ABSTRACT
In the last two decades, there have been significant changes in India’s foreign policy as well as economic policy orientation. As a result of these changes, India’s global vision of a democratic, multicultural and multipolar world has somewhat become closer to the European understanding of global economy and polity. During this period, there has been a significant shift towards Asia, particularly in economic matters. Unlike Europe, however, the economic and security architecture in Asia is still evolving. As an important global player, Europe would like to play an important role in this evolving situation. Europe’s engagement in Asia, however, will be incomplete without creating a solid partnering with India. Realising the importance of this cooperation, both India and the European Union (EU) established the institution of annual summit meetings in 2000. After a few years of successful interaction, both signed the India–EU Strategic Partnership in 2004. Very soon, in 2005, a Joint Action Plan was also launched. Later in 2006, India was invited to become member of the Asia–Europe Meeting (ASEM). Despite many of these initiatives, still the core of India–EU relations has been trade and economic linkages. With more than US$110 billion bilateral trade, 1 the EU is India’s largest trading partner. Similarly, foreign direct investment (FDI) in India from the countries of the EU is higher than investments from the United States (US) and Japan put together. 2 However, it is not only that European companies have found new opportunities in India, a large number of Indian firms are acquiring ownership in many European firms. These factors have encouraged policymakers from both sides and since 2007 they have started negotiating a broad-based bilateral trade and investment agreement. 3
