It’s called a “strategic partnership” but relations between India and Europe are largely underwhelming. Expectations are high in Brussels and other European capitals that Narendra Modi will inject some much-needed oomph into EU-India ties.

European Commission President Jose Manuel Barroso’s congratulatory message to the new Indian prime minister voiced hopes that the free trade and investment agreement that Brussels and Delhi have been negotiating for over seven years will finally be concluded.

Other EU policymakers say they want to expand and strengthen Europe’s relations with the world’s largest democracy beyond the current business and trade focus.

Modi is certainly expected to look at Europe with more interest than his predecessor and the new Indian government’s focus on economic reforms and jobs augurs well for European companies seeking to enter the Indian market.

Still it won’t be easy. With India’s economic reforms and liberalisation programme running out of steam and growth falling to less than five per cent annually, foreign policy and especially relations with Europe may have to take a back seat as the new prime minister seeks to turn election pledges into effective national policies.

Not surprisingly, Modi spoke little about foreign policy during the election campaign, leading to speculation that a drastic shift from past policies is unlikely, not least because of the continuity provided by India’s permanent bureaucracy. Analysts concur that the government’s engagement with the outside world is expected to focus heavily on trade and investment.

Many in Europe are impressed by the Modi-Nawaz Sharif meeting last month, seeing this as a strong sign that the new Indian leader wants better relations with Pakistan.

The optimistic view is that Modi will follow in the footsteps of the former Indian prime minister Atal Bihari Vajpayee who was also a BJP leader but developed good relations with his Pakistani counterpart Nawaz Sharif in the 1990s. In addition, Modi’s domestic growth and jobs agenda requires stability in India’s neighbourhood.

Given the expected focus on Washington, Beijing and Pakistan, relations with the EU are not likely to be an immediate top priority for the new government. The EU is hoping, however, that Modi will put energy and effort into the successful conclusion of the much delayed EU-India Bilateral Trade and Investment Agreement (BTIA).

“Investors from Europe are bullish about India’s growth potential and want to see New Delhi and Brussels iron out their differences over the BTIA. We hope that the new Indian Government will be able to take some hard decisions necessary to spur growth and investments,” says Sunil Prasad, secretary-general of the Brussels-based Europe-India Chamber of Commerce.

Brussels and Delhi have been trying to clinch the elusive investment deal for the last seven years. But differences over tariffs and market access as well as questions related to the protection of intellectual property rights have impeded progress.

The opening up of Indian’s insurance market, changes in government procurement rules and market access for automobiles as well as wines and spirits are important issues for the EU. India is insisting on more labour mobility, professional work visas and recognition as a data secure country to attract more European investments in its high-tech sector.

EU officials say the pact could be signed in 2015 — provided both sides summon up the political will to look beyond the array of technical issues to the deeper strategic importance of their relations. A recent EU ban on imports of Indian mangoes because of phyto-sanitary concerns has injected new strains in the relationship, however.

Beyond the BTIA, Brussels is hoping the new government will demonstrate stronger interest in developing the EU-India relations.

Europe and India have much to discuss. The new government’s jobs and growth programme resonates deeply in Brussels given the EU’s own struggle to generate employment and boost economic recovery. Both sides confront the challenge of expanding economic reforms, bolstering trade and tackling regional disparities.

The EU-India conversation on security and counterterrorism has taken off as has cooperation on regulatory cooperation and data protection. Discussions on environmental protection, urbanisation and water and food security are ongoing.

The challenge now is to take the relationship to a higher and more genuinely strategic level. European investors are willing and eager to enter the Indian market. European know-how could be valuable to India’s reform and modernisation agenda. Europe, meanwhile, needs new markets to keep its modest economy on track.

EU and Indian leaders have not met for summit talks since February 2012. An early meeting between Modi and the EU’s new presidents of the European Commission and the EU Council this autumn will be an important step in marking a fresh start in relations.

—The writer is Dawn’s correspondent in Brussels.

Published in Dawn, June 7th, 2014