Shape of a partnership

Shape of a partnership


  • India and European Union endorsed a strategy for long-term vision covering security, trade, investment, environment, research and people-to-people contacts.

Important Facts:

  • EU-India Strategic partnership first established in 2004.
  • Since then both countries witnessed a remarkable transformation in cooperation from broader and deeper security, trade, sustainable development to research and innovation ties.
  • For instance, two-way trade in goods and services exceeded €100 billion in 2017 (making the EU India’s largest trade partner) and our € 70 billion in cumulative foreign direct investment provide over 6.5 million direct and indirect jobs in India.

Need for such Establishment

  • Negotiations for a free trade pact, formally called a broad-based trade and investment agreement (BTIA), between the EU and India which was started in 2007 has been stalled due to no progress made on contentious issues.
About BTIA

●        India and the European Union (EU) have been negotiating a bilateral free trade agreement known as the Broad-based Trade and Investment Agreement (BTIA) since 2007. The negotiations cover a wide range of topics including tariff reductions, market access for services, intellectual property rights and investments.


  • Due to increased instability in world affairs, the EU and India have remained staunch defenders of effective multilateral institutions.
  • Demographic advantage such as cheap skilled labor and lack of modernization initiatives in India call for greater bilateral collaboration with developed nations.
  • Science and technology can be further leveraged to accelerate sustainable development both in India and the EU.
  • Moreover, the European Investment Bank (EIB) has a rapidly growing portfolio financing projects in India, helping to address issues such as transportation, energy and access to credit for SMEs.

Contentious issue between India and EU:

  • The BTIA talks between India and EU is stucked due to contentious issues of import duty on European cars and alcohol (wines and spirits) levied by India.
  • India signed bilateral investment treaties (BITs) with several Member States of the EU in order to protect investments. However, in 2016 India unilaterally decided to terminate BITs with 57 countries including the UK
  • However, the EU wants India to sign a single investment treaty with all members as part of the BTIA and wants a number of items suggested in the model treaty removed, including provisions on Investor State Dispute Settlement (ISDS).
  • The EU is of the opinion that there are too many provisions in India’s model BIT which protect the government and go against the interest of the investor.

Way Forward:

  • The EU and India have been working together on the most acute global challenges such as climate change and environmental protection, promotion and protection of human rights, this joint approach will help to pool effectively the efforts and resources to deepen cooperation in all fields.
  • With joint approach both parties can work together to step up bilateral security cooperation to effectively tackle terrorist threats, develop global norms for a free, secure, stable, and peaceful use of the cyberspace and to maintain freedom of navigation and to secure lines of communications.
  • While strengthening these, India and EU must seek to further expand cooperation on biodiversity, ocean governance, humanitarian and disaster relief and outer space safety.
Categories : Test 1 (5004)
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