• to the EU were valued at €11.22 billion and Indian services imports from the EU were valued at €12.70 billion, reflecting a trade balance which continues to be slightly in favour of the EU by €1.48 billion in 2013 as against €0.5 billion in 2012.
• The EU is one of the largest sources of Foreign Direct Investment (FDI) for India. FDI inflows from the EU to India were €5.48 billion in 2012 and €3.2 billion in 2013. Indian investments in the EU28 were €0.4 billion in 2013. The most important EU countries for FDI inflows into India in 2013 were the UK and Germany (with both investing €0.9 billion each), followed by Italy (€0.6 billion) and Belgium (€0.2 billion).

Strategic Importance

• Though as a non-state entity it is not a full United Nations (UN) member, the EU is signatory to a large number of UN agreements and carries out civilian and military missions under UN mandates. In recognition of its increasing global governance role, the EU has held, since May 2011, an enhanced observer status in the UN General Assembly and its committees, which basically grants it most member rights except for the vote and the possibility to get elected to the Security Council.
• India can secure some friends for support regarding its claim for permanent seat in the Security Council.
• EU can provide  a counterbalance to the emerging hegemony of US in the world.

The Way Ahead

Like India, the EU seeks to become a global political player on top of being a great economic power. As the global power dynamic shifts, both are trying to define th“Europe is a key trading partner of India and very important investor of capital. It is important, however, that the levels bilateral trade between India and Europe be improved. Further transformation of the India-EU relationship would require a two-pronged strategy of sustaining traditional links and also exploring new linkages, for instance, in knowledge industries i.e. information technology, biotechnology, pharmaceutical etc. In political terms, the relationship has already seen steady institutionalization, with Summit-level interaction between India and the EU. The strategic partnership between India and the EU is based on shared values such as democracy, pluralism and liberalism-all values of open, inclusive societies.”

• The relations between India and European Union (EU) have been historically cordial, withdiplomatic relations going back to 1962.
• The relationship has evolved only in the periodafter the Cold War ended. In 1996, the EU and India signed an Enhanced PartnershipAgreement, leading to the first summit in 2000 in Lisbon.
•  India is one of the few selectcountries in the world with which EU has regular summit level meetings.
• The 2004summit in Hague was important because it was there that India and the EU decided toelevate the relations to the level of Strategic Partnership, and in 2005 agreed to a JointAction Plan (JAP). The JAP has laid down the foundation of India–EU Strategic Partnership Agreement.
•  India and the EU have evolved a common platform of interaction,which is, however, not stable when it comes to global forums. For example, both India andthe EU have adopted different parameters based on their respective national interests whileinteracting at the level of climate change, WTO, and so on. Despite these differences, therelationship, otherwise, stands in good stead. This is also because at the bilateral level with
• France, Germany and the UK, India has strategic partnerships which have added depth tothe overall relations with the region.

Political Dialogue

The first India-EU Summit took place in Lisbon in 28 June 2000 and marked a watershed in the evolution of the relationship. Since then, fourteen annual Summits have been held, the last one in New Delhi in October 2017.

Areas of focus were:

Bilateral Trade and Investment Agreement

• cooperation in the field of security, and
• Finalization of an agreement on R&D cooperation in the peaceful use of nuclear energy.
• Research and
• Innovation Cooperation and Enhanced Cooperation in Energy.

Importance ofEUfor India

Economic Importance

• EU 27 tops the current International Monetary Fund (IMF) ranking with a combined 25.8 percent share of world GDP (in U.S. dollar terms), or 20.4 percent (purchasing power parity) and remains the world’s largest exporter
• With its unified “single” market, the EU undoubtedly plays in the premier league of great economic powers. Where the treaties give the European Commission exclusive competence or residual powers, the union has assumed a key role in multilateral negotiations, whether in the World Trade Organization’s Doha Round or the Durban climate conference.
• The EU as a bloc of 28 countries is India’s largest regional trading partner while India was the EU’s 10th largest trading partner in 2013.
• India and the EU are in the process of negotiating a bilateral Broad-based Trade and Investment Agreement (BTIA) since 2007 which will significantly enhance the commercial relationship once implemented.
• Bilateral trade in goods registered a decline of -4.09% in 2013, being valued at €72.70 billion as compared to €75.80 billion in 2012. Indian exports to the EU amounted to €36.8 billion during 2013 as compared to €37.33 billion in 2012, showing a decline 1.42%. India’s imports from EU stood at €35.9 billion in 2013 as compared to €38.47 billion in 2012, showing a decline of 6.68 %.
• Bilateral trade in services was €23.9 billion in 2013 as compared to €22.5 billion in 2012, thus reflecting an annual growth of 6.22%. India’s services exports eir roles in an emerging multipolar world. The question arises whether closer cooperation can help the EU and India to achieve their ambitions. Though they have committed to a strategic partnership, in its present state the EU-India relationship has been likened to a “loveless arranged marriage.
• Both the EU and India need to commit to a clear-cut common agenda with specific goals. And overcome fundamental deficits on both sides that impede their explicit or implicit global power ambitions as well as their abilities to effectively work together.

Issue of contention between India & EU

• Since 2007, India and the EU have been negotiating a Bilateral Trade and Investment Agreement (BTIA) or the FTA. However, the BTIA/FTA negotiations have not yet delivered the results as of now. Even up till 2017-18, the BTIAhas been stuck on a number of issues and no final agreement has been reached.
• Another issue holding up the trade talks has been the EU not granting “data secure” certification to India — a condition that facilitates the cross-border transfer of personal data, key to a number of companies’ services, especially in the IT industry.
• It will be no easy task for the government to align its laws to a standard required by the EU to get the appropriate certification.
• The movement of skilled workers from India to developed countries is made difficult with barriers to overcome in terms of salary thresholds, recognition of qualifications, visa fees, social security and so forth.

14th EU India Summit in New Delhi

• The 14th annual Summit between India and the European Union (EU) was held in New Delhi on 6^thOctober 2017. The Republic of India was represented by Prime Minister. The EU was represented by President of the European Council, and President of the European Commission.
• The leaders reviewed the wide-ranging cooperation under the India-EU Strategic Partnership. Recognising that India and the EU are natural partners, the leaders reaffirmed their commitment to further deepen and strengthen the India-EU Strategic Partnership based on shared principles and values of democracy, freedom, rule of law and respect for human rights and territorial integrity of States.

Changing environment in EU since Brexit

• Much has changed for the EU since the last summit held in Brussels in 2016: Brexit; several key elections, including in France and Germany; and visible rifts between eastern and western European countries on what core EU values are and should be. The inauguration of new presidency in U.S. and consequent retreat of America from its leadership role in the West has provided a significant external stimulus to the EU’s identity shift.

Outcomes of 14^th annual Summit between India and the European Union

• India and the EU reaffirmed their commitment to a “rules-based” international order and a “multipolar” world. This is significant in the context of the U.S. moving towards back out on several international deals. 
• The leaders confirmed their commitment towards conflict prevention and sustaining peace as fundamental aspects of promoting security and prosperity.
• The India-EU joint statement on terrorism this year called for “decisive and concerted actions “against Hafiz Saeed, Dawood Ibrahim, Lashkar-e-Taiba and other sources of terror. 
• The two sides expressed support to the Government and the people of Afghanistan in their efforts to achieve an Afghan-led and Afghan-owned national peace and reconciliation.
• India and the EU reaffirmed their commitment to enhance maritime security cooperation in the Indian Ocean and beyond. Both sides noted the recent joint manoeuvres (PASSEX) between the EU Naval Force and the Indian Navy off the coast of Somalia, as a successful example of naval cooperation. 
• Both leaders attached importance to the security, stability, connectivity and sustainable development of Oceans and Seas in the context of developing the “blue economy”.
• India and the EU reiterated the importance they attach to human rights cooperation, including on gender equality and women empowerment in all spheres of life.
• India and the EU agreed to strengthen cooperation in skills development and agreed to find complementarities and synergies between India’s Skill India initiative and the EU’s New Skills Agenda for Europe.