Russia-Ukraine war & FTA to top the agenda during EU Commission president’s India visit

New Delhi: The Russia-Ukraine war, including the enforcement of the European Union’s (EU) sanctions on Moscow, will be on the agenda as European Commission President Ursula von der Leyen begins her two-day visit to India Thursday.

Indian Prime Minister Narendra Modi will hold bilateral discussions with von der Leyen Friday, covering a number of issues, including the free trade agreement, security cooperation and partnerships in new sectors, such as space.

“One specific point that will be raised will be the enforcement of our sanctions on Russia. Given our cooperation with India, the effectiveness of the European Union’s (EU) sanctions on Russia will come up,” said a senior EU official speaking on the condition of anonymity Tuesday.

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“Wherever we go, we raise the issue of the war in Ukraine…We are champions of security and peace in Ukraine. We want to see a durable and lasting peace in the war in Ukraine. We see India as a key partner and a sponsor of peace…A part of that discussion will be on the effectiveness of our sanctions on Russia,” the official added.

The EU member-states have focused on reducing their dependence on energy resources from Russia since the war with Ukraine began on 24 February, 2022. India, however, has deepened its economic engagement with Moscow, purchasing over $50 billion worth of Russian oil in 2023-2024.

The senior EU official pointed out that Brussels does not view India’s refining of Russian oil as circumvention of the sanctions. However, the EU has been sanctioning Indian firms for their ties to Russia. Two Indian entities were sanctioned by the EU in their latest package announced Monday.

Von der Leyen is set to visit India from 27 February till 28 February. This is the first overseas visit of her second term as president of the European Commission, and was announced last month at Davos. Along with her, 21 members of the College of Commissioners (equivalent to the cabinet) will be travelling to India to hold multiple discussions with their counterparts.

A source familiar with the matter pointed out that von der Leyen’s trip should be seen from the perspective of the message, rather than any specific outcomes from the visit. The senior EU official highlighted that the visit will see a political statement by Modi and von der Leyen, but that other substantive discussions, such as the free trade agreement, will not be completed during the visit.

The focus of von der Leyen’s visit is to work with India to outline the new strategic priorities of the partnership. The visit is a stepping stone for a full EU-India Summit, which is expected to be held sometime towards the end of this year.

On the margins of the visit, the second ministerial meeting of the Trade and Technology Council (TTC) will take place, where a joint statement will be agreed to. The first meeting of the TTC, first announced in 2022, was first held in May 2023.

The senior EU official explained that a number of issues are expected to be raised at the TTC, including non-tariff barriers to trade introduced by India, restrictions on spirits procurement imposed by Indian states.

The official made it clear that the visit will also see von der Leyen reconfirm the bloc’s commitment to the construction of the India-Middle East-Europe Economic Corridor (IMEC). The transport corridor was announced on the margins of the G20 leaders’ summit in New Delhi in 2023, in the presence of von der Leyen. It will see India connected to Europe via West Asia.

Also Read: India-UK relaunch negotiations for free trade agreement. What threatens it

Trade talks

While the visit is focusing on the larger framework of India-EU ties, there will be discussions between Minister of Commerce and Industry Piyush Goyal and the European Commissioner for Trade Maroš Šefčovič in Mumbai Saturday. However, the senior EU official quoted above cautioned not to expect any major agreement during the discussions.

“There are a number of issues remaining between the two sides on the FTA. It includes Indian tariffs on cars, wines and spirits. The Commission is driving a hard bargain that covers tariffs, non-tariff barriers and procurement commitments. These are areas where we expect India to make stronger commitments,” said the official.

Since July 2022, India and the EU have held nine rounds of negotiations on the FTA. The latest round was held in September last year. The official said that the tenth round is expected to be held soon.

Agriculture is also a stumbling block in negotiations, but it is not being seen as a separate challenge, but a part of the overall tariff negotiations instead.

For the EU, India is a “very important partner” for derisking its supply chains, especially from China. The EU official said that the focus is not picking one over the other, rather reducing its dependence on any single country.

“India is becoming an interesting destination for investment. We share a number of concerns of China’s assertiveness abroad,” said the official.

Another sticking point is the EU’s climate standards. Goyal has in the past referred to the EU’s “irrational standards” which are impacting the trade negotiations.

However, the two main issues for India—the Carbon Border Adjustment Mechanism (CBAM) and the Deforestation Rules—are not on the agenda specifically. The senior official said that the EU will allay Indian concerns, if both are brought up during the discussions, in response to a question by ThePrint.

(Edited by Mannat Chugh)

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