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How soft power can help build India-EU/India-UK relations?


Introduction

The concept of soft power is a highly misunderstood one. Along with its meaning, its extent is often misplaced. Holistically, it refers to a country’s ability to attract or persuade others to do its bidding. Instead of utilising the conventional methods of force or coercion, a country emphasises its culture, ideologies, and values to attract or persuade others. An area where utilisation of soft power is trade and investment, even though it is not vastly studied. Soft power has a positive impact on a country’s economic prospects as it influences the perceptions of the investors, builds trust and also aids in creating a positive environment. According to the research conducted by Brand Finance, soft power correlates with a 34% variation in global FDI inflows and 60% in trade flows. The top performers in the Global Soft Power Index are those countries that are among the world’s most powerful economies, including the U.S., China, Germany, the U.K., Japan, etc. 


Indian Soft Power in Europe

India relies majorly on its heritage and culture as soft power. O For instance, at the time of Indian festivals, we witness various food and music festivals being organised in Europe. The Darbar Festival based in London is an annual Indian classical music festival which features Hindustani and Carnatic music. In terms of food, Indian cuisine has a large fan-base outside of India as well and hence, Indian Food Festivals are regularly organised by Indian communities living in Europe. The Indian Embassy in France hosted ‘Namaste France’ in July 2023 at the prestigious La Seine Musicale venue. It consisted of concerts and performances, a craft bazaar, classical dance and music, and also contemporary ‘Bollywood’ style dance. Along with this, the festival included workshops on yoga, wellness, Ayurveda and discussion on literary and cultural themes. Award-winning photographer Rohit Chawla held a photo exhibition on the Rabari nomadic tribe of Gujarat. The overall footfall of the festival was around 20,000 people over the duration of 4 days. 


Along with cultural activities, the Indian government also organises numerous trade and investment summits which facilitate and attract foreign investment to India. For example, this year the Indian Embassy organised two business forums in a span of two months, namely, India-Netherlands Business Seminar (January) and India-Netherlands Entrepreneurs Forum (February) in the Netherlands. 


The Indian diaspora is one of the major contributors to India’s soft power. Across Europe, the Indian diaspora is one of the most influential. According to the deputy governor of Reserve Bank of India, Michael Patra, the Indian diaspora has contributed substantially to the country’s forex reserves to pile-up. The Indian perception of ‘brain drain’ has been transformed to ‘brain gain’ as


Limitations of India’s Soft Power on Trade


In 2021, The EU was India’s third largest trading partner, accounting for €88 billion worth of trade in goods. It formulated 10.8% of total Indian trade. EU is also the second largest destination for Indian exports accounting for 14.9% of India’s total exports.  According to official government data, bilateral trade dipped by 1.9% from €115.4bn in 2022 to €113.175bn in 2023 consisting of Indian exports worth of €64.860bn also saw a decline by 3.83% in 2023. However, the imports of €48.315bn expanded by 1.28% compared to 2022. 


India has ranked 29th in the Global Soft Power Index 2024, published by Brand Finance. This index indicates a country’s attractiveness for investment, commerce, education, employment and tourism. It provides a global perception of a country as a brand. According to the report, India, while exhibiting a high level of familiarity and influence in its home region has not been able to fully realise its potential in building a truly global Reputation. It majorly scores high for its Culture and Heritage yet encounter limitations in crucial metrics such as Business and Trade. In simple terms, it says that India has the ability to attract attention but not to withhold interest. 


The inability of India and the EU to negotiate and finalise a Foreign Trade Agreement (FTA) presents a major flaw in the efficacy of Indian soft power. Industries which can benefit from the EU-India FTA such as textiles, leather products, agricultural sector, etc. are still uncompetitive. According to the World Bank, India ranked 63rd in 2023 in ease for doing business across the world among 190 countries. Undoubtedly, it has improved its ranking from 142nd in 2024, however, it still lacks various essential metrics that may facilitate a greater investment in the region. For instance, in 2023, India ranked 136 under the metrics of Stating a Business which includes criteria like number of procedures, total duration, expenses and paid-in minimum capital to start a limited liability company. India ranked 163 in the metric of Enforcing Contracts which take into account time, cost and quality of judicial processes. Registering a Property and Paying Taxes are the other two indicators wherein India performs dismally, ranking 154 and 115, respectively. 


Conclusion 

Effective soft power can aid a country in doing its bidding in terms facilitating trade, foreign investment, technology transfer, etc. Indian soft power, majorly its culture, heritage and diaspora does bring great amount of attention and interest. However, in terms of burgeoning the trade, the Indian government needs to take greater measures to uplift the morale of foreign investors so that they bring long-term foreign direct investment instead of short-term foreign portfolio investment. 

Works Cited

Works Cited

Malhotra, Shairee. 2015. EU-India Relations: A Soft Power Approach. Brussels: European Institute for Asian Studies.

Government of India. 2023. India-EU/ Belgium / Luxembourg Bilateral Trade Statistics. Embassy of India.

—. 2023. Embassy of India. https://www.eoiparis.gov.in.

Sharma, Gouri. 2024. The staggering economic impact of the Indian diaspora. 22 March. https://www.bbc.com/worklife/article/20240321-global-economic-impact-indian-diaspora.


This article is written by Harshita a fellow with EICBI










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