India good destination for production, an example of ‘smart’ regulation: EU Commissioner

Can you give an overview of the visit, the discussions, outcomes and way forward?

Well, the visit of the whole college is really very important. It shows strategic significance, what European Union President and commission puts into our relations with India.

There are several reasons why we consider those relations strategically important. First of all, we are two organisations or countries which are based on the same democratic values, human rights, values, and values of peace.

Second, from economical point of view, I was repeating yesterday and today, that the 21st century, from my point of view, will be from one side the century of space and from another side the century of India. How we can predict developments — global developments, economical developments — till the end of the century. So India has a huge potential, still not fully used, and that is what we can predict.

And the last point really, we can look into very concrete cooperation and partnership in all the different areas, starting from security and defence. European Commission President Ursula von der Leyen proposed to have a strategic pact on security and defence, as we have with Japan and South Korea. And both sides also agreed to have high level strategic space dialogue. That is very crucial and very important.

Also down to real partnership in economy with the forthcoming Free Trade Agreement, which both commissioners responsible for that and Ministers responsible from the government promise almost to finalize negotiations next month. I am not so sure they will but both Commission President and Prime Minister Modi promise that it will be done before the end of the year. And in addition to that, this year is very important, we shall meet to agree again on so called roadmap targets for our strategic partnership for next period of time. So there are plenty of platforms where we can put very clear proposals, both short term and long term, and how we can develop this cooperation and partnership between India and European Union, which would be beneficial for both sides, and beneficial globally and internationally.

In this expanding cooperation, what are EU’s expectations from India?

Our Commission President, yesterday in one of lectures used very good words: this is not the time to place limits on India-EU cooperation. I mean no limits in all the different areas we can look for new possibilities. The world is now living through some kind of geopolitically turbulent times. We have on the one side, Russian war against Ukraine and in Europe we are very much concerned about the threats which Russia is presenting to the entire continent. There are a lot of intelligence services publicly reporting that Russia can be ready to start new oppression against the EU member states before 2030. So it brings, for Europeans, a very clear understanding that we need to ramp up our preparedness, our capabilities, our defence industry, defence production and so on.

From another side, of course, this is not only Russia which is creating all the possible threats to Europe. But we see also some kind of, what they call, axis of aggressive authoritarians. Starting from Russia, then we have Iran, we have North Korea, we have China not far away from that axis. That creates possible instabilities here in the Indo-Pacific. That is why we need to look into joint efforts for possibly how to guarantee security in this region, not just for India.

India is playing a very important role, strategic role, but also it’s important for European Union, not only because we would like to see stability globally, but also because this region is very important for our economic development. We have a lot of trade in this region, and so on. So in short our areas of interest and it’s obvious that we can be very successful in practical cooperation, in economical areas, starting from defence industry and space industry, where both sides have good achievements and we have an ambitious agenda, and where we can bring to each other a lot of added value.

Both India and EU have their strengths and requirements. As Europe looks to scale up capacities, India can be a good option. Any practical ways you have in mind of how to operationalize this cooperation?

For the time being, we are spending our efforts to look into what we need to do and what we can do with our own industry, which will need to develop into a much more powerful industry and to ramp up production and things like that. There are also structural problems with our defence industry. What former Italian Prime Minister Mario Draghi put into his report last year is very important for European Union. But also, of course, there are very broad possibilities for our real cooperation in defence industry.

We should also look into industrial cooperation without limits, both joint ventures, joint production for development of new technologies, research and development, instruments, all of them, in one or another way can be used. We are now developing new programmes at the EU level, for development of our defence capabilities. There are different ideas, different conditions in different programmes. But I see exactly this: Commission President’s proposal to develop strategic pact on defence and security. There are questions for time being, I cannot answer in a very clear way, international property rights and so on.

So is this pact a new one or part of the strategic agreement that is to be renewed?

It’s something new. From Commission President statement it will in some way be repetition of our experience with Japan and South Korea. Timeline, I don’t know. It will depend, on us, on our willingness.

Maritime domain, is a very promising area for cooperation in which some steps have already been taken. What further can be done in this?

I need to make small comment that my portfolio is not about everything. So it’s not directly my in my portfolio, I am much more on the industrial level.

Maritime awareness in general its technologies, or systems of technologies which we need to develop… In our so-called flagship projects, we are also looking at maritime awareness. Because it’s not only Indo-Pacific, for example, in Europe, we’re now facing a lot of, what we call, hybrid attacks or sabotage attacks against our underwater cables, or pipelines, especially in the Baltic Sea, my region.

That is what creates career demand, a clear need to look into also possible new technological developments, how we can be much more effective in surveying, in bringing awareness, in preventing whatever and that means everything starting from space going down to underwater technologies, drones and so on. Of course, going from Baltic Sea going to Indian Ocean, it’s perhaps quite different. In Baltic Sea the deepest is something like 50 meters. So that creates problems that each ship can go, land its anchor and damage the pipelines. I can tell that this is now exactly what we need to look at. And this concept of awareness is everywhere – maritime, underwater and space awareness. We can predict that our dual use systems, not only military ones, but also civilian ones, will very soon become a target of adverse actions.

The QUAD grouping has the Indo-Pacific Maritime Domain Awareness (IP-MDA) which is meant for the entire region. On this, do you see a possibility for cooperation between QUAD and EU?

Personally, I never thought about that too much, but I do not see reasons why we should be not in favour. Again, no limits in the cooperation. For us, the only problem at the moment, our capacities are to defend ourselves. Politically, yes, but if you will ask, what resources can you bring in for real world stuff to do, then it will be a little bit more problematic. But since we are really ambitious into developing all our capabilities, that will come.

You talked of cooperation in niche technologies – cyber, space, AI, There are avenues for cooperation but between India and EU, there are lot of issues in terms of regulation etc. How are you going to work that out?

I will not perhaps answer very precisely. From one side, yes there are those new technologies which need to have regulation. To regulate, I would say the regulation should be smart. In Europe, sometimes we are very good in over regulating. But now, for example, this Commission President is very strong on agenda of so called simplification of regulations, because really the same Draghi report was speaking very clearly that with over regulation, we are losing our competitiveness. So we need to be more smart. Regulation is needed but it should not become a heavy bureaucratic burden for any kind of new technological or business development.

And we proposed to have so called simplification… on defence, and we see how much of support we’re getting, both from the industry, from the Governments. Everybody sends us proposals on what we can do in a more effective way, not wasting time, not having too much of bureaucratic oversight or permissions. One of the problems with our defence industry ramping up is not just where to find the money. Money is always is an issue, but you can resolve them. The problem is how to build a factory. It takes so much of time and here again, India could be very attractive. Because what we have heard from some industries which have expertise in that, Indian businesses can build factory in something like 12 months, to bring into operations. In Europe, that will take four years. So we can not only look into India as a good destination for production and capacity expansion, but also as an example how to make regulation more smart.