India-European Union Relations in the Light of Historical Institutionalism

Shanza Rehan

Institutionalism is an approach that focuses on the role of international institutions in the international community. They are used to broker treaties and perform different functions. Historical institutionalism is an emerging approach that will be used to analyze the European Union’s relations with India; it is based on the assumption that the international rules, constraints, and responses over a long period construct or predict the behaviors of the political actors during their policy making. 

This is done with the help of the historical context of the previous institutions and their evolution. Phenomenons or social acts such as elections and politics are viewed and understood based on their sociological dynamic and the way they occur. Historical institutionalism does support institutions but is also aware that institutions are only sometimes efficient in their procedure/ result, and it understands that changing norms, rules, and traditions is a long and tedious process. This approach stresses that political development is a process understood over time when it unravels itself. It is positive in its concern that a political spillover effect may come to action and could be significant for social institutions’ growth or development.

The European Union has significantly evolved over time and has adopted many approaches, like functionalism and intergovernmentalism, for its successful integration. The EU-India relationship is recognized under the EU-India Corporation Agreement of 1994. Since 2021, India has been the third-largest trading partner for the European Union. A fruitful strategic partnership has bloomed since the EU’s inception and India’s tremendous market. EU is India’s largest trade market and is crucial in shaping the EU’s engaging plan with Asia.

 India’s exports to the EU also grew steadily from €22.6 billion in 2006 to €45.82 billion in 2018, with the most significant sectors being engineering goods, pharmaceuticals, gems and jewelry, other manufactured goods, and chemicals. Service trade has also tripled between 2005 and 2016, reaching €28.9 billion. India is among the few nations with a surplus in services trade with the EU. Investment stocks from Europe to India reached €51.2 billion in 2015. In an interview with WION, the European Union ambassador, Ugo Astuto, called India its “Natural partner.” With India on its way to becoming the world’s third-largest economy, the EU finds that the bilateral relationship opens progressive opportunities for both states. Converging interest is another term used by the ambassador. Their shared values of democracy and Human rights also link both states closely.

The historical colonial trade roots have influenced the contemporary economic trade between both actors. The India-EU free trade negotiation is a landmark, and its talks are also underway from July 2022; both sides hope to reach an agreement by 2024. Its historical links with the former member, the United Kingdom, are vital. Talks on an EU-India Bilateral Trade and Investment Agreement have stalled after failing to resolve differences related to matters such as the level of market access, manufacture of generic drugs, greenhouse gas emissions, civil nuclear energy, farming subsidies, regulation & safeguards of the financial sector, cooperation on tax evasion, overseas financing of NGOs in India, trade controls, technology transfer restrictions and cooperation on embargoes.

History has proven that economic relations are crucial for a successful partnership in political ties. Still, the European Union has faced difficulties with India’s political stance, especially in the Russia-Ukraine conflict. India finds itself at odds with the European Union in the political aspect. India is more affected by China’s economic and military rise than Europe because South Asia holds a strategic ground, and they grapple with the element of understanding each other’s priorities. Their lack of understanding is evidenced by the absence of action on the 2004 strategic partnership agreement, the 2005 joint action plan, and the absence of the EU-India summit since 2012, which has contributed to the hurdles of both entities.

The difference in policies regarding crises like Ukraine, Libya, and Syria has also contributed. Both aspire for stability in the region, but their strategies significantly differ. The comment by Indian Foreign Minister Subrahmanyam Jaishankar that “Europe has to grow out of the mindset that Europe’s problems are the world’s problems. But the world’s problems are not Europe’s problem. China-India happened way before Ukraine “is an evident fact of distance in approach and indication to Europe’s double standards. China’s economic ascent has more direct implications for India than Europe due to its proximity and an unresolved border conflict. Prime Minister Narendra Modi’s diplomatic signals, rejecting China’s territorial claims in the South and East China Seas, highlight India’s proactive stance. Strengthening political, economic, and military ties with the United States underscores India’s commitment to countering China, even without a formal alliance. In contrast, Europe needs a coherent strategy for Asia.

Global governance is another lacking arena for both, marked by difficulties in practical cooperation on issues like trade liberalization and climate change. Resentment was lingering from India’s role in the failure of the World Trade Organization Doha round conference. While the EU strives to fortify multilateral institutions and uphold its political and human rights norms, India pivots to a more classical foreign policy approach and resists external intervention. History plays a crucial role because India is learning from its mistakes and will not give the colonizers of the world another chance to dominate them like once they did.

The writer is a student of International Relations.