India and EU to build joint infrastructure projects in Asia

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The European Union (EU) and India agreed to resume stalled free trade negotiations and seek closer co-operation to combat climate change at a virtual summit on Saturday (8), as concerns about China bring Brussels and New Delhi closer.

Partly overshadowed by the Covid-19 crisis in India, the meeting brought together Indian Prime Minister Narendra Modi and all of the bloc’s 27 leaders for the first time in a sign of the EU’s renewed interest in the Indo-Pacific region.

Past EU-India summits have involved only the Indian Prime Minister and the EU’s Chief Executive and Chairman.

“We agreed to resume negotiations for a…trade agreement which would respond to the current challenges,” EU and Indian leaders said in a statement after the talks, adding that for talks to succeed, both sides had to solve market access issues.

In parallel, the EU and India will start talks on a separate investment protection deal and an accord on geographical indications – famous brand names often linked to the places they are made, from France’s champagne to India’s Darjeeling tea.

China’s rise from a benign trading partner to a rival power with a growing military presence has alarmed the West and its allies in the Indo-Pacific, where Brussels wants more influence.

“We agreed that, as the world’s two largest democracies, the EU and India have a common interest in ensuring security, prosperity, and sustainable development in a multi-polar world,” the joint statement said.

EU-India trade talks were frozen in 2013 over differences including tariff reductions, patent protection, data security, and the right of Indian professionals to work in Europe.

China’s rise from a benign trading partner to a rival power with a growing military presence has alarmed the West and its allies in the Indo-Pacific, where Brussels wants more influence.

A 2020 study by the European Parliament put the benefits of a trade deal for the EU with India at up to € 8.5 billion ($ 10.2 billion), although the estimate was made before Britain’s departure from the bloc.

The EU and India also agreed to build joint infrastructure projects around the world, notably in Africa, to be described as a connectivity partnership.

The deal follows on from an accord between the EU and Japan in 2019, seeking an alternative to Chinese largesse known as the Belt and Road Initiative (BRI) that raised suspicion in the West and Tokyo.

Both sides pledged increased co-operation to limit climate change. The statement said the EU and India would hold meetings to collaborate in renewable energy, energy storage technology, and modernising power grids.

EU-India trade talks were frozen in 2013 over differences including tariff reductions, patent protection, data security, and the right of Indian professionals to work in Europe.

(Reuters)

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