Prime Minister Narendra Modi's tour of the Netherlands, Sweden, Norway, Italy, and the UAE highlights a major strategic shift in India's foreign policy. Historically, India's strategic partnerships focused on Washington and Moscow, with Europe treated as a secondary partner. Today, Europe has moved to the centre of Delhi's geopolitical and economic strategy.
The Geopolitical Context: Diversification and Autonomy
Two geopolitical dynamics are driving this realignment:
- Strategic Diversification: The war in Ukraine exposed the risks of relying on a single strategic partner (like Russia for defence hardware or China for industrial supply chains). Both India and Europe are seeking to diversify their partnerships to secure their supply chains.
- Technology and Green Transitions: De-risking from China requires collaborative development of critical technologies, including semiconductors, clean energy, and AI.
Key Bilateral Outcomes
The bilateral discussions during the tour resulted in several concrete partnerships:
| Country | Strategic Focus | Key Deliverables |
|---|---|---|
| Netherlands | Semiconductors & Water Management | MoU on supply chains, connecting Dutch lithography expertise (ASML) with India's semiconductor mission. |
| Sweden | Defence & Industrial Innovation | Defence co-production framework, including Saab's Carl-Gustaf M4 manufacturing facility in India. |
| Norway | Green Shipping & Blue Economy | Joint Green Hydrogen Alliance and funding for decarbonizing maritime shipping routes. |
| Italy | Connectivity & Security | Security dialogue on Indo-Pacific sea lanes and cooperation on the India-Middle East-Europe Economic Corridor (IMEC). |
💡 The ASML Monopoly Factor
ASML, based in the Netherlands, is the only company in the world that produces Extreme Ultraviolet (EUV) lithography systems. These machines are essential for manufacturing microchips smaller than 7 nanometers. Partnering with the Netherlands is a critical step to integrate India into the global semiconductor supply chain.
The Path Forward
While bilateral MoUs are valuable, the real test lies in resolving trade negotiations. Concluding the long-pending **India-EU Free Trade Agreement (FTA)** is essential to lower tariff barriers and create a stable regulatory environment. This agreement will enable sustainable capital flow and technology transfer between the two regions.
