S.Weden will take over the presidency of the European Union Council on 1 January 2023, at an inflection point of change in European and global politics. A change in the President of the Council will affect relations between the EU and countries around the world, including India.
In recent years, India’s relationship with Europe has strengthened qualitatively, and volatile international dynamics, such as simultaneous tensions with China and the need for greater cooperation in the Indo-Pacific region, have added new strategic elements to the partnership. is added. Despite India’s neutrality and Europe’s imposition of nine sanctions packages to punish Russia, effective Differences are successfully managed through better communication and a better understanding of each other’s strategic impulses.
Beyond its closer ties with traditional European powers such as the EU and France, India has also made significant commitments to expand its presence across Europe and strengthened its ties with smaller European countries. creatively enhanced. In this context, the Nordic region, which includes Sweden, Denmark, Finland, Norway and Iceland, has emerged as the brightest spot in India’s relationship with Europe. Bilateral summits between India and Northern Europe have been held on her two occasions, and the United States is the only other country to have summit-level cooperation with the region, with ongoing collective engagement.
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Among the Nordic countries, Sweden has the fastest-developing relationship, with extensive bilateral cooperation in the areas of trade, innovation and the energy transition. In 2018, Sweden hosted the first Indian-Nordic summit under the leadership of Prime Minister Rufen, with Prime Minister Modi being the first Indian leader to visit Sweden in 30 years. In 2019, the King of Sweden visited India. The momentum is building towards the second Indo-Nordic summit in 2022, but against the backdrop of the difficult global situation of post-pandemic economic recovery and war in Ukraine. On the issue of India’s increased oil purchases from Russia, Sweden’s Minister for International Development and Foreign Trade Johan Forssell called it India’s “internal policy” and said Sweden would not interfere. Sweden’s presidency comes at a favorable time for India, given the already rapid progress in relations between the two countries.
The role of the six-month Rotating President of the EU Council often has a decisive and positive impact on Europe-India relations. During the French presidency in January 2022, France prioritized European cooperation in the Indo-Pacific region and hosted the Indo-Pacific Ministerial Forum in Paris. Subsequently, his Czech president in mid-2022 announced cooperation with Taiwan as Europe’s tensions with China coincided with rising tensions in the Taiwan Strait, and again with India’s interest in balancing China. I put it on the agenda. Most importantly, during the Portuguese presidency in January 2021, when relations with India were made a top priority, his historic EU-India summit, which had previously been extended only to the United States, was replaced by his It was held in a 27 + 1 format. This led to a much-needed restart of talks on a free trade deal between India and her EU that had been stalled for almost a decade since 2013. Negotiations have been underway since the resumption of negotiations in June 2022.
The presidency of the Swedish Council could not have arrived at a better time, as Europe battles steep inflation and an energy crisis. Wealthy Nordic countries, with Sweden having the highest GDP, wield great influence at EU level, given their successful national models that combine high levels of economic growth with social welfare. Sweden is one of the most pro-free trade countries in the world and relies heavily on exports for its prosperity. It is therefore not surprising that Sweden has emphasized the need to strengthen the economic competitiveness of Europe among its top priorities during his presidency. be. A French presidency has been good for India through a security lens, but ahead of the French presidential elections in April, the trade deal could affect the constituencies of farmers and other voters. Frozen.
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Swedish companies and technologies such as Ericsson, Skype, Bluetooth and Spotify are household names in India. However, from $2.1 billion in 2018-19 to $1.7 billion in 2020-21, bilateral trade between the two countries declined, out of the total $13 billion in trade between India and Northern Europe. ing. And despite India becoming the world’s fifth largest economy and Sweden’s third largest trading partner in Asia after China and Japan, total trade between China and Northern Europe reached US$70 billion. and the gap with China is huge.
The wider Nordic region, Sweden, and indeed the EU as a whole, sees India as a huge market with great opportunities and potential to promote economic engagement. Therefore, advancing negotiations of an EU-India free trade agreement and obtaining some deliverables on this is firmly on the agenda of her EU presidency in Sweden. Within India, too, there has been renewed impetus for trade deals, as evidenced by the recently signed agreements with the United Arab Emirates and Australia.
Over the years, several mechanisms have been established to facilitate two-way business collaboration such as the Swedish India Business Council and trade promotion campaigns such as ‘Time For India’. At the Uttar Pradesh Global Investor Summit to be held in early 2023, the Government of Uttar Pradesh has invited a number of Swedish companies, taking into account the community interest in an investment worth Rs 15,000.
Still, it is through FTAs that the greatest trade potential can be unlocked, with bilateral trade between India and the EU expected to double from the existing US$110 billion. Therefore, where the Swedish presidency would be most beneficial for India is in the area of trade, where Sweden’s aggressive support could push the boundaries of negotiations and settle some differences. Indeed, just before he took office, Forsell visited India, where Indian Minister of Commerce and Industry, Piyush, met with Goyal, where he said Sweden would act as a “faithful broker” in the negotiations, and that Sweden would be a “faithful broker” of trade tariffs. He said the cut “would be great.” deliverables during his presidency”.
Moreover, the EU-China Investment Comprehensive Agreement is still awaiting approval by the European Parliament, the Trans-Atlantic Trade and Investment Partnership remains frozen in time, and the new U.S. Inflation Reduction Act will end the trade dispute with the EU. At a time of heightened tensions between Europe’s main trading partners China and the United States, these offer opportunities for India to expand its trade with the continent. In fact, Sweden’s own deteriorating bilateral relations with China can be traced back to the Swedish bookseller Gui Minhai being sentenced in China.
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The pandemic and war in Ukraine have forced the EU to rethink its trade strategy through the prism of geopolitics. European experiences with the weaponization of Russia’s and China’s respective energies and markets should be used to strengthen the EU’s value-based relationship, prioritizing deepening free trade with like-minded democracies that abide by the rules-based order. connected to the revival of The potential for supply chains to be weaponized for geopolitical purposes. Sweden, with its unparalleled trend of free trade, is leading this trend, with a particular focus on India. Sweden’s Foreign Minister Tobias Birstrom reiterated that “it is a deadly environment for democracies, especially for smaller ones.” As for India, economist Arvind Panagariya said that rather than respond to China’s border violations by restricting trade ties that would ultimately undermine India’s growth, India would trade her EU and UK agreements through his FTA. recommends that we should expand trade with
It would be beneficial for New Delhi and Stockholm to focus first and foremost on trade and leverage the strengths of their substantive bilateral ties as a basis for greater cooperation at Brussels level to advance common goals. Practical and innovative, Sweden aims to give new impetus to FTA negotiations through its Council Presidency. The road ahead will be bumpy, with long-standing and complex issues around alcohol, agriculture, and cars still unresolved, and an agreement unlikely even in 2023, with no final outcome. The optimism that negotiations will make significant progress is justified.
While there are many reasons to applaud the growing ‘strategic’ aspect of the India-EU partnership, the greatest potential remains in the area of trade, where the relationship will grow to become one of the world’s fastest growing economies and one of the largest. A single market by removing trade barriers and facilitating market access. Therefore, the best way to strengthen and strengthen the relationship between India and the EU remains through concluding an FTA. Until this is achieved, the shadow of an FTA will continue to loom over relations and affect cooperation in other areas.
Shiley Malhotra is a European Associate Fellow of ORF’s Strategic Research Program. Views are personal.
This article originally appeared on the ORF website.