Will Modi's Europe Tour Get India A Pie Of Global Supply Chain? 

Prime Minister Narendra Modi is touring Europe at a time when the region is witnessing its worst geopolitical crisis since World War II with ongoing invasion of Ukraine by Russia. The Russia-Ukraine war has pitched the European Union and the US against Russia. The European Union and the US have imposed hard sanctions against Russia to deter it from escalating the crisis, but the sanctions have not proven to be a deterrent, as the war has been ongoing from over two months now, with no end to hostilities in sight. 

Why Europe Tour Assumes Significance  

Modi’s tour assumes significance as the European Union and the West are wooing India to be on its side and take a stand against the Russian invasion. Last month, UK prime minister Boris Johnson was on a bilateral trip to India, where he signalled target of concluding negotiations for a free-trade deal between India and the UK by October and unveiled an expanded defence partnership that envisages easier access to British military hardware and technology to India. 

Around the same time, president of the European Commission Ursula von der Leyen visited India and held meetings with Modi, President Ram Nath Kovind and external affairs minister S. Jaishankar. 

Soon after the meetings, India and the European Union were expected to hold an initial round of negotiations on a free trade agreement (FTA) in June with the aim of concluding it by late 2023 or early 2024. This announcement was made by European Union ambassador to India and Bhutan Ugo Astuto. 

This was the second round of FTA talks with Europe after failed negotiations with the 27-country economic bloc in 2007. These talks had stalled in 2013 as both sides failed to reach an agreement on key issues, including intellectual property rights, duties on automobiles and spirits and the movement of professionals. 

Why India Is In Focus Again 

The renewed interest of the Western world on India and South Asia is indicative of a shift towards India, and the larger South Asia, from China in an attempt to counter its belt and road project. “If you go back even six-seven years and look at policy documents of the European Union, at that point belt and road project was the only game in town. But, what we have seen since 2017 is an attempt to hook up with Japan, India and ASEAN countries for infrastructural connections to counter the Belt and Road Initiative,” Edward Ashbee, professor of international economics, government and business, Copenhagen Business School, told Outlook Business in an exclusive interview. 

“While there is still some expansion in China, many firms have realised that they have to compete on what they see as unfair terms with the state-owned firms. As a result, many firms which have the resources are keeping their hold in China, but they are also diversifying their supply chains in other South Asian countries. It is not so much about building markets, but safeguarding markets and supply chains,” Ashbee added. 

Meanwhile, from Berlin, Modi will travel to Copenhagen on Tuesday, where he will have a bilateral meeting with Prime Minister Frederiksen, during which the two leaders will review the progress in India's unique Green Strategic Partnership with Denmark as well as other aspects of bilateral relations. 

Modi will also participate in the India-Denmark Business Roundtable as well as interact with the Indian community in Denmark. 

On May 4, Modi, during a brief stopover in Paris, will hold talks with French president Emmanuel Macron, who was re-elected to the post last month. 

Government sources have said that in his first visit abroad this year, Modi will have 25 hectic engagements in his three-day trip to as many countries where he will spend around 65 hours. 

That India and Europe have chosen to engage just as the world is emerging from the pandemic to a changed global order shows that India’s place in the post-Covid-19 and post-Ukraine-war world will be a new one, in which some developed countries may see India as a reliable ally to help maintain its supplies.