EU-India summit: Will the EU manage to sign a free trade agreement with India before Britain?

Last Friday, the 14th EU-India summit took place in New Delhi with both sides to jointly state that trade partnership is approaching rapidly and as soon as all conditions are met. The free trade agreement negotiations have started in 2007 but have not concluded yet as there are unsolved issues related mainly to market access. Apart from trade and investment, Europe and India talked also about clean energy and climate change, combatting terrorism and smart and sustainable urbanization. EU seems to rush up things in order to establish a trade partnership with India before Britain. EU-India trade relations Europe is the largest trading partner of India accounting for more than 100 billion euros of goods and services exchanges. Approximately 6.000 EU firms have been established in India creating five million jobs in India while the same has been done by Indian companies in Europe. EU exports to India include mostly engineering goods reaching 37% while gems and jewellery account for 19%. Furthermore, 20% of EU imports from India are textiles and clothing, 15% are chemical and allied products and 15% engineering goods. Particularly, Doland Tusk, president of the European Council, stated on the relations between the EU and India: “I am happy that today we have agreed to further develop the political dimension of our relationship; that we have agreed to develop our dynamic trade and invetsment relations and that we have agreed to step up cooperation on global and regional issues.” EU or Britain? Will it be the Old Continent which is going to sign first a bilateral trade agreement with India or Britain? The 14th summit between the bloc and India showed that the EU officials are promoting quickly this strategic partnership ensuring that market access for goods is improved by eliminating tariff lines. On the other hand, India is on top of UK’s priority regarding its potential trading and investment partners after leaving the EU in 2019. Therefore, Britain intends to increase exports to India by more than two billion pounds per year. However, Vince Cable, leader of the fourth largest party in the United Kingdom, mentioned that Britain is not going to negotiate a free trade agreement with India. More specifically, Mr Cable stated: “A UK-India FTA is not going to happen. Why should the Indian government give preference to 60 million people when there are 500 million in the EU? When the Indian Government asks if we at going to give more visas, Theresa May runs for the door. If we continue to stay in the EU then we can continue to work on an FTA with India as part of the EU”. Climate change Both EU and India consider climate action as a prerequisite for the future of their societies. They have confirmed the Paris Agreement ensuring the effective implementation of their respective nationally determined contributions. What is more, the Old Continent and India base their future partnership on their mutual collaboration on climate change. EU Energy Union’s Strategy, 2030 energy targets and policies to develop an electricity system in India, which can reliably integrate large shares of renewable energy, are among their goals. Terrorism The leaders of EU and India restated their willingness to combat terrorism and extremism wherever and by whoever committed. As mentioned in the summit, it is imperative that “all perpetrators of terrorism are brought to justice”. The desperate need for actions urged the leaders to proceed to conclusion of the adoption of the Comprehensive Convention on International Terrorism in the United Nations in order to be protected from terrorism and violence. Smart and sustainable urbanization Both sides accepted the fact that EU and India have to deal with increasing urban population. A common endeavour is needed through an India-EU dialogue on smart and sustainable urban development. Moreover, this joint partnership could enable the European Investment Bank to participate aiming to implementation of sustainable urban development related projects. The latter could lead to further development with opportunities on investment. All in all, Europe is creating a great momentum to increase its growth through partnership with India under a free trade agreement the moment that UK shows that is far behind the bilateral trade deals. However, it remains to be seen whether all conditions related to market access are going to be met opening thus a new chapter in the EU-India relationships.