BRUSSELS – It was in 2004 at the Hague summit that the European Union and India agreed to build a Strategic Partnership, after the European Union identified, in its security strategy of 2003, India as a country with whom it should develop such a partnership along with the United States, Canada, Russia, Japan and China.
The European Union and India began on Wednesday three days of negotiations in New Delhi in an attempt to break the logjam that is holding up the free trade agreement deal by the end of 2010.
The European Union has been trying to include global warming, intellectual property rights and child-labour policies in the negotiations, but India has opposed the inclusion of what it calls "extraneous" non-trade issues.
The negotiations began three years ago.
The attention that the Americans and Chinese are giving to India is what influenced the European Union to seek a strategic partnership with India. European Commission officials pointed out that the EU – India relations will grow steadily, but with a low profile.
India has emerged as an economic power that is riding on its financial success story and its growing economic ties. It is focusing on greater world-wide visibility as well as political clout and has the potential of being one of the world’s major geopolitical players.
New challenges arose while Europe's attention was fixed on Russia, Eastern Europe and China. India, that was somewhat neglected by the European Union policymakers, gained in importance.
After the fall of the Soviet Union India's policies were no longer tied to any country, and it has aggressively pursued its own independent agenda.
India has been pushing for free trade pacts world-wide.
Traditionally, the Indian foreign policy tended to concentrate on four large EU member states: France, Germany, the United Kingdom and Italy since they are major players in trade.
India has yet though to come to grips with the EU as an umbrella institution for European countries.
In the "new" Europe, India needs to devote greater political energy and to develop a closer linkage with some of the new members, for example Poland.
The enlarged Europe requires from India a new mindset about a changing Europe, which in many respects is no longer what it used to be.
India's information technology and computer companies are seen as the second Silicon Valley. While they are earning India its much needed currency, the success is mostly limited as the rest of India lags behind. Nearly a third of India's population still lives below the national poverty line.
India's middle class is growing fast, and its consumer needs are contributing to domestic economic growth, but India's full economic growth is still years away. But for now there is an increased demand for foreign investment and technical expertise which means that Europe is standing to benefit from this trend.
India can also gain in the process only if it improves its infrastructure and provides an investor friendly policy environment. It is therefore essential for India to seek to become more competitive in order to maintain and enhance investments originating from European Union member states.
India has also been active politically in strengthening its relationship with Russia and China through economic and military cooperation. It is also active in Central Asian countries through economic cooperation and showed interest in oil and natural gas-rich Central Asia. It has also expressed interest in several pipeline projects that would give it access to much needed energy reserves.
By the year 2015 India's energy demand is set to rise by 50 percent. Given the growing Chinese influence in Central Asia, Russia might welcome India to serve as counterbalance as the Indian economic presence and influence in Central Asia is expected to grow in the coming years.