The Need for and Ways to Reignite India-CEE Relations

Sooraj Kashyap 1st June 2019

Since Independence, India has shared a cordial relationship with the Central and Eastern European (CEE) countries. As time progressed, India and the CEE countries which were part of the erstwhile Soviet Union shared an amicable relationship till its disintegration.1 Since then, economic relations between the countries have dwindled. India contributes somewhere between 1-2% of the total imports of the Eastern European countries.
Keeping aside the economic point of view, diplomatically, India had little to no bilateral engagement with the CEE nations since the fall of the Soviet Union. Prime Minister Narendra Modi has not visited a single Eastern European country which indicates that he has no intention to re-establish diplomatic interaction with the CEE.
However, it is necessary to re-engage diplomatically and economically with the Eastern European nations. There are two major reasons for this. One, China has a sizable investment in infrastructure in these nations, which has created a huge trade deficit and pushed them into the Chinese debt trap. Two, a lack of motivation from our side will put a dent in our ambition to become a leading partner to European nations.
The countries in the region need infrastructure development to boost their economic growth. Most CEE countries have seen steady economic growth in recent years, with countries like Romania growing by 5.6% in 2017 and the region witnessing 2.5% growth overall in 2017 which is an increase, from 2.2% in the latter half of 2016.2
The Indian government lacks the luxury of handing out large sums of money, either as loans or as aid for infrastructure building. However, India’s Overseas Direct Investment (ODI) has increased considerably, in the past few years. The bulk of this is owed to the private sector, which has pursued mergers and acquisitions transactions. Eastern Europe has a lot of natural resources and most of the countries rely on exporting their natural resources. I...

Note: Views expressed in this blog are those of the author.