India and Europe are strategic partners. The relationship today is stronger than ever. As we speak, we are negotiating a Free Trade Agreement, an Investment Agreement, and have launched a Trade and Technology Council to put flesh on the bones of the Connectivity Partnership, and to achieve, together, the digital transformation we need to meet the challenges of the 21st century.
India has every interest in pursuing this strategic relationship– since only with access to European technology, freer trade and quality inward investment, can India stay on track to achieve its 2047 target of becoming a developed economy.
Cooperation in other strategic tech areas, reflecting shared economic, political and security interests, also however needs to be stepped up. We recognized this in launching the TTC last April. The TTC will be the place of ‘strategic engagement’, responding to geopolitical change and ‘challenges at the nexus of trade, trusted technology and security’.
Because the Ukrainian war and Covid have demonstrated the limitations and risk of our dependencies. The war has challenged countries’ ability to act in line with their interests in an interconnected world. We now have to stand up against those regimes that undermine our peaceful cooperation, and develop strategies to protect ourselves and our economies. The emphasis on sovereignty in the digital field is important since digital is almost by definition a field of global action faced with innumerable challenges ranging from technological competition to cyberattacks and disinformation.
A recent Morgan Stanley report predicts that in the next decade India may become the world’s third largest economy as well as the world’s third largest stock market by 2027. Four key factors — demographics, digitalization, decarbonization and deglobalization —will determine this rise. I want to focus on digitalisation and the politics of digitalisation.
While there is no formal policy framework in India on digital autonomy per se, key aspects of both India’s and the EU’s concept digital autonomy are to protect national security, citizens, social stability; to reinforce domestic industry, safeguard social and cultural norms and values and help people control their data. These aims lie behind the EU’s concept of open strategic autonomy, and India’s Aatmanirbhar Bharat policy of greater self-reliance.
Both India and the EU are undergoing transformation and digitalization can drive our relations. The nature of this transformation in a multipolar world requires a reboot of EU-India. Strategic clarity about the objectives and benefits of closer ties will help steer policymakers and other stakeholders in the desired direction. But going even further, India and the EU can help one another build strategic autonomy and reduce dangerous dependencies on countries such as China or Russia. We note that India is promoting its own production capabilities through its ‘Make in India’ campaign, while diversifying existing value and supply chains. India has made clear that it wishes to adjust its dependency on Russia for defence equipment. EU has an interest in helping India do that, as a strong India can counterbalance Chinese influence in the Indo-Pacific region and beyond.
Within the next decade, India, and other countries in the Indo-Pacific region, will face a crucial choice between nurturing relations with democracies or with autocracies. Their preference will impact the global power balance significantly.
Relations with other large powers, such as Russia and China, have provided the EU with many valuable lessons, including about dependencies, naïve expectations and commercial opportunism
To India, technology is also a tool to create synergies of interdependence in its international relations, with developed as well as developing countries. Delhi has significant foreign policy relationships in military and defence technologies as well as other critical technologies, notably with the USA, Israel, Japan, France and the UK.
We can therefore suggest that the TTC’s mandate include defence technology (to diversify Indian defence capabilities further, thus lowering India’s dependence on Russia). This is in line with recent developments in the strategic partnership – for example, during the first EU–India Security and Defence Consultation on 10 June 2022, India and the EU discussed the co-development and co-production of defence equipment, including India’s possible participation in the EU’s Permanent Structured Cooperation (PESCO).
However, the TTC might hold the greatest potential in technology and data governance. As a platform to discuss complex issues, including digital surveillance, the spread of disinformation on platforms, algorithmic discrimination of minorities and internet shutdowns
By shifting from institutional discussions to a forum to exchange views on the use and development of human-centric technologies, perceptions could change. In the realm of data-driven technology (including artificial intelligence (AI), advanced programming and the Internet of Things), the EU’s digital single market and governance mechanisms foster open innovation and research across EU member states. At the same time, EU digital policies set standards to ensure compliance with European and universal human rights, fostering a ‘human-centric’ digitalisation.
Regarding data exchange, India’s future national Data-protection Bill will make an EU–India cross-border data exchange agreement possible . A game changer in this area is privacy-enhancing technologies (PETs). The TTC could examine data-protection safeguards in the Bill, while also launching joint PET projects to ensure compliance with data-protection laws and leverage advantages for businesses and users.
Interoperable Digital Identification is a particularly promising area for bilateral cooperation. The EU can learn a lot from India’s Aadhaar digital project. The EU Digital Single Market and the increasing number of citizens working, travelling, or living in another country make it imperative for EU member states to introduce digital ID systems that work across borders. But so far, the use of these systems is fragmented, and uptake is slow. Only about 60 per cent of EU citizens can use all the functions of their national digital ID in another EU country. This is low compared to Aadhaar, because EU member states are not required to introduce interoperability with other member states.
Europe aims to make all critical public services available online by 2030, when 80 per cent of EU citizens should use a digital ID. Again, India’s Aadhaar system could serve as a case study for the EU to identify the strategies and incentives for EU citizens to increase uptake of digital IDs and services. Moreover, India is expanding its digital ID to four essential services – identity, payments, data, and open networks – under the principle of interoperability. Europe can learn from this too as we move towards introducing an EU digital identity wallet for all citizens, and harmonise digital solutions for public administrations, businesses, and citizens, both cross-border and cross-sector.
The can therefore foster cooperation in interoperability policy and project implementation based on safe, privacy-preserving data transfers. Building on interoperability, the TTC could explore joint actions to foster technological innovation in essential supply chains, for example joint research projects to strengthen supply-chain resilience by advancing technical ecosystems and infrastructures.
On the ‘promote’ side, the EU (and its member states) and India could invest in defence technology cooperation, particularly in areas like: quantum research; drone systems; space research and aerospace materials; and in critical subsystems such as critical alloys, engines, sonars, radars, over-the-horizon missiles and network-centric warfare suites.
When it comes to our cooperation on defence technology, Indian firms still face a knowledge gap. The EU and India need to develop a clear-cut strategy for defence technology cooperation. Cooperation is also possible in the semiconductor industry, particularly in investment for a joint R&D foundry and in collaboration on open hardware projects. In the area of critical minerals, the EU and India could establish a Centre of Excellence and jointly explore, recycle and stockpile critical minerals.
Against this background and in conclusion, there are seven recommendations for future India–EU cooperation.
First, the TTC must become a platform for systematic dialogue between policymakers and authorities on the digital autonomy agenda.
Developing or using technologies to implement shared democratic principles can close the trust gap between the partners. The use of PETs, for example, would signal India’s preference for privacy models based on democratic values. Conversely, the EU could learn much from the Aadhaar system in terms of how interoperability has been implemented.
Second, we need to create an information-sharing mechanism to combat disinformation and foreign digital interference.
With Russia deploying cyber warfare and disinformation strategies in its war on Ukraine, online platforms and internet service operators play an important role in dispatching factual information. We have taken a number of measures to counter disinformation, yet considering the borderless nature of the Internet, it will be more effective to do this via greater international collaboration. India and the EU should consider establishing an information-sharing system focusing on disinformation and information manipulation in the context of the Ukraine war, and a framework for India’s public and private stakeholders to cooperate with EU.
Europe can also usefully share its experiences on the effectiveness of anti- disinformation tools learned during the Russia disinformation campaign, including new approaches to mitigate the threats.
Third, we need to forge stronger partnerships in digital technologies and industries in order to reduce risk, diversify our supply chains, and head off hybrid challenges.
The Indian military has already incorporated defence technologies from vendors in Bulgaria, Germany, Poland, Spain, the Czech Republic and France. Although India is looking to indigenise its military equipment manufacturing to reduce crucial dependencies the government has recently further liberalised its FDI régime allowing FDI of up to 74 per cent under automatic routes and up to 100 per cent through the government route, ‘wherever it is likely to result in access to modern technology’.
Cooperation agreements on technology transfer,, and joint ventures between Indian and European companies, are hence likely to increase. As we both need to balance our economic dependence on China with our common concerns over unfair trade and technology practices, we must use our convergence on shared values and challenges to gain leverage in the new era of disruption characterised by the Fourth Digital Revolution.
Fourth, in addition to new alliances in semiconductor manufacturing, sectors such as artificial intelligence (AI), smart medical products, and data/cyber securities can be regarded as strategic sectors for India and the EU industrial cooperation.
Taking AI as an example, a policy and industrial alliance of AI and smart manufacturing between India and the EU would be a good starting point.
Fifth, reducing barriers to R&D cooperation for semiconductor companies
Investment in a joint semiconductor fabrication plant, and collaboration on open hardware projects within the semiconductor sector hold great potential to diversify the strategic supply chain. In many high-tech industries, critical minerals are also essential. Creating a centre of excellence to identify, recycle and stockpile these minerals jointly will benefit both sides in our partnership.
Sixth, jointly developing human-centred technologies is another means for the EU and India – the world’s two biggest democracies – to decrease dependencies while promoting democratic principles.
The two sides could work on capacity-building in India on EU export controls, in order to facilitate cooperation in many tech areas. Learning from other partnerships, the EU and India can benefit from India’s engagement with other trusted partners, such as with Australia, Japan and the United States in the Quad, and Australia and Japan in the Supply Chain Resilience Initiative (SCRI). The lessons to draw from these initiatives are manifold, relating to mapping, principles, matchmaking, and India as a hub. The EU–India Trade and Technology Council could invest in mapping collective capacity and vulnerabilities in specific technology-sector supply chains, and adopting a common set of principles for the supply chains of critical tech.
Last, understanding governance
One challenge faced by Europe is understanding the role of Indian states, with differences between their regulations and in opportunities for collaboration. Individual Indian states play a significant economic role, as exemplified by the semiconductor deal between Taiwan’s Foxconn and Indian firm Vedanta: two MoU’swere signed with the State of Gujarat (where the plant will be located) to make the joint venture happen. Indian states are important players in foreign policy, and subnational diplomacy matters. India is still considered a difficult market by European companies, in part because of these sub Federal roles and differences in regulation among them. This must be tackled in order to incentivize European companies to engage in technology transfer.
EU member states wish to restructure ties with India from a more strategic perspective, as it is in the EU’s interest to see a counterbalance to China in the Indo-Pacific region. Considering the geopolitical context, the EU and India have ample reason to elevate bilateral relations, and the field of technology offers valuable opportunities for this. When it comes to strategic autonomy, India can play a role to help the EU reduce its dependence on China, and the EU can help India reduce dependence on Russia. Military technologies, critical technologies and supply-chain restructuring are areas where these dependencies are pivotal and where many opportunities to enhance EU– India tieslie .
Conclusion
The EU must be always mindful of India’s complex history with the West. But I think that through the new agreements we are forging, India and the EU have reached a common understanding about the nature of our world. And we can partner to develop a new one, a much more cooperative, prosperous, and stable world founded on our commitment to democracy. Decisions made today will determine the course of our history.
We have an unprecedented opportunity to create a strong partnership. I truly believe this. As a European, just a normal European, I celebrate India’s rise. The EU’s partnership with India is a milestone in our march to digital connectivity.A march that billions are aspiring to make.
Digital connectivity is about economic growth and reducing poverty. Above all it’s about people. Take the Kerala region of India, tracking weather conditions and wholesale prices via mobile phones increased profits for fishermen & dropped prices for consumers. The impact of digitalization on towns and rural communities is a reality. At the heart of it is the empowerment of millions of citizens who can change their lives for the better and increase their life choices and chances due to digitalization. We must celebrate EU-India partnership not only for its digitalization backbone but also for its contribution to a more stable, prosperous and democratic world.
The author is a Professor at ULB, Brussels, Senior Expert @EU_Commission, diplomat, Stanford Center for Internet. Views expressed are personal.
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