COVID-19 pandemic pauses India’s global diplomacy push

COVID-19 pandemic pauses India’s global diplomacy push

by India Inc. Staff

The outbreak has grounded the Indian Prime Minister for now but it cannot rein in the country’s global push for long.

Highlights:

  • The Coronavirus outbreak has put breaks on PM Modi’s diplomatic visits, several of which were integral to India’s global diplomacy strategy.
  • The visit to Bangladesh would have focused on the issue of illegal immigrants in India, especially given the announcement of CAA.
  • The Egyptian visit was of great importance in building India’s connect with the African continent.
  • The biggest missed opportunity was the India-EU summit in mid-March, which would have reviewed the progress of this partnership while also endorsing the Agenda for Action 2025.

The outbreak of the Novel Coronavirus pandemic that has shut down vast swathes of the world has also impacted the travel itinerary of Prime Minister Narendra Modi.

Known for his super-charged out-of-the-box diplomacy that is laced with his own personal offensive, Modi was slated to attend the India-EU summit in Brussels in mid-March and follow it up with a stopover at Egypt. Another sojourn that got cancelled as the virus took a firmer toehold in the subcontinent was a trip across the border to Bangladesh to attend the centenary celebrations of Sheikh Mujibur Rehman – the father of Bangladesh.

Each of these has its own significance. The trip to Bangladesh would have been in the backdrop of the promulgation of India’s Citizenship Amendment Act that seeks to expedite citizenship for those who have faced religious persecution in neighbouring countries. Along with other provisions like the National Register for Citizens and National Population Register, that are attempts at identifying and weeding out infiltrators in the country. A vast majority of illegal immigrants in India are believed to be from across the porous borders of Bangladesh, which makes this issue a political hot potato. Thus far, Bangladesh has refused to get into this referring to it as India’s internal matter, but it would have invariably been a priority issue during Modi’s visit.

The trip to Egypt follows this government’s persistent diplomatic push towards improving ties with the African continent. At the same time, Egypt’s unique geographical position makes it an important voice in the Arab world as well. Both hold importance for India and the two countries share close ties historically – the India-Egypt bilateral trade agreement is more than four decades old. Egypt has also clearly de-hyphenated its ties with India and Pakistan, something that India would want more of the middle eastern countries to follow. With India set to host the next India-Africa summit, Modi’s visit would have further underlined the importance India pays to the African continent.

Yet, the most significant of the three was the trip to Europe. India’s relations with Europe gained ground 2004 onwards when a strategic partnership based on shared values like democracy, rule of law and preference for multilateralism was signed. That was followed up by the initiation of negotiations for a comprehensive free trade agreement in 2007. That was however suspended in 2013 following irreconcilable differences and in recent times, there has been a lull of sorts in the relations.

Indian External Affairs Minister S. Jaishankar’s visit to Brussels in August last year indicated a desire to kickstart dialogue all over again. The minister underlined in no uncertain terms of India’s priorities of increased mobility for people from India to go to the region, improved market access for flow of goods and better access to services including in the banking industry.

As a trading block, EU is India’s largest business partner accounting for nearly 13 per cent of its total trade worth around $98 billion (€92 billion), which is ahead of China (10.9 per cent) and the US (10.1 per cent). Trade in goods between the two increased by 72 per cent in the last decade while EU’s share in foreign investment inflows to India more than doubled from 8 to 18 per cent. There are some 6,000 EU companies present in India, providing direct employment to 1.7 million and indirect employment to another 5 million.

The potential, however, is far higher and a bilateral trade agreement is central to it. According to estimates by the European Parliament, an FTA can help expand EU’s GDP by 0.14 per cent and India’s GDP by 1.3 per cent a year. A trade sustainability impact assessment of the FTA done back in 2009 had said India was expected to gain $5.2 billion (€4.9 billion) in the short run and $19 billion (€17.7 billion) in the long run, while the EU was expected to gain $4.7 billion (€4.4 billion) in the short run and $1.72 billion (€1.6 billion) in the long run. A follow-up report to the study was never done so what those numbers would be like if the FTA is finalised today is anybody’s guess but it would definitely be higher. Bilateral trade could potentially treble in a decade from the commencement of the FTA.

As such, with the backdrop of Brexit and a fragile world economy, the India-European Union ties stand at a crossroad. Both parties have reaped benefits of globalisation and multilateralism in the past but are facing unique headwinds domestically which merit a relook at many of the past policies. The summit would have done just that, reviewing the progress of the partnership while also endorsing the Agenda for Action 2025.

About the Author: India Inc. Staff