Modi 3.0 and Europe-India Relations: What Next?

Introduction

Following Narendra Modi´s historical return to power for a third term in June 2024, there is likely to be a continuation in Indian foreign policy despite the reduced leverage of the Bharatiya Janata Party (BJP) within the National Democratic Alliance (NDA)-led coalition government. The BJP lost 63 seats from its 2019 results (303) and thus fell 32 short of a majority (272 seats).

Modi’s party’s loss of a majority in the Lok Sabha, India’s lower house, is unlikely to translate into significant changes in its broader foreign policy vision. The recent general election results have shown how the Indian electorate’s concerns remain tied to bread and butter issues, despite Modi’s attempt to capitalize on India’s successful G20 Presidency in 2023 and increased international status. While the Indian elite continues to support India’s quest to become a leading power, this did not trickle down as expected electorally-speaking.

India has also not constrained its relationship with Moscow following the Russian war on Ukraine; it has expanded its geo-economic component instead.

Modi’s foreign policy priorities and where Europe stands amidst them are unpacked below. China and Pakistan remain India’s key security concerns. Arguably, China’s growing penetration and success at co-opting India’s neighbors has become New Delhi’s Achilles’ heel. These concerns currently shape India’s Indo-Pacific strategy and partnership-building in the Indian Ocean Region (IOR). Yet India is not only looking at the world through a geo-political prism but also from a geo-economic one. This explains Modi’s first foreign bilateral visit to Moscow instead of a neighboring country. Modi’s visit to Poland and Ukraine, six weeks later, shows how India further wishes to be perceived as strategically autonomous and as a potential interlocutor between the warring parties; the task of a leading power. The continuation of the war in Ukraine will continue to tighten the Russia-China rapprochement, to New Delhi’s discontent.

Europe and Russia remain compatible and available options in New Delhi’s multi-alignment playbook. Europe is an option but not an immediate priority area, as explained in the following lines. Yet there is unfulfilled potential to be tapped into the relationship, as this year’s Nordic India Dialogue shows. In addition, the EU’s regulatory experience, technological know-how and investment capacity in areas such as trade facilitation, digital, green technology, or maritime security are relevant to India. Additional shared interests, such as on counterterrorism or hybrid threats, must be explored further.

Modi’s 3.0 foreign policy priorities: India’s balancing act

India continues to seek its place amidst the global power balancing act between the U.S. and the West versus Russia and the Global South. External Affairs Minister S. Jaishankar views the East-West divide and the North-South gap as key contradictions in today’s world order from which India should benefit. Let’s not forget that India aims to become a developed country by 2047 as epitomized by the Indian government’s Vision Viksit Bharat @2047 action plan. Given that nearly half of India's Gross Domestic Product (GDP) is linked to its external sector, the country faces significant external dependencies, particularly in critical areas like energy, technology, and capital. Consequently, foreign policy is not just a diplomatic tool but a key driver in accelerating national development, fostering modernization, and ensuring sustainable growth.

This included Maldives’ President Muizzu, despite Maldives’ Beijing-leaning stance in recent times, in contrast to the previous government. The recent unexpected turn of events in Bangladesh that have led to the violent fall of Sheikh Hasina, New Delhi’s trusted partner, further shows the volatility of domestic politics in the region. A.K. Dissanayake’s coming to power as a result of the recent Sri Lankan Presidential elections constitutes an additional hurdle for New Delhi. Shifting power dynamics across the IOR reflect how the US-China rivalry intersects with Chinese penetration into New Delhi’s historical sphere of influence.

Secondly, India is keen to reinforce its relations with other regional middle powers, such as Japan, Indonesia, the Philippines and South Korea as well as with Western powers across the Indo-Pacific. The Indian Ocean and the broader Indo-Pacific are increasingly at the heart of the EU´s geo-economic and geo-strategic interests. Yet New Delhi also intends to remain present in Eurasia. Here, the available partners are Russia and Iran, Turkey to a lesser extent. To assert its influence in Central Asia and Eurasia, India must engage with these countries and balance its overarching regional priority in the Indo-Pacific.

Where does Europe stand?

So where does Europe stand amidst India’s geo-political and geo-economic chessboard? As noted by S. Jaishankar, the EU is gradually emerging out of its fortress mentality, while its engagement towards Asia was determined mostly by the transatlantic relationship and its management of Russia. New Delhi’s and Brussels’ geo-strategic interests diverge significantly when it comes to Russia, yet this has not fundamentally impacted their relationship - not for now. The future trajectory of India’s approach to Europe will largely depend on whether both sides can develop a more unified stance on China. Convergences remain around mutual economic prospects in the technology, connectivity and supply chain resilience realms, as well as in shared interests related to counterterrorism and maritime security.

India has parallel ongoing FTA negotiations with Australia, Canada (currently on hold), the Gulf Cooperation Council (GCC) and Oman, while seeking to revise its FTAs with ASEAN countries due to the Chinese-led Regional Comprehensive Economic Partnership Agreement (RCEP). There could be a chance of renewed talks with the US on an FTA if Trump comes to power.In the area of technology cooperation, there are also wide margins for collaboration where the EU possesses regulatory experience, technological know-how and investment capacity. This could include digital regulation, trade facilitation schemes or climate adaptation strategies, for example. The launch of the EU-India Trade and Technology Council (TTC) in 2022 constitutes a welcome stepping stone in this regard. There is much room for expansion and consolidation still, even in the absence of an FTA.

Beyond bilateral economic cooperation, the EU-India partnership also develops in the IOR. Relations with India remain a key vector for EU’s growing investment in that region, be it through conducting joint naval exercises, in maritime domain awareness or in the securitization of Exclusive Economic Zones (EEZs) of littoral IOR states. New Delhi has become particularly adept at plurilateral partnerships in maritime security and maritime safety, connectivity, economic security and climate change.The EU now has Dialogue Partner status in the Indian Ocean Rim Association (IORA) while India is part of the EU-led Minerals Security Partnership (MSP) Forum initiative, for instance. In the future, EU-India engagement could take the route of more minilateral cooperation formats with third partners.

At the multilateral level, India will seek support from Europe on two priorities. India, under Modi 3.0, will continue to push for the reform of the United Nations (UN) with the ambition to gain a permanent seat at the United Nations Security Council (UNSC). In this regard, it sees France, as a permanent UNSC member, and the Group of Four (G4) - that includes Germany - as crucial actors towards achieving its goal. New Delhi has a second priority with regards to the anti-terrorism agenda. India should be expected to continue to push for a Comprehensive Convention on Terrorism at the UN level, an area of concern too in Ursula von der Leyen’s recently-issued Political Guidelines.There have been prior bilateral discussions on the topic, the focus of which could be linked to hybrid threats and foreign interference, of utmost concern to both.

From Moscow to Kyiv

Prime Minister Modi's state visit to attend the 22nd India-Russia Summit in early July 2024 sparked significant concern across Europe. His subsequent visit to Kyiv was widely seen as an attempt to smooth relations and control damage with Western powers. However, for New Delhi, the Kyiv visit carried a deeper significance. It underscored India’s aspiration to be viewed as a leading power,- a ‘Vishwaguru’, world leader/teacher, and a ‘Vishabhandu’, friend to the world. Zelensky’s choice of India as a potential host for a second peace summit is indicative of this. Beyond that, India has a geo-strategic interest in the end of the Ukraine War, which is likely to reduce Moscow’s current dependency on Beijing for dual use military and economic support.

Firstly, New Delhi sees Moscow as a counterbalance to China. Therefore, India’s interest to keep Russia on its side in line with continuing border tensions with China remains a priority over its partnerships with Western countries. The EU and India clearly diverge on this, though the potential consolidation of a Russia-China alliance is a cause for concern for both. However, what is perceived as India’s partisan positioning towards the Russian war in Ukraine has had little impact on EU policies towards New Delhi so far.

Secondly, India has a clear geo-economic interest in Russia´s commodities and overall exports. New Delhi has benefitted massively from cheaper oil imports as the growth by 66% in trade during 2023 shows. So far, both countries have managed to circumvent European sanctions on Russia. In order to maintain this, however, India needs to develop a sustainable payment mechanism for its Russian oil beyond Indian rupees that avoids a conversion to US dollars. There is an overall trade imbalance between both countries to Russia’s benefit, though Indian exports to Russia are increasing. Russian percentages of arms exports to India have diminished despite remaining as the first destination of Russian arms during 2019-23, followed by China.

Thirdly, New Delhi is also focused on expanding its connectivity initiatives and the narratives surrounding them. India views Russia's access to the North Sea trade route through the Arctic as a critical asset, particularly for diversifying its trade routes. It also acknowledges how the International North-South Transport Corridor (INSTC) could be further stagnated under a hawkish anti-Iran Trump-led U.S. Administration. The Chennai-Vladivostok maritime route is therefore a welcome alternative, particularly since it allows for growing Indian investments in the Russian Far East. Agriculture, mining, manpower, energy (including nuclear), biotechnology and maritime transport were part of the discussions during the India-Russia summit. Joint Indo-Russian ventures in South Asia and Southeast Asian countries are also on the rise, as the cases of nuclear power plants in Bangladesh or the joint production and export of missiles to Vietnam and the Philippines show.

Finally, the Indo-Pacific region is of increasing geo-strategic interest to Moscow to compensate for its confrontation with Western powers following the Russian invasion of Ukraine. For a while, Moscow viewed the Indo-Pacific concept as a security containment strategy directed at China and as an effort to promote a two-block system in Asia. In fact, its original interest in the Indian Ocean was mostly linked to its intervention in Syria and to securing its presence in the Red Sea. Following the outbreak of the Ukraine War, guaranteeing Russian ships’ safety of navigation across the Indian Ocean has become imperative to its economy and to feed its people. For this purpose, closer maritime engagement with India has become instrumental.

Going forward: European partners’ relevance for India?

It is likely that Modi’s government will seek to maintain an active engagement with its European partners, as during his previous term: Modi’s attendance at the G7 Summit held in Italy earlier this year is indicative of this. Europe, and increasingly the EU as an actor in itself, fit in well with the Indian establishment’s multipolar views of the world. New Delhi is keen to maintain its strategic autonomy and has become very skilled at balancing its plurilateral partnerships via minilateral and issue-based arrangements. This is no different vis-à-vis its key European partners, namely France, Germany and the Nordic countries. Selected Central and Southern European countries (such as Poland and the Czech Republic or Italy and Greece, respectively) are also moving up on the priority list as the nationalities of European Special Guests attending recent editions of India’s high-profile Raisina Dialogue show.

The Russia-China nexus is another growing source of concern for New Delhi. It is unlikely that European countries will seek to co-opt Moscow against the background of Russia’s war on Ukraine. India can and is already doing so on its own. European countries will likely maintain the same conspicuous silence regarding New Delhi's stance on Russia's war in Ukraine as they have thus far.

Ongoing shifting power dynamics in the Indo-Pacific will further influence India’s relationship with its European partners. There is room for broader EU-India collaboration in key domains such as maritime domain awareness, connectivity initiatives and in a deeper technology partnership, as we have already seen in recent years. The outcome of the U.S. elections will also shape the foreign policy of Western countries and trilateral partnership building between these and India. Interest- and issue - based arrangements constitute a resourceful channel for future Indo-European collaboration in geo-strategic areas such as quantum technologies, space or critical raw materials.

Copyright image : Mast IRHAM / POOL / AFP