Potential Defense Industry Collaboration Emerges as Pivotal Factor for Enhanced EU-India Trade Agreement
The Political and Security Committee (PSC) of the European Union recently made a significant visit to New Delhi, marking the first time the committee has travelled to India since its creation. This visit comes at a crucial time, as both sides appear ready to make concessions in the name of a bilateral social security policy and defense industrial interests.
The PSC is responsible for the EU's Common Foreign and Security Policy (CFSP) and the Common Security and Defence Policy (CSDP). The EU and India are aiming to conclude a historic free trade agreement (FTA), which could make defense and security policies a significant part of a new partnership.
The planned EU-India FTA, targeted for completion by the end of 2025, is a key element in deepening this relationship. The dynamic Indian economy and innovation sector offer a valuable opportunity for the EU to capitalize on.
However, the relationship between the EU and India is not without its challenges. One divisive issue in security cooperation remains the Pakistan question. India is asking the EU to suspend the General Scheme of Preferences Plus with Islamabad, a trade scheme based on a system of preferences in certain specific sectors.
India's defense budget for 2025-2026 amounts to over €70 billion, and New Delhi plans to modernize its navy and air force. The Indian government seeks to diversify the military technology base of the Indian army, and it looks to the European Union for support in this endeavour.
Notably, India and Germany recently struck a deal to manufacture in the South Asian country German-designed submarines. This move is a testament to the growing defence ties between the two nations.
The war in Ukraine, the military build-up in the Indo-Pacific region, and the recent flare-up of violence with Pakistan have brought social security and defense to the center stage in the relationship between New Delhi and the 27 Member States. The Indian prime minister attended the Shanghai Cooperation Organisation (SCO) summit in China and was welcomed by Russian President Vladimir Putin and Chinese leader Xi Jinping.
President Putin is expected to visit India before December and sign an agreement for the production of S-400 or S-500 air defense missiles. Meanwhile, President Donald Trump has threatened to increase India's trade tariff rate from 25% to 50% over its continued purchase of Russian oil.
The EU Commission is presenting a new EU-India strategy on Wednesday. As India becomes an increasingly important economic power, technology hub, and geopolitical counterbalance to China, closer cooperation between the EU and India has become essential for economic, political, and social security reasons.
The Indian defense doctrine for at least half a century has been based on the assumption that India would have to fight American planes. However, the changing geopolitical landscape and the need for India to become a weapons manufacturing hub could lead to a shift in this doctrine.
The United States has sent trade representatives to India with the aim of re-establishing relations between Washington and New Delhi. Sunil Prasad, Secretary General of the EU-India Chamber of Commerce, is certain that the FTA will be signed between Delhi and Brussels before December.
As both the EU and India navigate these complex issues, the future of their relationship remains uncertain. However, one thing is clear: social security and defense will play a significant role in shaping this partnership in the years to come.
