Evaluating Narendra Modi’s visit to EU and the Indo-Nordic Summit: Many hits, some misses

Prime Minister Narendra Modi’s visit to three European countries and participation in the Indo-Nordic Summit at Copenhagen have prompted much celebration and ​speculation. Yet, the significance of India’s current purposeful engagement is not entirely clear at first sight. There are some identifiable policy outlines that indicate renewed stress on some existing issues, among them climate change and allied green technological solutions like solar power, environmental protection, with India highlighting sustainable need-based living rather than wealth and consumerism.

The context outlined for the agenda is post-pandemic recovery though consigning it to the past may turn out to be optimistic, as China’s ongoing COVID-19 setback is demonstrating. But there is also a significant political backdrop to the visit owing to the war in the Ukraine and the harsh light it is shining on global policies and commitments of key actors like the US.

The emphasis on India’s relationship with the two key countries of the European Union, Germany and France, is not new though the renewed stress on the Nordic countries is perhaps somewhat novel. The first two are the giants of the European Union, but the economies of the Nordic latter, taken together at $1.8 trillion, are more than half of India’s and not to be treated cursorily.

The apparent motive for a more meaningful dialogue with the two principal EU players stems from an urgency to diversify the portfolio of India’s major global relationships owing to the hard realities brought home to the South Bloc by the Ukrainian conflict.

It has highlighted worrying uncertainties and underlined questionable US commitment to allies, willingness to use them as an instrument of its own policy as well as tearing up of the rule book on the international economic architecture when it suits US immediate interests.

The visits to Germany and France sought to cement the expanding relationship through agreements on a host of issues. India and Germany have improved relations since its condemnation of India’s nuclear tests in 1998 with a visit to India by the German Chancellor in 2008.

Both countries have concerns about the security of Indo-Pacific supply chains, Beijing’s assertive regional policies, share the G4’s aspirations to permanent security council membership. They also cooperate on myriad issues like rural and MSME banking. The India-Germany Strategic Partnership underlines a major emphasis in the deepening of relations between the countries and Germany remains, by far, India’s largest trading partner in Europe.

India and France, which has assumed the EU presidency this year, have long enjoyed meaningful ties. France has become India’s second largest supplier of military hardware, including the recently inducted Rafale.

In general, three broad areas of Indo-French collaboration endure in defence, space and nuclear power. One specific area of cooperation has been India securing a supply of uranium, essential for multiple uses and thereby diversifying its sources of supply and from another reliable partner. It is the interconnection between purchase of the Rafale and securing uranium supplies that the Modi government refused to expose, despite a political campaign by the Congress party to extract full disclosure of all elements of the Rafale’ fighter’s pricing, despite the imperative of confidentiality.

India has also concluded an agreement to acquire six nuclear reactors manufactured by France’s EDF, capable of supplying the energy needs of seventy million households. France, which is an Indo-Pacific power, and India also share concerns about the freedom of the seas and China’s rise to power, necessitating naval cooperation between them, as in the case of Germany as well. In addition, France and India have fears about Islamic radicalism and the need to offer mutual support for resulting political and security perspectives.

The great impending prize will be an India-EU free trade agreement apparently poised for conclusion. It will connect India with a $18 trillion dollar economic and technological but politically less confident powerhouse that is trying to find a new voice in the world and keen to reduce dependence on China in the aftermath of COVID.

On the differences between the EU and India over Russia, both sides understand the rationale for the positions taken by each on the issue. Oddly, circumstances might allow France and India to play the role of intermediary between Russia and the Ukraine given French political salience in the EU and India’s traditional good relations with both the combatants. As the cost of the Ukrainian campaign rises Russia may wish to eschew conquest of the Ukraine in entirety and settle for an outcome that satisfies its security concerns in part.

However, despite EU pressure, India is unlikely to take a robust stand on the Ukrainian conflict, participate in economic sanctions against Russia or abandon the proposal to purchase oil from Russia at discounted prices. Significantly, the price below $70 a barrel being negotiated by India with Russia is the price point assumed for its growth projections in its recent budget.

The visit to Denmark itself was opportune and reciprocates Prime Minister Mette Frederiksen’s in October 2021. A host of issues were covered in discussions between officials, ranging from climate change and the associated solar alliance to water supply, river rejuvenation and digitisation, among other issues. The second Indo-Nordic Summit in Denmark, with regional governments, after four years since the first, also focused on issues of mutual interest like climate change, renewable energy in the context of post-pandemic recovery as well as the contemporary global security situation.

It is a well-rehearsed familiarity that the Nordic countries punch above their individual weights in some of the issue areas above and possess critical niche technologies that have disproportionate potential impact. These advanced technologies of the five Nordic countries in critical areas exhibit increasing returns to scale which India’s market size can underwrite, comparable to the situation vis-à-vis Israeli defence sales to India.

It is also good sense to engage with smaller Nordic countries that espouse a global welfare perspective relating to sustainable green development, associated climate change and renewable energy rather than a narrow commercial one. Their niche technologies and experience in these areas can constitute a valuable supplement to India’s climate change and environmental agenda, which is now being implemented with greater purpose.

In addition, an invitation was extended to national wealth and pension funds to invest in India especially in the infrastructure sector and these, like Norway’s, possess very substantial amounts. There is also an advantage in dealing with prosperous smaller countries that will not leverage their size and political clout to adopt unreasonable policy postures.

However, despite the euphoria and a degree of Indian penchant for hyperbole, evident in the proceedings of the recent Raisina Dialogue, it would be well to remember opportunities are not the same as established facts and there is a veritable mountain to climb to realise India’s ambitious goals. The extant reality is the vast distance which separates Indian aspirations, highlighted during Prime Minister Narendra Modi’s visit, and the huge current dominance of China in EU international trade and investment relations.

China was the EU’s largest trading partner in 2021, its value reaching $828 billion, rising by more than 27 percent over the previous year despite the COVID-19 pandemic. EU investment in China cumulatively between 2001-2019 had reached $1,100 billion and Chinese investment itself in the EU amounted to $940 billion.

By comparison, India-EU trade was a mere $66.1 billion in 2020 and total EU cumulative foreign direct investment, the overwhelming majority of its investment in India, was $88.2 billion between 2000 and 2021.

In fact, China is India’s largest trading partner, ahead of both the US and the EU. Quite clearly, India has only begun an arduous journey to make the EU a significant trading partner and that will also depend on its own domestic economic advance and continuing propitious global political circumstances. The consolidation of India’s optimistic growth trajectory is still to become a proven reality. The country is experiencing serious political instability, riven with self-destructive no-holds-barred power struggles, though the rapidly transforming global polity is indeed offering opportunities for India to avail to its advantage.

In conclusion, the issue is the parallel engagement with Britain, underlined by the great  fanfare of domestically-besieged British prime minister Boris Johnson’s visit to India in April 2022. The relationship between the two countries is being projected to enter a new phase of intensity not seen since the height of the rule of the imperialist East India Company and the Crown after 1858 over the Indian subcontinent.

The rapid advance of an Indo-British engagement is being urged on India by a carefully orchestrated British campaign, with their deep understanding of the self-doubting Indian psyche and its irrepressible impulse for validation by their former colonial masters.

Even as the British media, its entire academic social science community and scores of British parliamentarians daily excoriate India with outrageous libel and denounce prime minister Modi personally, politically-active segments of the Indian-origin East African community in Britain have been mobilised to persuade Indian politicians to conclude a hurried deepening of economic, technological, educational and cultural ties between the two countries.

However, it would be wise to bear in mind that the moment the British Labour Party and its Liberal Democrat co-conspirators constitute a parliamentary majority and Labour forms the UK government all bets are off. Such a Labour government will be compellingly beholden to Britain’s powerful British Pakistani constituency and the innumerable Labour members of parliament, many of Mirpuri origin, elected by it.

Much will then be in doubt and sensitive commercial and defence relationships will be vulnerable to suspension if India were to embark on domestic policies like the repudiation of Articles 370 and 35A in J&K or find itself in a conflagration with Pakistan.

Even war with China will possibly motivate the same British-Pakistani constituency, prompted by the authorities in Islamabad who are continuously engaged with their British co-religionists, to argue in favour of neutrality in such a conflict. It will likely lead to the suspension of exports of defence and other potentially dual-use products and technologies to India.

The Indian habit of allowing hope to triumph over experience and fantasy over substance needs to be firmly curtailed.

 The writer taught international political economy for more than two decades at the London School of Economics and Political Science. Views expressed are personal.