11th EU-India Summit: free trade on top of the agenda

The European Union is India's largest trade partner with a bilateral trade volume of about 70 billion euros (92 billion dollars) in 2009. This figure is projected to grow to over 106 billion euros (130 billion dollars) once a free trade agreement becomes reality. But the EU insists that India must meet certain conditions first: it should do more to fight global warming and to address social problems such as child labor.

India is unhappy

Rajendra Kumar Jain, professor of international politics at New Delhi's renowned Jawaharlal Nehru University is skeptical. "Ever since the negotiations started, India has been emphasizing that no issues must be part of the agreement which are not related to trade or the economy. My guess is that, due to the pressure by the European Parliament, there will be some kind of unclear wording in the end to make everyone happy," says Jain. He adds that there are other conflicts as well - for example about intellectual property rights or the extension of EU patent rights to India - which would drive up prices of generic drugs in India.

India is also unhappy that the EU announced temporary trade concessions for neighboring Pakistan after the floods there. The measures are meant to help Pakistan's cotton farmers to recover from the disaster. But Delhi has already made it clear that India does not appreciate this kind of emergency relief.

Jain says EU Commission President Jose Manuel Barroso and the president of the European Council, Herman van Rompuy are sure to raise the issue in their talks with Indian Prime Minister Manmohan Singh and Commerce Minister Anand Sharma.

"India has emphasized two things: first, such trade concessions are against the WTO principles. And second, India has pointed out that the Pakistani textile exporters and cotton farmers, whom the EU is planning to support, are not even in the flood-affected regions. Now the EU is probably going to try to convince India not to involve the WTO in this. But this is going to be difficult, because India is a cotton exporter too, and would therefore suffer from these concessions," asserts Jain.

Terrorism, and India's bid for UN membership

Some observers believe that the EU has neglected its relations with India to some extent, compared to its ties with China. But Jain believes this is changing now. "I do think that the European Union has changed its behavior, mainly because the US has been courting the Indians. Nevertheless, China remains the Europeans' number one priority. But they are worried because India has already struck free trade deals with many, particularly Asian countries. And the EU does not want to be shut out of the huge Indian market with its more than a billion consumers."

Besides trade issues, India's quest for permanent membership of the UN Security Council, as well as terrorism and other security issues, are also expected to be on the agenda in Brussels.

After the EU-India summit, Prime Minister Manmohan Singh is due to travel to Berlin for talks with German Chancellor Angela Merkel on Saturday.

Author: Priya Esselborn
Editor: Thomas Baerthlein