EU Meets India

The agenda for this year's EU-India summit is clear: The EU would like to build up its economic cooperation with India and gain better access to the Indian market. But high import taxes and India's refusal to set binding prices for certain products have been causing problems. Many European companies are therefore reluctant to invest in India.

The Indian state still plays a decisive role in the country's economics, which is why bureaucratic hurdles often impede quick decisions. India is, above all, interested in important key technologies, such as the IT, telecommunications and biotechnology. Additionally, the largest democracy in the world is looking for cooperation possibilities in education and science.

But, according to Manmohan Aggrawal, economic expert from the Jawaharlal Nehru University in New Delhi, both sides need to fulfill certain prerequisites in order to improve their bilateral cooperation.

"The bilateral relations between the EU and India are good," Aggrawal said. "But as far as the world trade on the multinational level is concerned, the Doha talks faltered. The Indians and the Europeans have almost opposing points of view there.

"From India's point of view, the talks should be resumed on a multilateral level," he added. "The Indian government would like to sink the import taxes, but on the way to a multilateral agreement. That is because India's trade is very diverse. It's divided almost equally between the USA, Europe and Asia. Bilateral free trade agreements are therefore not particularly attractive to India."

A popular partner

India is nowadays a much sought after partner. It is seen not only as an upcoming booming economic power, but also as a country beaming with political self-confidence. India counts as a reliable partner and, as a regional power, it is a guarantor of stability in Southeast Asia.

During his visit last year to the Indian subcontinent in March, US President George W. Bush de facto recognized India as a nuclear power. Together with Germany, Brazil and Japan, India has been seeking a permanent seat on the UN Security Council. And, according to Christian Wagner of the German Institute for International and Security Affairs, India's influence on the world stage has actually increased over the past few years.

"India has been increasingly trying for several years to play the role of a major power," Wagner said. "This type of policy has been recognized by the international community. The very fact that the EU is conducting these bilateral summits and that it has established a strategic partnership with India highlights India's increasingly important role as a partner in international relations."

Advantages over China

China -- India's archrival -- was for a long time the focus of European attention. The EU-China summit took place for the ninth time this year. But the two Asian giants are very different from each other.

"I think that many companies have discovered that they can do good business in India," Wagner said. "In addition, India has some advantages over China as far as the legal system and the pervasiveness of the English language are concerned.

"On the other hand, there are problems with its infrastructure," he added. "I think China is ahead of India there. Another aspect is that the high-level service sector is important in India, whereas processing industries play an important role in China."

Within the EU, China has one significant advantage over India because it adopted its liberalization policies before India. Politically, however, India is closer to the EU than China is. According to Wagner, democracy is firmly anchored in India and there are no disagreements on the question of human rights.

Economic pragmatism

India's foreign policy, has nonetheless, caused some irritation in Europe. Even though India sided with the US and against its traditional friend Iran on the question of nuclear energy, and even though India is playing an important role in the restoration of democracy in Nepal, its foreign policy has been occasionally determined by unpredictable economic pragmatism.

India, for example, signed energy treaties with the internationally outlawed countries such as Sudan and Myanmar (Burma).

"India has so far pushed its own national interests -- such as the energy issue -- to the foreground, disregarding the issues of democratization and human rights, which are important to the Europeans," Wagner said. "India's foreign policy is still not animated with the thought of democratic changes, which is what Europeans would like to see. In this respect, India -- like China -- is pursuing a classical great-power policy."