector.
    • On climate change, the EU is building on its ambitious target to render the continent carbon-emission neutral by 2050, through its new industrial strategy, the Green Deal.
    • Both sides also announced the formulation of long-term low greenhouse gas emission development strategies and to restrict the increase in global average temperature to well below 2°C above pre-industrial levels.
  • A civil nuclear research and development cooperation agreement between EURATOM and the Department of Atomic Energy.

Importance of India-EU partnership:

  • EU a natural partner for India: A partnership between the two is required for maintaining global peace and stability. 
  • Covid-19: In the wake of the Covid-19 pandemic, new economic challenges have emerged on a global scale and more cooperation between democratic nations was the need of the hour. 
  • Relieve pressures on the rules-based international order: Through economic and human-centric development brought forward by the partnership.
  • Trade relations:
    • Trade with India formed under 3% of the E.U.’s global trade, which is far below the potential. 
    • Conversely, the E.U. is India’s largest trading partner and investor, and accounts for 11% of India’s global trade.
  • The cooperation on global forums: E.U. had welcomed India’s election to the U.N. Security Council and highlighted that India’s role would be important in reconciling the UNSC paralysed by vetoes and infighting.


  • India’s inclination towards protectionism: The Make in India programme was accelerated by the COVID-19 crisis and recent pronouncements that India wants to go ‘Self reliant’ with the recent launch of  Atmanirbhar India. 
    • However, India made a statement that Atmanirbhar Bharat would be open to the world and should be music to the ears of European companies.
  • Reservations about model Bilateral Investment Treaty: The E.U. has reservations about the model Bilateral Investment Treaty (BIT) that New Delhi has proposed, especially on dispute mechanisms in Indian courts.

            Source: 5th Voice news

It is time for India-EU, especially with the signs of COVID recession and an aggressive China, to leverage each other’s strengths and push better economics between India and the EU.

Bilateral Trade and Investment Agreement (BTIA)

India and the EU began negotiations on a broad-based BTIA in Brussels, Belgium in 2007, 

pursuant to the commitment made by political leaders at the 7th India-EU Summit held in Helsinki in 2006, based on the report of India-EU High Level Technical Group.

BTIA covers:

Trade in Goods, Trade in Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Remedies, Rules of Origin, Customs and Trade Facilitation, Competition, Trade Defence, Government Procurement, Dispute Settlement, Intellectual Property Rights & Geographical Indications, Sustainable Development.


  • Removing barriers to trade in goods and services and investment across all sectors of the economy. This will help in promoting bilateral trade between India-EU.
  • Open new markets and expand opportunities for Indian and EU businesses.


  • Stalemate since 2013 over: 
    • EU demands: Such as greater market access for automobiles, wine and spirits, and further opening up of the financial services sector such as banking, insurance and e-commerce.
      • The EU also wanted labour, environment and government procurement to be included in the talks.
    • India’s demand: For easier work visa and study visa norms as well as data secure status, that would make it easier for European companies to outsource business to India.


Image Source: TH