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India & China in Europe

(Keynote speech delivered by me on October 11,2010 at the inaugural session of an international workshop on “European Common Foreign and Security Policy – Implications for India” organised by the Department of Politics and International Studies, Pondicherry University)

EU-India diplomatic relations started in the early 1960s. These relations continued without a comprehensive legal and institutional framework till 1994. The Co-operation Agreement of 1994 laid the foundation for such a comprehensive framework. A comprehensive political dialogue at regular intervals since 2000 imparted a new dimension to the relations. This comprehensive political dialogue has been in the form of annual summits since 2000 and other regular meetings at the ministerial and experts levels.

2. There was value-addition in the subsequent years in the form of the concept of the EU-India Strategic Partnership launched in 2004, the adoption of the EU-India Joint Action Plan (the ‘JAP’) and the decision to initiate negotiations for a Free Trade Agreement. These negotiations have not yet culminated in an agreement. The 2008 summit laid down the following four priorities for the JAP— peace and comprehensive security, sustainable development, research and technology, and people-to-people and cultural exchanges.

3. A new addition has been the periodic EU-India Security Dialogue. Amongst the various subjects that have figured in the periodic political and security dialogues at the summit and sub-summit levels are: counter-terrorism, non-proliferation, crisis management, maritime security with special reference to co-ordinated action against Somali pirates and regional peace and security with specific reference to the developments in Afghanistan. India has not encouraged reported EU attempts to have the developments in Sri Lanka covered within the ambit of this dialogue. While there has been no attempt by the EU to have the Kashmir issue raised in the political dialogue, India was irked by attempts made by Mr.David Milliband, the former British Foreign Secretary, after the Mumbai 26/11 terrorist strikes to link the continuing use of terrorism by Pakistan against India with the so-called Kashmir dispute.

4. Under the security dialogue, India’s main interest has been in India-EU co-operation in Counter-terrorism and against Somali piracy. This interest has been reciprocated by the EU. Counter-terrorism co-operation has acquired added importance due to the role played by members of the Pakistani diaspora in Europe in assisting Al Qaeda and the Taliban. Recent reports of the plans of Al Qaeda and the so-called German Taliban to organize Mumbai-26/11 style terrorist strikes in the UK, France and Germany in protest against their role in Afghanistan have added to our concerns. Despite this, the scope for India-EU counter-terrorism co-operation has remained limited due to the following reasons:

Firstly, India’s disappointing experience during the days of the Khalistani terrorism in Punjab. While there was good co-operation from the UK, the other EU countries—-particularly Germany—- dragged their feet.

Secondly, the electoral influence of the Pakistani diaspora in countries such as the UK inhibit their co-operation with India against Pakistan-sponsored jihadi terrorism in Indian territory.

Thirdly, Indian intelligence and security agencies feel more comfortable interacting at the bilateral level with their counterparts in individual countries such as the UK with which they have a long history of co-operation than with their counterparts in regional organizations such as the EU. That is why progress in the implementation of past agreements on co-operation between India’s Central Bureau of Investigation and EUROPOL has been slow.

5. Counter-terrorism co-operation has many dimensions such as exchange of intelligence, mutual legal assistance in the investigation and prosecution of terrorism-related cases, mutual assistance in capacity-building particularly in fields like cyber security etc .Most of the co-operation in these fields has been more with the agencies of individual EU countries than with security-related institutions set up by the EU. The EU countries played only a limited role in assisting India in dealing with the 26/11 terrorist strikes. India itself valued the co-operation of the US more than the co-operation of the EU.

6. There are traditional and non-traditional areas of co-operation. The dimensions mentioned above will come within the component of traditional areas. There is a vast non-traditional component, which has acquired importance after the 9/11 terrorist strikes in the US. Examples are: Strengthening homeland security, cyber security, strengthening of the security of urban transport, aviation and port security, promoting research and development in technologies having a bearing on homeland security etc.

7. While there has been some progress in India’s counter-terrorism co-operation with the US in the traditional areas, the progress in the non-traditional areas has been wanting. Suggestions made from time to time since 9/11 by security analysts, including me, for co-operation between India and the US in the research and development of homeland security technologies have not received much attention. The US is interested more in selling homeland security technologies and products to India than in jointly promoting with Indian experts research and development of such technologies. A major reason is, in the US, private firms play a large role in this matter and they want, with the support of their Government, to maintain their monopoly in this field.

8. It is these non-traditional areas that should receive the attention of India and the EU. The EU countries and their homeland security firms have no vested interest in creating and maintaining a monopoly in this matter. India and the EU should set up a Joint Counter-Terrorism Technology Development Initiative and focus on it. Traditional areas of co-operation are better left to the intelligence and security agencies of individual countries.

9. The EU launched in December 2008 an anti-piracy patrol off the coast of Somalia — its first-ever naval mission — to combat piracy. Designated Operation Atalanta, the mission, endorsed by the EU’s Defence Ministers during a meeting in Brussels the previous month, will be led by Britain, with its headquarters in Northwood, near London. After the Brussels meeting, Herve Morin, the French Defence Minister, explained the decision to launch Operation Atalanta in the following words: “It is a great symbol of the evolution in European defence, and I would say, of its coming of age.”

10. According to the “Daily Telegraph” of the UK, Geoffrey Van Orden, Conservative Euro-MP and Tory defence spokesman in Europe, questioned the motive behind an EU-led naval mission when EU countries were already contributing ships for NATO’s anti-piracy operations in the area. He said: “NATO is best able to mount such an operation on behalf of the UN. The EU is desperate to find military operations that it can stick its flag on in order to give credibility to its defence pretensions.” The Atalanta mission, whose present term is up to December 2012, has 12 ships and patrol aircraft supplied by the UK, Italy, the Netherlands, Germany, France, Spain, Belgium, Luxembourg and Greece, as well as non-EU member Norway. The Atalanta force patrols the Gulf of Aden and Somali Basin waters in conjunction with other anti-piracy missions operated by the NATO, India, Russia and China.

11. The EU is keen to enlist India’s formal endorsement and support to the Atalanta mission. This was one of the subjects reportedly discussed by Ms. Catherine Ashton, High Representative of the European Union for Foreign Affairs and Security Policy, during her visit to New Delhi in the second fortnight of June, 2010. The increase in the activities of the Somali pirates has led to a surge in anti-piracy patrols mounted by the victim countries, individually as well as collectively. Thus, we have an Indian anti-piracy patrol, a Chinese patrol, a Japanese patrol, a US patrol, a NATO patrol, an EU patrol and so on. Each patrol is concerned only with protecting commercial ships flying the flags of the countries which have launched the patrols.

12. This is only the physical security aspect of protecting maritime trade from pirates. There is a larger aspect of dealing with the evil of Somali piracy which calls for co-ordinated action on different fronts such as mutual legal assistance in the investigation and prosecution of captured pirates, preventing captured pirates from returning to piracy due to the absence of legal action against them, stopping the flow of money to pirates in the form of ransom money paid for the release of captured hostages and restoration of peace and stability in Somalia without which maritime security in the region would continue to be fragile. Instead of India formally joining the Atalanta mission, it should join hands with the EU in promoting the evolution of a joint counter-piracy doctrine incorporating these aspects.

13. The launching of the Atalanta naval initiative against piracy by the EU has drawn attention to what Van Orden described as the defence pretensions of the EU. It would be more appropriate to call it the defence and security role of the EU. Following the Kosovo war in 1999, the European Council agreed that “the Union must have the capacity for autonomous action, backed by credible military forces, the means to decide to use them, and the readiness to do so, in order to respond to international crises without prejudice to actions by NATO.” To that end, it has been proposed to increase the EU’s military capability. Under the EU’s Battlegroups initiative, each member-country is expected to be able to deploy about 1500 men quickly. EU forces have been deployed on peacekeeping missions in many areas. The Political and Security Committee of the EU, which came into existence in 2000, is projected as the “linchpin” of the European Security and Defence Policy and the Common Foreign and Security Policy. Among its responsibilities is exercising “political control and strategic direction” over EU crisis-management operations.

14. India has a long history of fruitful co-operation with the UK and France in sensitive fields. Till recently, before we turned to the US in our quest for modern military equipment and technologies, we benefited from our ability to procure military equipment from the UK and France, in addition to the USSR/Russia. The French had helped India considerably in the past in the development of our civilian nuclear capability. This came to a halt following the Safeguards imposed by the Nuclear Suppliers Group against the supply of nuclear equipment and related technologies to countries that have not signed the nuclear non-proliferation treaty. With the lifting of the NSG restrictions on civilian nuclear supply relationship with India, the French are in the forefront of countries keen to enter the Indian market for civilian nuclear reactors. India has benefited for many years from space-related co-operation with France.

15. In deciding what should be India’s attitude to the projected defence and security role of the EU, we should see that the wealth of mutually beneficial networking that we have established over the years in individual countries such as the UK and France is not weakened. At the same time, we should explore the possibility of using this long-standing networking with governmental and non-governmental entities in the UK and France for establishing similar networking with other EU countries individually and with EU specific institutions collectively.

16. India’s economic role in the EU is satisfactory if seen in isolation, but far from satisfactory if seen in comparison with the growing profile of China in Europe that was highlighted by the recent visit of Prime Minister Wen Jiabao to four European countries.

17. EU-India trade doubled from €28.6 billion in 2003 to over €50 billion in 2007. EU investment in India more than tripled since 2003 from €759 million to €2.4 billion in 2006. Trade in commercial services more than doubled from €5.2 billion in 2002 to €12.2billion in 2006. The figures for 2009 were as follows:

Trade in goods

• EU goods exports to India: €27.5 billion • EU goods imports from India: €25.4 billion

Trade in services

• EU services exports to India: €8.6 billion • EU services imports from India: €7.4 billion

Foreign Direct Investment

• EU outward investment to India: €3.2 billion • Indian investment to EU: €0.4 billion

18. During the first eight months of this year, China-EU trade exceeded 300 billion U.S. dollars—- a growth of 36.2 percent compared with the same period last year. The total value of India-EU trade in 2009 was about one-fourth of China-EU trade. According to China’s Ministry of Commerce, 5.8 percent of Chinese overseas direct investment in 2007 was directed at Europe, behind Asia at 62.6 percent, Latin America 18.5 percent and Africa 5.9 percent, but ahead of North America at 4.3 percent. There were 252 investments by Chinese companies in Europe in the 10 years up to 2007, according to the international business consultancy firm Ernst & Young. Of these, the largest number, 101, went to the UK followed by 40 going to Germany, 24 to France and 15 to Sweden.

19. Addressing the Greek Parliament after his arrival in Athens on October 2, Prime Minister Wen said that China’s commitment to advancing China-EU relations “is not an expediency, but a long-term strategic policy”. He also said that China would not reduce its holdings of euro bonds and added that it supported a stable euro. He said: “We sent trade and investment promotion missions to Europe and signed a series of important trade and investment contracts. The initiatives were specific examples of China’s efforts to help Europe overcome its financial difficulties.” To help Greece overcome its debt crisis, China was supporting measures taken by the EU and the International Monetary Fund (IMF) and would set up special initiatives to support Greek ship owners buying vessels from China, he promised.

20. During his meeting with his Greek counterpart, George Papandreou, , Wen reportedly said China was holding Greek government bonds and would buy more to help the country recover from the financial crisis. Wen also said that China would help Greece to manage the container terminal in Piraeus, the biggest port in Greece, and increase its capacity from the present 1.6 million to 3.7 million containers by 2015. China would help upgrade Piraeus to a distributing center for Chinese exports to Europe According to the “China Daily” (October 4), COSCO, China’s leading shipping giant, successfully won a container operation project for Piraeus port in 2008. Under the terms of the contract, COSCO will manage Pier II and Pier III of Piraeus Container Terminals for 35 years. The volume of containers that moved through the port between January and April increased by 43 percent compared with the same period last year, in spite of the financial crisis.

21. After the Chinese presence in the port of Gwadar in Pakistan, Hambantota in Sri Lanka and Kyaukpu in Myanmar, we are now seeing moves for a Chinese presence in the port of Piraeus in Greece. China has a strategic policy towards Europe. Its aim is to acquire a strategic presence in Europe and strategic economic links between China and the EU through measures such as increased Chinese purchase of Euro bonds.

22. India has a strategic partnership with the EU, but no strategic policy to acquire a strategic presence and role in Europe. How to acquire such a presence and role should receive attention during the discussions in this workshop.

(Coutesy: South Asia Analysis Group.The writer, Mr B.Raman, is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail:

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