For years, Europe looked at India with cultivated indifference. China was the flavour of the season.
Trade between the European Union (EU) and China surged to an annual $828 billion in 2021. Meanwhile, India-EU trade limped along to $92 billion.
Three factors have, however, cooled the romance between the EU and China.
First, COVID-19 dealt a blow to China’s infrastructure projects across Europe. Work on the Belt and Road Initiative (BRI), designed to create a new Silk Route from China to Western Europe, ground to a halt.
Second, Beijing’s aggressive militarisation in the South China Sea raised red flags in Brussels. China reacted by insisting on strict European adherence to the “One China” policy. When EU member-state Lithuania allowed Taiwan to open a representative office in its capital Vilnius in November 2021, Beijing reacted with fury. It snapped diplomatic ties with the Baltic nation and expelled the Lithuanian ambassador from Beijing. Relations between the EU and China have since worsened.
The third factor affecting Europe-China ties could be the most significant: China’s quiet support for Russia’s invasion of Ukraine. The EU has reacted angrily. Several European companies in China are considering their options, including moving some supply lines to Vietnam, the Philippines and India.
Western Europe has spent 77 years after the end of the Second World War that killed over 50 million Europeans to build a peaceful, prosperous Europe. The Balkan wars in the 1990s which dismembered Yugoslavia were confined to Eastern Europe.
Russia’s invasion of Ukraine has brought the spectre of war back to Western Europe. If Ukrainian forces attack targets on Russian soil, Moscow has threatened to bomb Kyiv’s government headquarters regardless of whether Western military advisors are present there.
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Britain’s minister for the armed forces, James Heappey, said recently that it was “completely legitimate” for Ukraine to carry out strikes on military targets on Russian territory. He added that it was “not necessarily a problem” if British weapons were used to attack Russia. If Russia retaliates, hitting Western military advisors stationed in Kyiv, the war could spiral out of control.
West European politicians are fearful of such an outcome. They have become gentrified after 77 years of peace. They willingly participated in airstrikes on Syria, Iraq and Yemen. Their armies fought the Taliban for two decades as part of NATO in Afghanistan. But a land or air war in Western Europe is unthinkable.
The stream of European leaders who came to New Delhi last month to discuss geopolitical strategy had an overriding agenda: Wean India off Russia and cajole Delhi to condemn Moscow for the invasion of Ukraine.
External Affairs Minister S Jaishankar asked his European counterparts three pointed questions: Where were you when China attacked India on the Line of Actual Control (LAC)? Why did you abandon Afghanistan to the Taliban, exacerbating the security environment in South Asia? When was the last time an EU member-state condemned Pakistan for sponsoring terrorism in India?
In Berlin, Copenhagen and Paris this week, Prime Minister Narendra Modi has a clear-eyed strategy: Talk up trade, talk down the Russia-Ukraine conflict. Moscow and the West are engaged in an economic battle to see who blinks first. Sanctions haven’t crippled Russia. Its economy will likely shrink by 10 per cent this fiscal but the rouble is now actually above its pre-war exchange rate against the US dollar.
By cutting gas supplies to Poland and Bulgaria until they pay in roubles, Russia has turned the tables on Europe which gets 38 per cent of its gas from Moscow (Germany alone receives 50 per cent of its energy supplies from Russia). As a result, gas prices have soared by over 20 per cent in Europe. Inflation in Western Europe and in the US has spiked to levels not seen for 40 years. The problem may not be short-lived.
According to Liz Truss, Britain’s foreign secretary, the Russia-Ukraine conflict could drag on for ten years. She said in a foreign policy speech at Mansion House in London at the Lord Mayor’s banquet on 27 April: “We cannot be complacent — the fate of Ukraine hangs in the balance. But let’s be clear — if Putin succeeds there will be untold further misery across Europe and terrible consequences across the globe. We would never feel safe again. So we must be prepared for the long haul. We’ve got to double down on our support for Ukraine. My vision is a world where free nations are assertive and in the ascendant. Where freedom and democracy are strengthened through a network of economic and security partnerships. Where aggressors are contained and forced to take a better path. This is the long-term prize: A new era of peace, security of prosperity.”
Truss is widely tipped to succeed Boris Johnson as British prime minister if he is forced to step down following the allegation that he knowingly misled Parliament over COVID-19 violations during Britain’s strict lockdown in 2021. Rishi Sunak, Chancellor of the Exchequer, and earlier regarded as Johnson’s natural successor, has been ambushed by Britain’s venomous press over wife Akshata’s tax status.
Europe’s disarray meanwhile gives India new opportunities. The India-EU free trade agreement (FTA) that had been put on the backburner is on the table again. Modi must push for an early deal even as negotiations with the UK and the Gulf Cooperation Council (GCC) speed up.
In purchasing power parity (PPP), India’s GDP in 2021-22 is estimated at around $8.5 trillion. The GDP (PPP) of all 27 EU nations put together is estimated at around $15 trillion. India’s economy is growing at 7 per cent a year. EU economies are facing recession and at best will struggle to grow in the near future at an annual average of 2 per cent. India’s GDP (PPP) is already double Germany’s, the EU’s largest economy and its industrial powerhouse.
Modi’s three-day blitz through Germany, Denmark and France will not lead to substantial advancements on trade. But Europe has got the message. India is not to be lectured to. It is a democracy, a large market for European products, the world’s fastest-growing major economy, and an indispensable security partner in the Indo-Pacific against a hostile China.
Russia’s war on Ukraine has delivered much-needed strategic clarity to European minds.
The writer is editor, author and publisher. Views expressed here are personal.
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