The EU and India share already strong trade and investment ties, with bilateral trade in goods and services exceeding EUR 100 billion; the EU accounts for 22% of India’s FDI inflows. Significant Indian investments have also taken place in the EU. The EU-India Summit on 15 July further emphasized the strength of bilateral ties setting out an ambitious Roadmap up to 2025 for our strategic partnership.
There is certainly scope for the broadening of economic relations. India became the fifth largest economy in the world in 2019. It offers huge market opportunities, with a population of more than 1.3 billion people. The EU is the world’s largest economy, with its 27 Member States forming a single market of 450 million citizens and more than 20 million businesses. Beside vast domestic markets, both the EU and India have strong entrepreneurial traditions. In short, there is enormous potential for both sides to benefit from reinforced trade, investment and economic relations.
In order to boost bilateral trade and investments, the perspective of balanced, ambitious and mutually beneficial EU-India trade and investment agreements remains important. The Summit on 15th July agreed on setting up an EU-India Trade Dialogue at Ministerial level, which will prove instrumental in deepening mutual understanding and fostering collaboration, including when it comes to working towards trade and investment agreements.
The shifting of supply chains worldwide is likely to lead also to more investment opportunities in India, including for European companies. India’s vast and growing domestic market offers a clear advantage when compared to regional competitors.
Broad ranging and substantive exchanges on economic issues are already ongoing between the EU and India. They will gain strength in view of the Indian Presidency of G20, in 2022. The COVID crisis makes it all the more necessary for the EU and India to strengthen their partnership in multilateral fora like the G20 and the WTO, to enhance coordination on global economic governance.
The digital economy is a major priority for the EU. India's digital sector has witnessed remarkable progress in the last few years. With the EU and India sharing common values and similar challenges as fellow democracies, technology co-operation in areas such as 5G and Artificial Intelligence can provide a boost to the EU-India digitisation partnership. The Summit has also indicated interesting pathways to explore in this respect for the EU and India.
The current circumstances in the wake of the COVID crisis, urge us to reflect on our common future. We are facing major, global challenges with severe impacts on our health, lives and environment. The fallout of the crisis is such that we will need investments on an unprecedented scale. Investments directed not only at re-building our economies, to preserve the achievements of the last 70 years, but also at “building better” our economic model, inspired by a new paradigm of growth, decoupled from the unsustainable use of resources.
In this framework, collaboration between the EU and India can be key. We need to make our economies green, climate-neutral, digital and sustainable. In Europe, we want to move away from the old carbon-based economy and become the first climate-neutral Continent by 2050. Our new growth strategy, the European Green Deal, aims at boosting jobs and growth, but also the resilience of our societies and the health of our environment. The European Green Deal as the EU’s recovery strategy shall result in a massive renovation of infrastructure, a more circular economy, a new push towards renewable energy projects, cleaner transport and logistics.
As it happens, all of these areas are also relevant in the framework of the EU-India strategic partnership. The EU and India have already established several co-operative ventures for sustainable modernisation, such as the EU-India Clean Energy Partnership, the EU-India Water Partnership, the EU-India Partnership for Smart and Sustainable Urbanisation, the EU Resource Efficiency Initiative. We are working for a comprehensive dialogue with India on climate change. A statement on Resource Efficiency and the Circular Economy was agreed at the Summit, underscoring our common commitment.
We are now actively encouraging business cooperation in these areas where EU companies can supply cutting-edge technologies to the Indian market and contribute to the transition towards a greener economy. We want to foster research and innovation and create a fertile ground for start-ups to prosper. Let me also note here that in recent years Indian researchers obtained among the largest numbers of Marie Skłodowska-Curie fellowships worldwide and that we have a very healthy flow of students and academics in both directions.
The COVID-19 crisis has sounded a clear alarm. We must act together now, for the sake of future generations. The last Summit has developed a good platform for India and the EU to lead together in this global endeavour. We shall make the most of it.
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