India sees EU as a model for ‘even’ development

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India's relations with the European Union currently remain a predominantly bilateral affair between New Delhi and London, Paris or Berlin. But Indian politicians believe the EU is a model from which they could seek inspiration from when it comes to evening up development across its regions. EURACTIV reports from New Delhi.

"The European Union used the structural funds to inject fresh capital and investment into areas that lagged behind. We need to do the same in India," said Jayant Prasad, former India Ambassador to Afghanistan and currently Special Secretary in Public Diplomacy at the Ministry of External Affairs.

Since the 1990s when India dismantled the 'Licence Raj' and opened up to foreign trade, Indian business has boomed. The economy has been growing at a regular pace of more than 8% in recent years.

Although economists consider that India has a long way to go before it is as rich as China, whose economy is four times bigger, they esteem that the growth rate could overtake China's by 2013, if not before.

This new rapid growth is raising issues in the country on how to manage sustainable development in its 29 states and seven federal territories, as well as how to tackle growing inequalities.

"As we are dealing with issues of social justice and equity and growth, we are also dealing with the growing unevenness of the pace of development between different regions," Prasad told EURACTIV, arguing that some Indian regions are still stuck in the 19th Century.

The former Indian ambassador says social indices – such as education, literacy and growth rates – are a clear indication of the regional divide.

"People from all parts of the country must feel to be equally participating in the development of their nation and they should feel they are also equally benefiting from Indian growth," Prasad insisted.

The EU structural funds, which are a key instrument to boost growth and development across Europe's 217 regions, have contributed to reducing imbalances between regions and social groups. As the Union is busy redrawing its regional funding map, India sees such an instrument as a way to reform its agricultural sector and boost development in rural areas and villages.

During EU foreign affairs chief Catherine Ashton's visit to India last year, Mani Shankar Aiyar, a member of the Indian Upper House and a former minister, urged her to share Europe's experience of local self-governance, which could benefit an emerging economy marred for some time by a deep agrarian crisis and chaotic grassroots movements, which have produced uneven social transformation processes.

Coalition politics hampering sustainable development?

Structural funds would be a great idea for India, but India is not Europe, said Rajendra Jain, professor of European Studies at the Jawaharlal Nehru University in New Delhi.

"Since the 1990s India has had a clear level of uneven development, but the inner dynamics of coalition governments makes it difficult to arrive to optimum decisions and you see it clearly reflected in the reform process," he told EURACTIV.

Jain explained that regions would benefit immensely from more organised and clearer leadership.

Citing the example of the Bihar region in north-east India, the Indian professor said the state had turned from a backward to a rapidly booming area, registering 14% growth, as a result of clean political leadership.

"Now the central government devolves fund to the region, because Bihar has done things that were not possible for several decades prior to this current regime that now has won a second term," added Jain.

In search of best practice

However, Jain is not certain that the EU's structural fund model should be applied across the board in India.

India, which now has an observer status at the OECD, is now showing a clear interest in learning from best practices and adapting them to Indian circumstances. "This was not the case 2-3 years ago," said Jain, suggesting that India should seek inspiration from other models.

Another professor of European affairs at the JNU, Umma Salva Bava, conceded that the Indian internal market is not totally unified and schemes should be found to boost the development of depressed regions, building on existing ones like the National Rural Employment Scheme.

Europe is still a magnet for social progress. "India shares so many interests and values with all democracies that have a faith in tolerance and pluralism. There is a natural appeal between India and Europe and India and the United States, with Europe perhaps more because the social vocation of Europe," said Jayant Prasad.

"We are not proud enough of what we have achieved," said Hungarian Socialist MEP Zita Gurmai, vice-president of the Federation for European Progressive Studies, which has taken the initiative to meet politicians and civil society organizations in New Delhi and advance EU-India dialogue ahead of a trip there by the European Parliament's delegation next week.

The EU, which is presently negotiating a Free Trade Agreement with India, could become also a role model for the whole region, said Professor Bava. However, attempts to create a South East Asia Union have lost momentum as a result of political tensions with Pakistan.

"If France and Germany after centuries of conflict have managed to cooperate, why can't India and Pakistan do it?" Bava asked.

Europe can learn from India

If India can learn from the EU, it is indisputable that the same is true the other way around. Bava is convinced that India can give a lesson to Brussels on managing diversity. A nation state with 23 major languages, 22,000 dialects, four major religions and about 85 political parties, India is surely a unique example of diversity.

The Indian model is based on pluralism and political parties have to reach out to others due to the prevalence of diversities, writes Indian MP Shashi Tharoor in his book. As a clear indication of the parallel destinies that make up India's national identity, the country's slogan is 'Unity in Diversity', while that of the EU is 'United in Diversity'.

"Europe can learn from us on how to manage diversity," said Bava, especially given the continent's growing migrant population.

However, if the EU wants a real partnership, it needs to stop preaching to India. "We really have no real issues that divide us," said Taroor in an interview with EURACTIV.

"The only stumbling block is the perception in India that the European Union tends sometimes to preach, particularly on issues which we want to deal with on our own," he said, hinting at the European Parliament's criticism of labour and human rights standards in India, which in the eyes of many Indians will improve once development has picked up.

EU-India relations date back to the early 1960s when diplomatic relations were established. But it was 1994's Cooperation Agreement (which is still the current legal framework for cooperation) that opened the door to the broad political dialogue that has since evolved, notably through annual summits since 2000, and regular ministerial and expert-level meetings.

In recognition of both sides' political and economic importance, the EU-India Strategic Partnership was launched in 2004 to enable the two partners to better address complex international issues in the context of globalisation.

To underpin the Strategic Partnership, leaders adopted the EU-India Joint Action Plan (JAP) at their 2005 summit. The JAP defined common objectives and proposed a wide range of supporting activities in the areas of political, economic and development cooperation.

In recent years, the establishment of a Free Trade Agreement between the two partners has gained momentum and a deal is expected in the spring.

  • By mid-2011: EU and India expected to reach free trade deal.

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