Unlocking Europe: Ireland's Vital Role as India's Gateway to the EU

 

India's Gateway to the European Union: Ireland's Role

Background

In 2015, the United Kingdom's vote to leave the European Union (EU) raised concerns about India's access to the European market. India had previously relied on the UK as its gateway to the EU.

Greece Gateway

In response, India explored alternative gateways, including the Greece-India Gateway for Europe, a physical (not meta-physical) infrastructure project that would route Indian goods through Greece and into the EU.

Ireland's Offer

However, the Greece gateway presented challenges in terms of India's ability to ship goods to the EU at competitive costs. Recently, Ireland emerged as a potential gateway for India.

Ireland's Advantages

Ireland's Minister for Trade has stated that Ireland can serve as India's gateway to the EU due to its similarities with India and its potential role in mediating a free trade agreement (FTA) between India and the EU.

Benefits for India

Increased Trade: India has a trade surplus with the EU, meaning it exports more goods than it imports. An FTA would reduce trade barriers and allow India to increase its exports.

Multi-Nationalization of Indian Companies: An FTA would provide Indian companies with access to the EU market, enabling them to become more competitive and multinational.

Indian Companies in Ireland

Ireland has offered to allow Indian companies to manufacture goods in Ireland and receive certificates of origin. This would grant Indian goods access to EU trade concessions, increasing India's foreign assets and national income (NII).

Challenges

Free Trade Agreement Negotiations: India and the EU are currently negotiating an FTA. However, there are obstacles related to food standards and the EU's recently proposed carbon border tax.

Gateways vs. Direct Access: While using Ireland as a gateway could provide access to the EU market, it may not maximize India's economic growth potential. Gateway arrangements often involve investment and job creation in the gateway country rather than in India.

Conclusion

Ireland's offer to become India's gateway to the EU provides potential benefits, but it also presents challenges. India must carefully weigh these factors and prioritize its own economic growth over the use of gateways.