Examining the Role of Trust and Ideological Disparities in India-EU Negotiations: The Case of the Bilateral Trade and Investment Agreement (BTIA)

Abstract

Negotiations between India and the EU for a Broad-Based Bilateral Trade and Investment Agreement (BTIA) have proven to be a complex and protracted affair. Despite both parties realising the importance of a trade agreement, neither of them intend to provide any concessions to the other party. Moreover, both parties, even after adopting different bargaining techniques, have been unable to come to an agreement. It is for this reason that scholarly interest in the study of the BTIA negotiations has grown dramatically over the last decade. Despite the interest, extant reviews have focused predominantly on the ex post economic benefits of the agreement. Rarely has the role of trust between the EU and India been analysed by the scholars. The primary aim of this article is to conceptualise the role of trust between the EU and India and summarise the bargaining strategies used previously by the parties. On the point of trust, the authors would argue that the signals provided by the leaders of India and the EU have helped in creating trust, which would in turn assist in the negotiations of the BTIA. The authors demonstrate that the presence of mere calculus-based trust led to a breakdown of the BTIA negotiations. Thereafter, attempts have been made at elite, organisational and societal levels to move towards an identification-based trust. The authors conclude that although the process of transitioning from calculus-based trust to identification-based trust is slow and costly, the benefits of the latter would not only result in the possible culmination of the BTIA, but also result in the creation of a long-term strategic partnership.