Indian Prime Minister (PM) Narendra Modi virtually participated in the India-European Union (EU) Leaders Meeting 2021 which was held in a hybrid format on 8th May 2021 in Porto, Portugal. It is the 1st time that the EU has hosted a meeting with India in the EU+27 format.
i.The Meeting was hosted by Prime Minister of Portugal, Mr Antonio Costa (Portugal holds the Presidency of the Council of EU for the year 2021).
ii.India participated in the meeting virtually, while the Leaders of the 27 EU Member States met in person in Porto-Portugal.
iii.India was invited to a meeting by President of EU Council Charles Michel.
iv.Discussions were held on 3 key areas – Foreign policy and security, COVID-19, climate and environment, and trade, connectivity and technology.
v.During the meeting, the two sides adopted/signed key initiatives. They are
- The two sides adopted a Comprehensive Joint Statement
- India-EU launched Connectivity Partnership
- Signed Finance Contract for funding (2nd Tranche) for Pune Metro Rail project – Euro 150 million (~ INR 1, 335 Crore).
India-EU to resume talks on Trade Agreement
India & the EU agreed to resume talks for a comprehensive Free Trade Agreement (FTA) after a gap of 8 years.
- FTA negotiations between India & the EU were suspended in 2013 after both sides failed to reach a common understanding on the Bilateral Trade and Investment Agreement (BTIA).
- Apart from the agreement, the two sides also agreed to initiate negotiations for a standalone investment protection pact.
Signing of the India-EU Connectivity Partnership Initiative
The two sides signed & launched the India-EU Connectivity Partnership initiative.
- The partnership will ensure transparent, inclusive, and rules-based connectivity between the EU and India and with Third World Countries & Regions (Africa, Central Asia and the Indo-Pacific).
- It aims to work together on regulation and support for private investments in 4 sectors like Digital, Transport, Energy, and people-to-people (with particular emphasis on the twin digital and green transitions).
- India is the 2nd country (after Japan) with which the EU has signed a Connectivity Partnership.
- The partnership is seen as a response to China’s Belt and Road Initiative.
ii.The implementation of the partnership will be aligned with that of the India-EU 2025 Roadmap.
iii.Under the partnership, particular focus will be given on Regional Connectivity in the Third World Countries/Regions.
- BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) has been identified as one of the geographical zones to focus on.
- BIMSTEC comprises India, Nepal, Bhutan, Bangladesh, Myanmar, Sri Lanka and Thailand.
- It is seen as a bridge between South Asia and Southeast Asia.
Índia-EU sign 3 Projects
Ahead of the India-EU Meeting, European Investment Bank (EIB) announced 3 new measures to support India’s COVID-19 recovery.
|EUR 100 million (~ INR 892 Crores)||For Sustainable Private Equity Initiative (Launched by EIB & State Bank of India – SBI).|
|EUR 300 million (~ INR 2, 677 Crores)||For Urban Metro Rail Projects of Kanpur (Uttar Pradesh) & Pune (Maharashtra)|
|EUR 250, 000 (~ INR 2.23 Crore)||To help India cope with COVID-19|
EIB & SBI to invest EUR 100 million in NEEV Fund II
i.EIB & SBI signed a cooperation agreement to invest Euro 100 Million (~ INR 892 Crores) in Equity Financing to support Indian SMEs (Small & Medium Enterprises) which are aiming to develop innovative solutions for climate action.
- For this purpose, the two entities have set up the new ‘NEEV Fund II’.
- It is one of the EIB’s 1st private equity investments in India
- The initiative will be managed by SBICAP (SBI Capital Markets), a subsidiary of SBI.
- It will allow innovative and growing Indian companies to use equity finance to accelerate sustainable investment and climate action.
ii.NEEV Fund was launched in 2015 by Indian PM Narendra Modi & David Cameron, the then PM of the United Kingdom to make an investment in 8 low-income states of India to create sustainable development.
EIB’s EUR 250, 000 donation to India
EIB announced an emergency EUR 250, 000 donations (~INR 2.23 Crores) to India to respond to the escalating COVID-19 Crisis.
- The donation will go to UNICEF Luxembourg, Red Cross International & Malteser International to acquire life-saving equipment to improve access to oxygen.
- It will also help in reinforcing key emergency services like ambulances, blood supply and a 24/7 helpline to raise awareness on COVID-19 immunisation.
EIB commits 2nd Tranche of 150 Million Euros for Pune Metro Rail Project
i.European Investment Bank committed the 2nd tranche of 150 Million Euros (~ INR 1, 335 Crore) for the Pune Metro Rail Project.
- It will be used for the Construction & Operation of Corridor 1 & Corridor 2 of the Pune Metro (Totaling length – 31.25 km).
- The 1st tranche of 200 Million Euros was signed between the Government of India & EIB on July 22, 2019.
- EIB had approved a total loan of 600 Million Euros to fund the Pune Metro Rail Project.
- Maharashtra Metro Rail Corporation Ltd (MAHA METRO) is the Implementing Agency for the project.
- EIB has already invested around EUR 2.6 Billion in urban metro systems in Bhopal, Kanpur, Pune, Lucknow and Bangalore.
ii.The agreement was signed by K Rajaraman, Additional Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of GoI & Christian Kettel Thomsen Vice President, EIB.
Piyush Goyal addresses India-EU Business Roundtable
Union Minister for Commerce & Industry Piyush Goyal virtually addressed the closing session of the ‘CII: EU-India Business Roundtable’ (CII – Confederation of Indian Industry).
- Discussions were held to strengthen the bilateral cooperation in the areas of climate, digital and healthcare and to support increased trade and investment.
- EU was India’s Largest Trading Partner in 2019. The EU was India’s 2nd largest export destination.
About European Union (EU)
Members – 27
European Council President – Charles Michel
European Parliament President – David-Maria Sassoli
European Commission President – Ursula von der Leyen
European Commission Headquarters – Brussels, Belgium
About European Investment Bank (EIB)
President – Werner Hoyer
Headquarters – Kirchberg, Luxembourg