Public Diplomacy Public Diplomacy

India and Central Europe: a road less travelled

July 16, 2013

By: Archis Mohan

In recent years, India's first Prime Minister Jawaharlal Nehru has come for some criticism, much of it mostly uninformed or without context, for pursuing a foreign policy founded on the bedrock of non-alignment. But there was a time when non-alignment and Nehru's stature as a world statesman armed New Delhi with a moral authority that enabled it to punch above its weight in international affairs. One needs to visit Hungary, as External Affairs Minister Salman Khurshid is currently doing, to realise the debt that common Hungarians think they owe to India for the role New Delhi played during the Hungarian uprising of 1956.

Hungarians still recall how India intervened with the communist regime in Moscow that saved the life of Dr. Arpad Goncz. The Red Army tanks rolled into Budapest to mercilessly crush the uprising and eliminate its leadership. India worked the diplomatic channels to request Moscow to save Dr. Goncz. He later went on to serve as the President of Hungary from 1990 to 2000, the country's first non-communist President after the end of the Cold War.


External Affairs Minister Shri Salman Khurshid with Mr. Janos Martonyi Foreign Minister of Hungary at a Media Interaction in Budapest (July 15, 2013)

Khurshid is on a visit to Budapest from July 14 to 16. He has been invited to address the Annual Conference of Hungarian Ambassadors, which is symbolic of the high level of mutual trust between India and Hungary. He has also met Hungarian Foreign Minister Dr. Janos Maronyi to hold discussions on all issues of bilateral, regional and international concern and closely coordinate positions on all regional and international issues.

During the visit, Khurshid is to fine tune the itinerary and agenda for Hungarian Prime Minister Viktor Orban's official visit to India in October, which is expected to set a new milestone in India-Hungary bilateral ties. The two sides expect to sign several bilateral agreements to further bolster their bilateral cooperation. The Minister has a meeting with the Hungarian PM and inaugurates an exhibition celebrating the birth centenary of Amrita Sher-Gil, one of the most important women painters of her generation whose mother was Hungarian.

India and Hungary enjoyed close economic and political ties during the Cold War era. India was Hungary's biggest trading partner in Asia with bilateral trade at nearly $200 million in the 1980s. The two, however, found it difficult to keep up the momentum of vibrant economic cooperation in the post-1990 years. This has begun to change in the last few years with bilateral trade noting an upswing and Indian investments in Hungary reaching a record level of $1.5 billion. Bilateral trade reached $840 million in 2011 but dipped to $641.9 billion in 2012, primarily because of a sharp decline in Hungarian exports to India. Trade is an area that the two sides would like to address during Khurshid's visit.

The two countries marked the 60th anniversary of establishment of their diplomatic relations in 2008 with the visit of the then Hungarian PM Ferenc Gyurcsany. In the past two decades, India and Hungary have signed several agreements, including Air Services Agreement, Double Taxation Avoidance Agreement, Bilateral Investment Protection and Promotion Agreement, Social Security Agreement, Agreements on Cooperation in Health, Agriculture, IT, Science and Technology and Defence.

India is also trying to promote Ayurveda in Hungary, which has a tradition of spa therapies. The Indian embassy helped organise an international Ayurveda conference in Budapest in September 2007 and an international workshop on 'Traditional Herbal Medicinal Products Directive and its impact on Ayurveda in Europe' in March 2010 in Budapest.

Hungary along with Turkey, which the External Affairs Minister visits later in the week, are important countries of Central Europe. The Central European region comprises 30 countries, many of these being former communist countries.

Indian foreign policy has in the last couple of years begun to give adequate attention to improving its relations with these countries, particularly former Warsaw Pact countries and former Yugoslav countries, because of their technological know-how in niche high technology sectors. In the last couple of years, New Delhi has hosted important ministers and delegations from these countries, including from Slovenia and Poland.


Minister of State for External Affairs Ms. Preneet Kaur with Mr. Radoslaw Sikorski, Foreign Minister of Poland shaking hands before their meeting in Warsaw on 29 January 2013

Of some interest to India is the expertise these countries have in the field of nuclear energy. Slovenia, for example, meets 70 per cent of its electricity requirement from nuclear power. India also hopes to learn from Czech Republic and Bulgaria's experiences in harnessing nuclear power for peaceful use.

Central Europe is also an important region for India economically. India's total bilateral trade with Central European countries is $ 26649.08 millions. Significantly, the balance of trade is in India's favour with its total exports being $ 15481.15 million and imports $11168.9 million. But these figures do not tell the entire story as these are shored up by India's healthy trade relations with only few of these countries like Turkey. With most others, India's trade is minuscule. It is a result of New Delhi unable to take forward in the post-Cold War era the close links that it had with many of these countries from 1950s to 1980s.

India exports electric machines, transport vehicles, agricultural products, tea, coffee, pharmaceuticals, garments, computer software, jewellery, leather products, etc. It imports iron & steel, metal scrap, nuclear reactors, mineral fuels & products, fertilizers, Swiss watches, glass and crystal products.

Major Indian Companies with investments in Central European countries are Tata Motors, Infosys, Dr. Reddy, Wipro, Biocon, Aditya Birla Group, TCS, Tech-Mahindra and Oswal Group. Major Central European companies with investments in India are Nokia, Siemens, Telenor, Volvo, SAAB, Tatra, Skoda Auto, Vitkovice, Nestle, Novartis, Sulzer, Swarovrski, Hilti, Thussenkrupp, etc. The Indian embassy in Budapest and CII organised a conference 'Rising India in Central Europe' in November 2011.

The potential of India- Central Europe remains largely untapped. India has engaged with Africa at Summit meetings, focused on the "Look East" policy and laid out a "Connect Central Asia" strategy. It may be time to give a push to economic interests in the Central European region. Coming soon after a visit to Norway, Khurshid's visit to Hungary and Turkey, it is hoped, may pave the way for stronger ties between India and Central Europe.

Central Europe fact sheet

Central Europe comprises 30 countries.

Of these, 25 follow parliamentary form of government, four are constitutional monarchies and one is monarchical-sacredotal (Holy See). Eighteen of these countries are European Union members and eight are Euro Zone members. Of the 30, there are 17 NATO and 18 Schengen members.

Former Communist countries are Estonia, Latvia, Lithuania, Moldova, Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia, Albania, Bosnia & Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia.

Scandinavian/Nordic countries: Iceland, Norway, Denmark, Sweden and Finland

Baltic states: Estonia, Latvia and Lithuania

Visegard states: Poland, Czech Republic, Slovakia and Hungary

Eastern Balkans: Bulgaria, Romania and Moldova

Western Balkans/former Yugoslav: Slovenia, Croatia, Serbia, Bosnia Herzegovina, Macedonia, Montenegro and Albania

Alpine states: Austria, Switzerland and Liechtenstein

Mediterranean: Greece, Cyprus, Malta and Turkey

Holy See: Vatican City

Total Area of Central European countries - 3667652.5 sq km

Largest country (size)- Turkey (784,000 sq.km)

Smallest country (size)-Vatican City (0.44 sq. Km)

Largest country (population)- Turkey (75.63 millions)

Smallest country (population)- Vatican city (836)

Indian population in Central Europe is approximately one lakh.

Total GDP- $ 5980.49 billions (approximately 6 trillion based on PPP)

Highest per capita income - Liechtenstein (US$ 187390)

Lowest per capita income - Moldova ( US$ 3500)

(The views expressed above are the personal views of the writer)



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