India has a multi-dimensional relationship with the European Union (EU), its main trading partner, a major source of foreign direct investment (FDI), an important technology source and the home of a large Indian diaspora. India sees the EU no longer as a mere trading bloc, but as an increasingly important political action, a global policy with a growing profile and a growing presence.
After independence, the Indian government became interested in the common market early on, mainly because of trade problems, although until 1957 there was little trade with Western European countries.
Indian efforts for a new one; The post-colonial relationship with the European Economic Community (EEC) has proved difficult, the Treaty of Rome, with the exception of the “associated” Member States and the overseas territories of the Member States, without reference to the rest of the Third World.
British application for membership of the EEC
The Indian fears of Britain’s possible accession to the EEC were twofold. First, India’s exports of finished goods and primary products such as tea would likely be replaced by “European products” and “associated” territories in the United Kingdom, India’s largest market.
Secondly, the issue of British accession also surfaced in the crisis and huge trade deficits that had to be financed by massive withdrawals of foreign exchange reserves during World War II.
India’s policy towards the EEC during the Nehru era (1947-1964)
It was in the broader context of North-South relations. It was mainly based on political priorities which, due to French persistence, were concentrated mainly on French-speaking countries. Nehru also feared that the gap between developed and developing countries would widen if the Common Market became a self-contained regional group and transformed into a club of the rich.
At no time has India seriously considered the possibility of being an associate member of the European Community. Six founding countries were also reluctant to offer associations to the Commonwealth states of South Asia based on high-yield, low-wage industries.
Securing Market Access, 1963-1973
For a decade (1963-1973), India’s efforts focused on improving market access for large Indian exports and reducing their chronic trade deficit with the EEC, the most important of all trading partners. This has been regulated, in whole or in part, for each individual product by concluding Customs accounts. Although the EEC introduced the Generalized System of Preferences (GSP) in 1971, India considered that the GSP was unstructured to solve the specific problems of India resulting from the loss of preferential access to the UK market.
Many of the major Indian exports, including jute, coconut fiber, cotton textiles, and tobacco, have either been excluded from the scheme or are subject to certain rules.
Under the terms of the Memorandum of Understanding annexed to the United Kingdom’s Accession Treaty (1973), the EEC agreed to discuss potential trade issues with Asian Commonwealth countries in order to find solutions to find solutions. India was considered the “baby of Britannia” and it was up to the British to fight for it.
The five-year agreement on non-preferential trade cooperation, which India finally signed in 1973, contained no new tariff concessions but provided both a primary and a contractual basis for relations between India and the EEC. , However, the deliberate development of market opportunities for India remains a low priority.
India took the initiative in 1978 and sought to extend the scope of the 1973 agreement by concluding a new Non-pre-emptive trade and economic agreement of 1981 extending cooperation to other sectors.
India has given the West a higher priority than the market; Source of technology and FDI and became increasingly interesting because of its policy of liberalization and economic reform (1991), the acquisition of nuclear weapons in the 1990s and regularly improving relations with the United States.
An ambitious third generation partnership and development agreement was signed on 20 December 1993.