全球智库信息集成服务系统

The image of India as an emerging power is widely held, but there is equal reason to see the European Union as an emerging power, too, even at the risk of raising eyebrows. Like India, the EU seeks to become a global political player on top of being a great economic power. As the global power dynamic shifts, both are trying to define their roles in an emerging multipolar world. The question arises whether closer cooperation can help the EU and India to achieve their ambitions. Though they have committed to a strategic partnership, in its present state the EU-India relationship has been likened to a “loveless arranged marriage.” With each increasingly absorbed by domestic problems, the prospects for closer ties are fading, notwithstanding the opportunities that would be lost.

India and the EU do share some traits that, when taken together, none of the other established, emerging, or aspiring great powers display—continental-scale economies and a bewildering cultural, linguistic, and religious diversity all framed in democratic and quasi-federal structures that remain in flux. Yet, while their relationship has a great deal of potential, it has underperformed. The ambitious agenda of their Joint Action Plan, originally signed in 2005 and updated in 2008, is long on shared fundamentals and abstract political objectives but short on specifics and deliverables, and devoid of timelines. Both the EU and India find it difficult to commit to a clear-cut common agenda with specific goals. And there are fundamental deficits on both sides that impede their explicit or implicit global power ambitions as well as their abilities to effectively work together.

In the case of the EU, the deficit is first and foremost a matter of capabilities. Brussels has spelled out its vision for a strong EU role in global governance yet continues to lack the competences necessary to fully exert itself on most political and security matters. This capability gap will continue to limit the scope and intensity of cooperation with India as well as the EU’s other strategic partners.

India’s greatest deficit appears to be less one of ability than of political will. With impressive democratic credentials and a benign record, and as the former standard-bearer of the Non-Aligned Movement, India has earned a high degree of political credibility in most parts of the world on top of its growing economic stature. Still, New Delhi remains wary of assuming global responsibilities that might impose limitations on the options available for pursuing its own immediate national interests. A chronic lack of diplomatic manpower further compounds this reluctance.

Above all else, there is only partial overlap between what each side hopes to get out of the partnership. India and the EU share common objectives, but these relate more to general principles for the global order than to details and deliverables. Geopolitical distance and each side’s preoccupation with its own neighborhood contribute to a lack of genuine shared interests—aside from the fight against terrorism and piracy.

Though the EU and India have built a multitiered institutional architecture to expand their partnership, its substance can still hardly be called “strategic.” To justify that term, it would need to move beyond the bilateral and from dialogue to joint action on a regional or multilateral level. Signing the overdue EU-India Free Trade Agreement is one such step that could help revitalize the relationship. If this project were to be shelved, however, the whole EU-India partnership would slide into long-term hibernation.

To achieve the full potential power of their relationship, the EU and India must push forward on trade negotiations, carry out a critical and frank review of the whole partnership architecture, recruit more stakeholders—from lawmakers and civil society members to business leaders—into the dialogue, and shore up sources of funding for joint initiatives. Without concrete action, the partnership is at risk of stagnation and political marginalization.

India and the European Union—Two Emerging Powers?

Emerging India

More than ten years after the introduction of the acronym BRICs in Jim O’Neill’s famous Goldman Sachs report—forecasting the rise of Brazil, Russia, India, and China—the image of India as an “emerging power,” or, as President Barack Obama emphasized when he addressed the Indian parliament in November 2010, an “emerged power,” has become omnipresent in the media and in policy debates. As the country has been the dominant force in South Asia since its independence, the term obviously refers to projection of power on a global scale. But what does it actually mean to call India an emerged power?

In successive BRICs scenarios, attempts have been made to lay out the global economic landscape until 2050 based on resource allocation, demographics, and other long-term trends. The ensuing logic that economic strength will inevitably translate into corresponding political power finds its most salient justification in the marked increase in China’s political weight, especially after the 2008 financial crisis. Though India lags at least a decade behind China in its overall economic development, it will, it is assumed, follow a similar economic and political growth trajectory on the global stage. Its prominent role in the G20, the new multilateral format of choice for financial and economic crisis management, seems to underscore this view.

Yet in spite of impressive growth rates, increased global market shares, and the deference world leaders show in traveling to New Delhi, India’s importance as a global player remains at least in part derived from expectations of future power potential rather than actual achievements to date. The margin for error increases exponentially with the length of the forecast period. This holds true for the 2050 world economic scenarios, and it should be kept in mind when contemplating India’s political role on the world stage as well.

Whether the world’s largest democracy can realize its full power potential will be determined not only by capacities and capabilities, inherent strengths and weaknesses, but also by its internal political dynamics and its ability to generate political consensus. Though Indians widely believe that their country, as a great civilization of old, needs to reclaim its rightful place at the high table of nations,¹ there appears to be considerably less agreement on what it should do with it. India seems on all accounts poised for great power status—but what kind of a power does it want to be, and what role does it see for itself?

Aspiring Europe

Against the somber backdrop of Europe’s protracted sovereign debt crisis, it may seem at first glance presumptuous to equate India and the EU in an emerging-powers context. Europe appears to be in accelerating decline, not ascent. Its current financial crisis reflects unsustainable fiscal policies and social entitlements, prolonged economic stagnation, loss of competitiveness, and worrisome demographics. Drastic austerity programs in the most affected countries and the seemingly open-ended requests for contributions from their more fiscally stable neighbors to prop up the common currency fuel anti-EU sentiments in the heartland as well as in the periphery and test the union’s political cohesion. While the EU’s unwieldy decisionmaking process absorbs its leaders in their efforts to contain a crisis that threatens to potentially undermine the achievements of decades of economic and political integration, Europe becomes increasingly inward looking and self-conscious. Foreign policy takes a backseat.

Yet in order to keep things in perspective, it might be useful to take a few steps back and widen the visual angle. Whether the sovereign debt crisis will freeze or even partly set back the process of European unification, or whether it will at long last force upon eurozone members the fiscal discipline and common economic policy that have been critically lacking so far, the EU will continue to stand out as the most advanced and successful model of regional integration to date and a remarkable political entity sui generis. It can pride itself on having irreversibly ended in the span of one generation centuries of bitter national enmities on the war-torn continent. After the end of the Cold War, it successfully incorporated Central and Eastern Europe’s formerly socialist economies. In spite of its present calamities, the EU remains an attractive option to most of the remaining European non-members, as Croatia’s recent accession referendum suggests, and an economic magnet for the wider neighborhood.

If gauged with a similar yardstick as India, the EU’s great power aspirations appear less unfounded. True, even before the beginning of the euro crisis, the EU had comparatively weak growth rates, which support the assumption in the 2007 Goldman Sachs BRICs update that only two of the EU’s members would remain among the ten-biggest economies in 2050. But the EU 27 still tops the current International Monetary Fund (IMF) ranking with a combined 25.8 percent share of world GDP (in U.S. dollar terms), or 20.4 percent (purchasing power parity) and remains the world’s largest exporter.² A combined though aging population of over 500 million puts it third behind China and India.

With its unified “single” market, the EU undoubtedly plays in the premier league of great economic powers. Where the treaties give the European Commission exclusive competence or residual powers, the union has assumed a key role in multilateral negotiations, whether in the World Trade Organization’s Doha Round or the Durban climate conference. Though as a non-state entity it is not a full United Nations (UN) member, the EU is signatory to a large number of UN agreements and carries out civilian and military missions under UN mandates. In recognition of its increasing global governance role, the EU has held, since May 2011, an enhanced observer status in the UN General Assembly and its committees, which basically grants it most member rights except for the vote and the possibility to get elected to the Security Council. The EU requested this new status on the grounds of its deepening political integration as marked by the Lisbon Treaty, which aims, among other things, to significantly strengthen the union’s profile in foreign and security matters.

However, Brussels’s much-heralded Common Foreign and Security Policy has repeatedly failed to extend to crucial hot-button issues, leaving the EU internally divided in cases where a unified position would matter. In particular, the bigger member states are unwilling to shed their foreign policy prerogatives and sacrifice national interests for the greater good of Europe’s ability to speak with one powerful voice. Notorious recent examples include the Security Council resolution on the establishment of a no-fly zone over Libya and Palestine’s successful bid for UNESCO membership, where EU countries’ voting pattern covered the whole range of options: support, abstention, and objection.

Different and Not So Different Challenges

At first glance, the hurdles the EU and India need to overcome to fully establish themselves as global powers seem to have very little in common. Just a comparison of the most basic socioeconomic data shows them as a world apart. For all of India’s impressive achievements as the world’s second-fastest-expanding economy, the government’s paramount goal of “inclusive growth” remains elusive for most of its citizens. More than 70 percent of the population lives below the poverty line as defined by the World Bank, and in many key development indicators for health, education, and gender equality India continues to fare worse than sub-Saharan Africa.³ The income-distribution gap has widened further, and more than a decade of growth rates in the range of 7 to 9 percent has made the significant structural, sectoral, and regional imbalances within the Indian economy more visible.

Earlier optimistic postulations of a “demographic dividend” for the coming decades are giving way to growing concerns about a restive youth bulge as the Indian economy’s lopsided structures and excess regulatory baggage have led to the phenomenon of near-jobless growth.⁴ Massive investments are needed to employ India’s young and fast-growing population, flanked by corresponding leaps in providing education and training, and in expanding and modernizing the country’s inadequate infrastructure. Without maintaining high growth rates, India will not be able to lift itself out of mass poverty. The dogged presence of Naxalite insurgents throughout the country’s “red corridor” stretching from the Himalayan foothills of West Bengal to the coast of Karnataka, repeatedly described by the prime minister as the “biggest internal security challenge,”⁵ serves as a drastic reminder that the light of “India Shining” has yet to reach most villages.

Building the political consensus necessary to face up to these immense challenges has never been an easy task in India’s extremely diverse, multiethnic, multilingual, and multireligious democracy and federal union of 35 states and territories to date. While the Indian constitution tipped the balance in favor of the union government, further reinforced by the centralized national planning introduced in the 1950s, that trend has been halted and reversed by the Congress party’s loss of dominance in the 1980s and economic liberalization since 1991. The political landscape has become increasingly fragmented with the surge of regional and caste-based parties, and consequently the centrifugal forces within the political system have gained momentum. The growing probability of further fragile multiparty coalitions at the center does not bode well for a renewed push to enact economic and social reform, and could also hamper India’s ability to conduct a foreign policy that is guided by the greater national interest and long-term objectives rather than short-term domestic expediencies.

The embarrassing last minute veto by West Bengal’s powerful and prickly Chief Minister against the Teesta river water-sharing agreement with Bangladesh was a case in point. Considered a crucial confidence-building measure for stabilizing India’s rapprochement with its long-estranged neighbor, it had been part of a package that both sides had negotiated for months and readied for signature during Manmohan Singh’s high profile visit to Dhaka in September 2011. Claiming that she had not been sufficiently consulted on the issue directly affecting her state, Chief Minister Banerjee cancelled her participation. As the Singh government needs the votes of her party to maintain a parliamentary majority, it could not afford to override her objection. The water treaty was shelved, and the irritated Bangladeshis took a commercial transit agreement off the table in return.

While domestic politics are more likely to directly influence India’s dealings with the near abroad, its future role in the larger Asia-Pacific region and on the global commons remains the subject of intense policy debates in New Delhi, echoing through the media. Relations with China and the United States and the degree to which India can get closer to one and reassert itself toward the other take the spotlight, at least for now. Below the surface, however, looms a more fundamental controversy about India’s long-term national interests and what kind of a foreign policy strategy ought to be adapted in their pursuit. This debate reflects the difficulties of reconciling principles upheld since independence and thus imbedded in India’s foreign policy DNA with the political and economic realities of the post‒Cold War world and its own changing objectives and priorities.

Few voices argue today for reconnecting to India’s Nehruvian identity and embracing its former role as stalwart of Third World solidarity.⁶ The necessity for plowing an independent path between opposing ideologies and global alliances may have long vanished—the foreign policy principle formulated to this end, however, continues to enjoy overwhelming, if not unanimous support. The idea of “strategic autonomy” connects the post-colonial period of the Non-Aligned Movement with India’s quest for global power status in the twenty-first century, and has been reiterated by BJP- and Congress-led governments alike. Elevated to an “article of faith” by Prime Minister Manmohan Singh,⁷ its essence has been summed up as “engaging with all major powers, but aligning with none.”⁸

In the globalized world of the twenty-first century, the range for undiluted application of this principle—if it was ever possible—is shrinking. It can also be argued that India, at least in multilateral settings, adheres to it only selectively, and that it has replaced its former commitment to the common cause of the developing world through the G77 and similar larger groupings with a preference for “global governance by oligarchy”⁹ through aligning, wherever possible, with the other major emerging economies Brazil, China, and South Africa as well as with Russia in the format of either IBSA, BASIC, or BRICS. Whether these instances reflect only temporary expediency considerations or suggest indeed an emerging new foreign policy axiom—the more India reaches out to position itself as an emerging global power, the more it will need to reexamine, expand, and, where necessary, readjust established dogmas to the demands of this new role. In the past, New Delhi’s multilateral stance was often motivated by the real or perceived necessity to preempt or counter the unilateralism of others. It was shaped by varying combinations of immediate national interests and of what India believed it owed to its Gandhian legacy as the “conscience of mankind.” Today a rising India, in the words of its national security adviser, “must be willing and capable of contributing to global public goods in terms of security, growth and stability that the region and the world require.”¹⁰

While India is testing the waters for a new global role, the EU needs all hands on deck at home. The threat to the union’s common currency and its financial sector caused by some member states’ excessive levels of debt undoubtedly represents the gravest crisis for the union as a whole since its inception. What surfaced in early 2010 as the presumably isolated problem of unsound Greek public finances has increasingly dominated the European agenda on multiple levels, crowding out other important policy issues. It saps the EU’s financial resources and weakens its resolve to deal with arising external problems in an effective and timely manner. It is changing the external perception of Europe from a zone of wealth and stability to a continent in crisis looking for handouts from abroad. The EU’s unfamiliar new role as a supplicant among its peers at G20 gatherings or at the IMF cannot but affect the political capital it expects to leverage elsewhere.

Aside from missing fiscal coordination, the debt crisis has also exposed the EU’s considerable internal economic imbalances. Despite decades of massive financial infusions through the structural funds making up the bulk of Brussels’s expenditures with the goal of leveling regional disparities and equalizing the standard of living throughout the union, old divides persist and new ones have opened up since the introduction of the common currency. The widening gap between the haves and the have-nots among the member states might have been temporarily covered up by profligate government spending, generous social policies, or short-term phenomena like the real estate bubble, but it became all the more apparent once the debt crisis started to unfold. At the core appears the issue of competitiveness.¹¹

The difficult dual task of forcing fiscal consolidation while avoiding imminent recession is likely to deepen the EU’s North-South divide further, at least in the short term. In addition, there is growing uneasiness in some of the member states about how the two biggest economies of the eurozone, Germany and France, in their attempts to calm nervous financial markets, have taken to dominate the agenda and forestall collective summit decisions. Though there is unanimity on the seriousness of the predicament and the need to act quickly and decisively, following this through paradoxically could drive the EU members further apart instead of closing their ranks, offsetting the momentum toward a common fiscal policy.

After all, the debt crisis, connected to the global financial turmoil of 2008–2009, comes on the heels of the failed EU constitution project, which was replaced by the less ambitious Lisbon Treaty. Both events have adversely affected the EU’s image in the world as well as its own self-confidence and seem to vindicate euroskeptics and opponents of deeper integration. Yet most observers concur that only a closer union will preserve European prosperity and help avoid global marginalization in the long run. To overcome the disconnect between Europe’s political elite and wider public sentiment that led to the rejection of the constitutional treaty by the French and Dutch electorate will remain a key challenge for the EU’s further evolvement and might require something of a “participatory revolution to boost legitimacy for integration.”¹² What that would entail remains unclear—and whether national governments and parliaments are prepared to give their blessings to more fundamental changes in the EU architecture that would reassign them from leading roles to supporting acts.

For the EU’s foreign and security policy, the more immediate challenges concern matching ends and means, defining priorities, and allocating available resources accordingly. The optimistic outlook on the EU’s own potential contributions to making the world a safer place that characterized the post–Cold War phase of rapid enlargement has in general given way to a more guarded and realistic assessment of Europe’s role, its strengths and limitations, in the emerging new peer configuration. How far the union’s focus can geographically extend beyond Europe’s southern, southeastern, and eastern perimeters will obviously also depend on the EU’s ability to regain its economic footing.

Another prerequisite for the EU’s ability to become a political heavyweight and project its power, be it soft or hard, on a global scale is the further evolution of its own institutional architecture. Its very heterogenic composition, likely to increase with further accessions, and its established modus operandi of “incremental reform through treaty change,”¹³ underline the crucial importance that the EU’s objectives and the steps necessary to attain them are supported without reservations in Europe’s capitals and sufficiently backed by public opinion. Europe must first bring its house in order, but it also needs political consensus to become more than it is—certainly more than the sum of its parts.

Similar Features, Different Prospects?

As different as the EU and India may be, they share some character traits which, taken together, none of the other established, emerging, or aspiring great powers display, and which define their political identity, shape their worldview, and affect foreign policy objectives and the tactics for pursuing them. Under the same motto of “unity in diversity,” both India and the EU represent multicultural and multireligious, democratic, and quasi-federal structures with 27 and 28 states, respectively, of vastly differing size and weight in which 23 official languages are spoken.

In the EU as well as in India, the political structure is young and still evolving. While the EU is poised for further enlargement and, despite recent setbacks, remains tilted toward deeper integration by its inherent dynamic, India’s union continues to grow by carving out new states to recalibrate the delicate political, religious, ethnic, linguistic, and demographic balance. Equating both processes, one Indian commentator remarked in 1993: “Instead of regarding India as a failed or deformed nation-state, we should see it as a new political form, perhaps as a forerunner of the future. We are in some ways where Europe wants to be, but we have a tremendous job of reform.”¹⁴

As the tectonic drifts of the twenty-first century shift global power from West to East, from North to South, from the Atlantic to the Pacific region, as so-called nontraditional security threats ranging from terrorism to climate change and energy dependency increasingly dominate risk assessments, and as globalization and technological progress stress the growing importance of soft power vis-à-vis exclusive reliance on hard power, both the EU and India are trying to define their roles in an emerging multipolar world. Though their points of departure are different, opposite in some aspects, some identical questions apply to both. Will they be able to become global strategic players in the full sense of the word? Will they be able to project power and assume corresponding responsibilities as “managers of global order” beyond their region and their more immediate neighborhood? Looking at the state and the potential of the relationship between India and the EU sheds some light on these questions as well as the role this relationship could play in the larger context.

Evolution of the EU-India Relationship

Overcoming the Colonial Legacy

From the arrival of the Portuguese on the Malabar Coast to independence and the epilogue of India’s annexation of Goa in 1961, the colonial chapter in the relationship between Europe and the Indian subcontinent spans more than four and a half centuries. While Europeans early on encroached politically and militarily to advance their trade interests like other intruders before them, it was the British Raj with its much deeper penetration that molded India’s colonial experience from near-total economic dependency to the traumatic experience of partition. India’s post-independence identity and understanding of its role in the world were profoundly shaped by colonial exploitation and the resistance against it. Despite the recognition of important constitutive legacies of British rule like Westminster-style parliamentary democracy, military deference to civilian leadership, an independent judiciary, and a vibrant free press, the narrative of the colonial experience in textbooks and media continues to contribute to a lingering political undercurrent of mistrust toward “the West.”

Nevertheless, Europe played a premier role in the first two decades after independence, from established trade patterns to India’s military procurement in the face of growing tensions with Pakistan. In 1963, India was one of the first countries to establish diplomatic relations with the European Economic Community (EEC). Ten years later, when Britain—India’s most important trading partner at the time—joined the original six EEC members, India’s loss of imperial trade preferences led to its first commercial cooperation agreement with the community.

It took both sides another twenty years to sign their first political declaration after the EEC morphed into an enlarged European Union of then twelve member states. In 2000, India’s raised economic and political profile and the EU’s post–Cold War desire to extend its newly defined political mission beyond the confines of the European continent brought about the first EU-India summit meeting in Lisbon. The summits have been held annually since.

Trade and Aid

Trade continues to be the backbone of India’s relationship with Europe. While India’s postcolonial “mixed” economy with its strong focus on import substitution and its comparatively modest growth rates led to a partial retrenchment from the global economy,¹⁵ Europe remained the most important destination for Indian exports and the main source of India’s imports. This position has, however, been in steady relative decline in spite of solid growth in absolute terms. Whereas Western Europe accounted for 37 percent of Indian trade in 1960–1961,¹⁶ the combined share of the EU 27 has fallen to 15.6 percent.¹⁷

The EU still ranks as India’s foremost trading partner, but it will likely be dethroned in the near future with China likely to become the main source of Indian imports if current trends persist. India’s overall share of EU trade remains modest at 2.4 percent, which now places it ahead of South Korea and Brazil. The stagnation and recession forecasts for some EU countries could further erode the importance of trading with Europe for India, and appear to vindicate New Delhi’s efforts to open new markets and diversify exports through trade promotion programs targeting the Middle East, Africa, and Latin America especially.

Unlike India’s unbalanced trade with China, depending mainly on exports of raw materials and resulting in a large and widening deficit gap, the exchange with Europe reveals a high degree of economic complementarity in the composition of exports and imports. Indian exports to the EU have consistently moved up the value chain, with the largest share now held by the product category of machinery and transport equipment. Yet Europe needs strong trade growth both in quality and quantity if it wants to defend its pole position in India. The recently reported 20 percent increase in both directions for the first three quarters of 2011 were a positive surprise, but unlikely to be repeated in 2012. A timely conclusion of the “broad-based” Free Trade and Investment Agreement, discussed since 2005 and under formal negotiations since 2007, could alone provide the momentum needed for a quantum leap in the EU-India economic relationship.

Aside from being India’s most important trading partner and largest investor,¹⁸ the EU also tops the list of the country’s aid donors. Like the bilateral development cooperation programs of the EU member states, the programs managed by the European Commission have undergone significant changes since the first food aid was sent to India in the late 1960s. One of the largest and longest-running