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Opinion | India must rediscover its ties with Central and Eastern Europe

So long as these countries were part of the European Union institutional framework, New Delhi was relaxed. However, with Beijing’s increasing influence in the region, New Delhi seems to have woken up

September 26, 2018 / 03:54 PM IST
Prime Minister Narendra Modi

Prime Minister Narendra Modi

Gulshan Sachdeva

Vice President Venkaiah Naidu has just visited Greece, Romania and Serbia. Just before that, President Ram Nath Kovind had made a visit to Bulgaria, Cyprus and the Czech Republic. Normally these are routine, low-key ceremonial affairs. Apart from official media, they generate limited interest.

Looking carefully, however, it seems these visits are part of a well-planned Indian strategy to re-enter a neglected area, suddenly becoming geo-strategically important.

Traditionally, the erstwhile ‘Eastern Europe’ was a friendly area with significant political, economic, cultural and defence ties. The nature and character of the then India-Soviet relations broadly determined our commercial ties with this region as well. These were institutionalised through rupee-rouble trade agreements with individual countries. Yugoslavia had strong connections with India, as it was one of the strong pillars of the Non-Aligned Movement (NAM).

After the Soviet break-up, the countries in Central and Eastern Europe (CEE) moved towards the European Union (EU) and NATO. As a result of their economic and political transformation as well as move towards Europeanisation, our trade and economic ties declined considerably.


Although India has a strong goodwill in the region, our commercial engagement has been relatively limited. India’s overall trade with the region is about $6 billion. Some Polish companies have made significant investments in India. Indian IT and pharmaceutical companies are active in the CEE. More and more Indian students are also discovering universities in the region where they can get reasonably good education at a relatively low price.

Today’s geopolitical scenario in the region is more complex than before. The former Yugoslavia has been replaced by six new independent nations — Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia. Kosovo, another Serbian autonomous area, also declared its independence. Supporting Serbia's sovereignty and territorial integrity, India does not recognise Kosovo.

As many of the CEE countries have joined the EU, they became part of the larger India-EU partnership. Although some of the economies are doing well, the earlier fascination with the EU has faded. Populism is on the rise.

Some of the countries, such as Hungary and Serbia, are seriously working with China and Russia. Since 2012, China is engaged in the region through its 16+1 initiative. Under this format, Beijing has intensified its ties with 11 EU member states from the region and five Balkan countries. In the region, it has signed strategic partnerships with Poland, Hungary and Serbia. Apart from Greece, many of the infrastructural projects under the Chinese Belt and Road Initiative (BRI) are implemented in central and south-eastern Europe. The region is also important for the recently announced EU’s Europe-Asia connectivity strategy.

So long as these countries were becoming part of the EU institutional framework, New Delhi was relaxed. A proximity towards Serbia and Russia was equally fine. However, with Beijing’s increasing influence in the region, New Delhi seems to have woken up.

Prime Minister Narendra Modi has made more than a dozen official visits to West European capitals. However, he has not made a single visit to this region. New Delhi has strategic partnerships with the EU as well as France, Germany and the United Kingdom. Some of the countries from the region, such as Poland, are traditionally close to India and have significant weight within the EU institutions. Still, India has no strategic partnership in the region.

With a clear strategy, India has the potential to regain its influence. Similar to the India-Nordic summit, New Delhi must initiate formal institutional engagements. At the moment, these countries are covered under the India-Europe 29 Business Forum (IE29BF). The fourth IE29BF took place in Delhi in March. These 29 countries are part of the Ministry of External Affair’s central Europe division, which covers not only the CEE, but also the Nordic and Baltic regions as well as Turkey. This is too large and diverse a platform for any meaningful engagement.

The initial engagement in the region can begin with Visegrad-4 (the Czech Republic, Hungary, Poland and Slovakia), which could be extended to others later. Already our trade with Visegrad-4 is close to $5 billion. Overall, Indian investments in the region have concentrated in the IT sector and pharmaceuticals.

All major Indian IT firms, including Infosys, TCS, WIPRO, HCL, etc. have a strong presence in the region. Apollo Tyres have made a 475-million-euro investment in a greenfield plant in Hungary. Romania is another country which is important for petrochemicals. ArcelorMittal has made significant investments in Romania.

Apart from an annual regional summit, there is also a strong case for engaging one or two key countries through strategic partnership. Any positive movement on the India-EU FTA would further help our commercial ties with this region as well.

Gulshan Sachdeva is Jean Monnet Chair and director, Europe Area Studies Programme, Jawaharlal Nehru Univeristy. Views expressed are personal.
Moneycontrol Contributor
first published: Sep 26, 2018 03:54 pm
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