Opinion | Brexit done, let’s talk business with the EU and the UK4 min read . Updated: 23 Feb 2020, 08:29 PM IST
There is an opportunity for India in the ‘westlessness’ that the West has been worrying about
The Munich Security Conference (MSC), which ended recently, served to notch up unease in diplomatic and security circles. Some 35 heads of state joined 500 politicians, officials, busybodies and spies trying to figure out what “westlessness" means. It is a term that has been used with increased frequency, of late.
It has plenty to do with the state of the West’s economies. Developed nations are baring their teeth and claws because their trade models are crumbling and new ones are not emerging on command.
The post-World War II institutions set up by Western powers, whether they be the Bretton Woods twins, the World Bank and International Monetary Fund or the United Nations (UN). The world’s free trade policeman World Trade Organization (WTO) is defending bilateral onslaughts. Food, water, climate, health and education are the new “strategic" issues. A failure to weaponize and monetize them seems to form a significant part of the West’s restlessness.
Westlessness is a calibrated distraction, with sections of influential media uncritically absorbing it.
This is an opportunity for India. It is not time to make politically inane statements like this is New Delhi’s time. Rather, this is the time to back ambition with ground work within the country and overseas.
Brexit has left people perplexed in Europe. Europeans on the continent, ever cautious with les anglais (suspecting London of perpetually leaning towards Washington), wondered what would come next. That’s now done and dusted. So are the long and dreary will-they-won’t-they Brexit negotiations that left people scurrying for passports, documents and answers that did not exist for their questions. New rules will not kick in till 2021, but economic disruption is only to be expected.
What does this mean for India, a country the British Empire plundered to fuel its industrial revolution? To paraphrase foreign minister S. Jaishankar’s words at the MSC, India is the world’s economic, political and security net. Translated, that also means “come, trade freely and fairly with the world’s largest democracy".
Westlessness, if handled well, can be India’s path, especially when the European Union (EU) and the rest of the world is looking East. In India’s favour is democracy. What goes against India is the lack of self-confidence, not among its people, but displayed by a government that still hesitates to go out and seize the many openings with a firmness the country deserves. Trade between India and the EU as a bloc is on the rise, as also between the country and the EU’s heavyweights, France and Germany.
Both are Nato countries, have different political views on geopolitics, diverging on such matters as their West Asia policy, and are members of the UN permanent five (P5). With its diversity, thus, the EU could offer India much leverage in world affairs. The EU’s relationship with China and Russia are notable, too. All considered, it is critical for New Delhi to engage the EU in this moment of westlessness. Europeans understand it better than Washington and, its spokesperson, London.
In 2017, total trade between India and the EU was valued at €118 billion. India’s exports of goods and services were worth €41 billion and €16.6 billion, respectively. Imports of goods and services, on the other hand, was worth €44 billion and €17.1 billion, respectively.
In 2018, India was the EU’s ninth largest trading partner. Its exports to the EU were placed at over €45.8 billion in 2018, up sharply from €22.6 billion back in 2006. Total goods trade between India and the EU was worth €92 billion in 2018, accounting for 12.9% of India’s total trade and 2.3% of the EU’s total trade. The story in services is just as impressive. India is now the fourth largest exporter of services to the EU and the sixth largest destination for EU’s services exports.
Commercial ties have grown in other ways as well. The EU’s share in foreign investment inflows into India more than doubled from 8% to 18% over the last decade.
Of all EU countries, Germany, the UK and France accounted for about half the trade volume between India and the EU before the UK snapped away from the common market. Consider India’s trade relationship with each of these countries.
Begin with France. Bilateral trade in goods between India and France increased from a shade above €10.7 billion in 2017 to over €11.5 billion in 2018. This volume has actually more than doubled in less than a decade, up from nearly €5.4 billion back in 2009. Indian exports to the country exceeded imports by €463 million in 2018.
Now take Germany. Relations between Bonn and New Delhi are strong and growing, with total trade in goods in 2018 valued at €23.8 billion. India’s exports and imports in goods were worth €8.2 billion and €15.6 billion, respectively.
With the UK, the goods and services that India exported were worth almost £12.9 billion in 2018, up from about £12.05 billion in 2017, while the country’s imports from the UK were worth £7.9 billion in 2018, up from a bit over £6.6 billion in the previous year. Taken together, that amounts to a bilateral trade relationship worth around £20.8 billion in 2018. The UK is a key export market for India.
Numbers tell stories. Your turn, New Delhi.
Chitra Subramaniam is an award-winning journalist and author