India and Portugal Relations: Where the interest lies?

After winning the second term in office, Portugal’s Prime Minister António Costa marked his first bilateral visit to India on a personal invitation by India’s Prime Minister Narendra Modi to attend the second meeting of the Organising Committee on the celebrations for the 150th Birth anniversary of Mahatma Gandhi on December 19.

During the first day of the visit, the two leaders discussed the broader roadmaps on already existing fields of interest between the two countries for strengthening relations in areas such as defence, science & technology. Trade and Investment were discussed especially in the context of Make in India. Prime Minister Narendra Modi also urged Portugal companies to invest and seize the opportunities in India. Discussions also took place on strengthening the bond between India and the European Union.

Pushing for a strategic alliance between the two countries, the Portuguese Prime Minister said, “I would even go as far as to say that we need to forge a strategic alliance between the European Union and India… it is critical that the world’s leading democracies work together in order to manage the huge transformations our planet is undergoing with respect for our fundamental values: freedom, rule of law, tolerance and social justice. Otherwise, we will all be prey to non-democratic models, which seek to establish an alternative to our fundamental principles of freedom and democracy.”

PM Costa’s invitation to the OC’s Gandhi at 150 marked the third official meeting between the two prime ministers in the span of 3 years. India and Portugal have always maintained warm and friendly relations with each other. The two have also met on the sidelines on various multilateral events.

India understands the importance of establishing closer ties and historical link with Portugal especially with Britain in its phase of exiting from the European Union. India, an emerging economy, needs to directly deal with the member states of the European Union and need Portugal to access the EU. Strong economic ties with Portugal will also help India to establish better relations with Lusophone countries in Africa and South America.

Portugal had taken the hardest fall after the global financial crisis in 2007 and saw India as a major emerging economy for trade and investment. Both countries share similar priorities in terms of boosting domestic economic growth, investment, employment, industry and innovation.

Bilateral Trade

Portugal ranks 50th in Foreign Direct Investment (FDI) into India with total cumulative FDI inflows amounting to $42.10 million (as of 31 December 2017).

Bilateral trade between both countries has been growing steadily. However, in 2014-15 saw a decline in bilateral trade by 19.18 percent as compared to 2013-2014. This dip could be attributed to the slowing down of the European economy and India’s overall trade.

As of 2018, the trade balance has consistently stood in favour of India as bilateral trade stood at a total value of $876.09 million. Indian exports stood at $743.27 million and Portuguese exports at $132.83 million.

Major articles exports from India are textiles and apparels including readymade garments; agriculture products; metals; chemicals; plastic and rubber; footwear; machinery and appliances; leather and its articles; vehicles and other transport materials.

Major articles of exports from Portugal are Machinery and appliances; metals; minerals; plastic and rubber; chemicals; textiles and apparels; leather; paper and pulp; wood and cork; optical and precision instruments.

Past Visits by PM António Costa

António Costa’s assumption of office as Prime Minister in November 2015 gave a boost to India-Portugal relations as Costa is of Indian descent who publicly takes pride in his Indian roots and is keen to deepen India-Portugal engagement.

In January 2017 António was invited as chief guest at the Pravasi Bharatiya Divas convention in Bengaluru, Hyderabad where he called for closer economic ties between India and Portugal. This event led to 8 MoUs being signed between the two countries in the areas of Defence, Agriculture & Allied sectors, Marine Research & Resource, IT & Electronics, Start-Up Partnership, Renewable Energy, Visa waiver agreement for diplomatic passport holders, and the establishment of an ICCR Chair for Indian Studies in the University of Lisbon.

A Joint Stamp depicting dances of both countries was released to commemorate 500 years of diplomatic relations between India and Portugal.

Prime Minister Narendra Modi then reciprocated by visiting Portugal in June 2017 making the first-ever bilateral-visit by an Indian Prime Minister to Portugal. During the visit, 11 MoUs were signed in the areas of Space, avoidance of double taxation, Nanotechnology, Biotechnology, Public Administration and Governance Reforms, Culture, Youth & Sports, Higher Education (IITs) which expanded the scope of the partnership between the two countries. They also agreed on establishing a Joint S&T (Science and Technology) Fund of 4 Million Euros.

The visit of PM António Costa to New Delhi on December 19 was a working visit and not a full bilateral visit, with the purpose to attend the Organising Committee’s meeting on Gandhi at 150.  Both Prime Ministers are pursuing better relations between their countries.

References:

https://mea.gov.in/Portal/ForeignRelation/Brief_on_India-Portugal_Relations_Dec_31_2018.pdf

https://mea.gov.in/Portal/ForeignRelation/Brief_portugal_2019.pdf