Perspective: Strengthening India-Spain Relations | 04 Nov 2024

Why in News?

Recently, the President of the Government of Spain visited India, revitalizing bilateral relations by emphasizing their shared values of democracy, rule of law, and commitment to a rules-based international order.

• This was the first visit by a President of the Government of Spain to India in 18 years.

What are the Points of Convergence in India-Spain Relation?

• Economic Cooperation and Trade Expansion: Economic relations form a crucial component of the India-Spain partnership. In 2023, bilateral trade reached USD 8.25 billion, growing by 4.2% from the previous year.
  • India's exports to Spain amounted to USD 6.33 billion, marking a 5.2% increase, while imports were valued at USD 1.92 billion, growing by 1.05%. Major Indian exports include mineral fuels, chemical products, iron and steel, electrical machinery, and apparel.
  • Spain is India’s 6^th largest trade partner within the European Union with cumulative Foreign Direct Investment (FDI) stock of USD 3.94 billion (April 2000 - December 2023).
  • Both countries agreed to enhance bilateral investment relations, with India’s investment in Spain approximating USD 900 million, focused mainly in IT, pharmaceuticals, chemicals, and logistics.
  • To facilitate trade and investment relations, both nations agreed on the establishment of a Fast Track Mechanism.
  • Both countries acknowledged the progress made in the 12^th session of the India-Spain Joint Commission for Economic Cooperation (JCEC), held in 2023, and decided to convene the next session in Spain in early 2025.
• Defense Cooperation: The defense ties between India and Spain are deepening, marked by mutual interest in joint projects.
  • For instance, a key highlight of the visit was the inauguration of the C-295 aircraft Final Assembly Line Plant in Vadodara (the first private military transport aircraft production plant in India), co-produced by Airbus Spain and Tata Advanced Systems.
  • This facility is set to manufacture 40 C-295 aircraft, with the first 'Made in India' aircraft expected to roll out in 2026.
  • Airbus has also committed to delivering 16 aircraft in fly-away condition, six of which have already been delivered to the Indian Air Force.
  • Both countries emphasized the importance of regular dialogues to strengthen and diversify collaboration in key areas such as cybersecurity, counter-terrorism, intelligence sharing and military exercises.
• Cultural and People-to-People Exchanges: Cultural ties were identified as vital for strengthening bilateral relations.
  • Both countries have declared 2026 as the Year of India and Spain in Culture, Tourism, and AI. This initiative aims to enhance mutual cultural presence and promote tourism, including efforts in music, literature, and film.
  • Both countries welcomed the signing of a Cultural Exchange Program, which aims to promote exchanges in music, dance, theatre, literature, and festivals.
  • In academia, the establishment of ICCR Chairs on Hindi and Indian Studies at the University of Valladolid represents a significant step toward educational collaboration.
• Commitment to Global Issues: On global issues, both countries expressed deep concern over the ongoing conflicts in Ukraine and the Middle East and emphasized the need for dialogue and diplomacy to address these crises.
  • Both countries reiterated their commitment to a free, open, and inclusive Indo-Pacific, supporting international law and freedom of navigation.
  • They acknowledged India's invitation to Spain to participate in the Indo-Pacific Oceans Initiative (IPOI), promoting collaborative efforts in managing and conserving the maritime domain.
  • Spain welcomed India’s application to join the Ibero-American Conference as an Associate Observer, aiming to strengthen ties with Latin American countries.
• Enhancing International Cooperation: Both countries agreed to enhance cooperation within the United Nations and emphasized the need for a reformed UN Security Council to reflect contemporary global dynamics.
  • India expressed support for Spain’s candidacy for a UNSC term in 2031-32, while Spain backed India’s candidacy for 2028-29.
  • Spain invited India to join the International Drought Resilience Alliance, launched in 2022, which aims to promote actions to mitigate the impacts of drought through preparedness and adaptation measures.
• Conclusion on Counter-Terrorism and Future Engagements: Both countries unequivocally condemned terrorism and violent extremism, emphasizing the need for immediate action against terrorist groups.
  • Both countries called for the firm implementation of UN resolutions related to counter-terrorism and acknowledged Spain’s multilateral initiatives supporting victims of terrorism.

What are the Strategic Significance of Cooperation Between India and Spain?

• Defense Cooperation: Spain is integral to India’s defense modernization efforts, especially in aerospace and naval technology.
  • Involvement of Spanish companies in submarine technology transfer and military aircraft collaboration enhances India’s defense capabilities.
  • Collaborations support India's Make in India initiative, fostering local production and self-reliance.
• Counter-Terrorism: Active cooperation in counter-terrorism efforts, focusing on sharing intelligence to address mutual security concerns.
  • Both nations recognize and respond to the threat posed by global terrorism through coordinated actions and strategies.
• Sustainable Development and Climate Action: Both India and Spain are dedicated to the goals of the Paris Agreement and climate action.
  • Spain’s advancements in renewable energy (solar and wind) align with India’s objectives to increase clean energy sources.
  • Joint initiatives aim to achieve sustainable development goals (SDGs), addressing environmental challenges through innovative solutions.

What are the Key Challenges of India and Spain Relations?

• Economic Engagement Challenges: The bilateral trade between India and Spain is significantly below potential, with insufficient utilization of economic complementarities.
  • Opportunities in renewable energy, infrastructure, and technology sectors are underexplored due to limited investments.
  • The absence of comprehensive trade agreements creates barriers for businesses seeking expansion in each market.
• Geographic and Cultural Barriers: Considerable distance hampers direct connectivity and frequent interactions.
  • Limited cultural exchange leads to a lack of mutual understanding between the populations.
  • Both countries lack educational and cultural exchange programs to bridge knowledge gaps.
• Market Access Issues: Regulatory complexities discourage potential investors and traders. These restrictions hinder the free flow of goods and services.
  • Varying product standards and certification requirements add additional trade barriers.
• Diplomatic Priority Challenges: Spain emphasizes its relationships within the EU and with Latin America while India focuses on major powers and immediate neighbors, leading to limited engagement with Spain.
  • High-level diplomatic visits and strategic dialogues between the countries are not frequent.

Way Forward

• Strengthen Economic and Trade Ties: Initiate negotiations for a bilateral investment treaty to ensure stable market access and attract Spanish investments in India’s infrastructure, renewable energy, and technology sectors.
  • Expanding economic engagement will address current trade imbalances and leverage economic complementarities.
  • India and Spain can collaborate for Talgo Train Coaches as India moves forward to modernize its railways.
• Promote Cultural and Educational Exchange: Expand cultural exchange programs and create scholarships and exchange opportunities, including language and arts programs, to bridge cultural gaps.
  • Collaboration between Indian and Spanish universities in technology, innovation, and Indian Studies will foster a stronger people-to-people connection.
• Elevate Diplomatic Engagements and UN Reform: Establish a framework for annual high-level meetings to ensure frequent diplomatic dialogues and strategic planning.
  • Support each other’s candidacies at the UN Security Council and continue working toward UNSC reforms, reflecting a shared commitment to a more inclusive international order.
• Collaborate on Climate Action and SDGs: Align renewable energy efforts by leveraging Spain’s advancements in solar and wind energy to support India’s Paris Agreement goals.
  • Jointly pursue sustainable development projects under the International Drought Resilience Alliance and Indo-Pacific Oceans Initiative to address environmental challenges.