The two countries held their first official meeting in two decades as India ups the ante on enhanced ties with Europe. Greater proximity with Europe's richest country can yield big dividends.
Commuters and tourists would not have batted an eyelid when on November 19, the area around Raisina Hill in central Delhi was bathed in a unique hue of blue. Raisina Hill is the seat of power in India with buildings like President's House, North Block which has Ministry of Finance and Home Affairs ensconced in it and South Block which has the all important Prime Minister's Office, Ministry of Defence, External Affairs and the cabinet secretariat and the area is regularly decked up with mood lighting around major festivals and dates of national importance like Independence or Republic Day. So it came as no surprise for the building to be suitably lit up right after Diwali, the festival of lights.
Except that the blue lighting this time was to commemorate the first meeting between India and Luxembourg in more than two decades. Held virtually on Thursday and attended by the prime ministers of the two countries, it led to the signing of three bilateral treaties and a promise of many more in future. These include the Luxembourg Stock Exchange signing an agreement each with the State Bank of India and India International Stock Exchange for greater cooperation in financial services and enable maintenance of security markets with focus on environmental, social and governance and green finance.
The third agreement between LuxInnovation and Invest India is to support and develop mutual business cooperation especially in promoting and facilitating inbound FDI.
“Luxembourg Stock Exchange and funds based out of Luxembourg are the third largest investors in India. Foreign portfolio investments from Luxembourg total more than 3 lakh crore. It is the largest after the US and Mauritius,” said Sandeep Chakravorty, joint secretary, ministry of external affairs in a press briefing after the summit. “Luxembourg's PM has encouraged Indian companies to raise capital for green projects in Luxembourg.”
A land locked state situated in the heart of Europe, Luxembourg is smaller in size than the smallest state in India--Goa, and even less populated than the India's least populated state--Sikkim. Yet, it is an extremely rich country--wealthiest in Europe in terms of per capita GDP and the third richest overall in the world. It is also one of the nerve centres of banking in Europe--along with Switzerland and the even smaller Lichenstein, which gives it considerable clout in the global economy. https://twitter.com/Xavier_Bettel/status/1329443901892145154 India stands to gain much by greater proximity with Luxembourg. It could also open up larger opportunities with other countries in the European Union. Already India has made concerted moves at deepening ties with the Eurozone as a whole in the last few months. Of the 6 virtual summits that were held this month, four were with countries from Europe that included Italy and Denmark besides Luxembourg.
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"This year′s summit is very important. We have been meeting on various platforms but this is the first stand-alone summit since the past two decades," said Prime Minister Modi at the summit. "There is huge potential to expand economic engagement between the two countries. We have a good partnership in the field of steel, financial technology, digital domain but there is a chance of taking it further. I am happy that our space agency recently launched Luxembourg′s four satellites. We welcome Luxembourg′s decision to join the International Solar Alliance. We welcome you to join the Coalition for Disaster Resilient Infrastructure." https://twitter.com/BJP4India/status/1329413072616787968
The increased diplomatic parleys with Europe is not coincidental. It comes at a time when multilateralism in general, is under threat. With the global economy ravaged by the pandemic, countries are looking at their own interests and inclined to close their borders. India has been a strong advocate of globalisation but it is also keenly aware of its own interests as exemplified with its non participation in the Regional Comprehensive Economic Partnership, the largest regional trading agreement in the world, which was finalised just last week. While that is justified--India cannot be part of a group which has China in its midst, it cannot also run the risk of isolating itself perennially.
It is here that stronger bilateral ties and institutions like ISA come into the picture. Championing the cause of solar power and with 121 countries as members, ISA is already the second largest grouping of countries worldwide after the UN. It is just one indicator of the broader leadership role India envisages for itself in the post Covid world order.