India-Spain bilateral relations: A valuable ally in Iberian Peninsula

Credit: Atlantic Council

Introduction: 

Spain is a densely populated country in Europe. It is one of the most geographically affected countries    which has decided as well as shaped its past, present & probably future as well. Right from its history in Gibraltar to its vision of ruling entire Europe, or creating one of the largest colonial empire which had majority countries of South America except Brazil, Carribean Islands & some countries of North America under its rule. It is also one of those countries which supported the Nazi Germany in 1939 but soon in cold war it was able to side with NATO when it entered the alliance in the year of 1982. Even across its thousand year old history, Spain has been able to judge the situation with alarcity & accuracy  which has led to it never being in the wrong side of historical decisions. Spain's median age is 44 years which is in stark contrast to India's 25 years. 

Geographically speaking, Spain is Europe's fourth largest country which is located near the Iberian peninsula which makes it one of the most interesting country to analyze with respect Spain is one of the most complex countries in the world with this regard as the phrase time is powerful, fits apt for the Spainiards. The country's geography is surrounded by a route to North America, South America, Northern Africa &  Europe as well. Since,it is also a part of the Iberian peninsula its been an important part of the overall geopolitical spectrum of West Europe. Spain has about 528 small & big rivers which makes it a resource rich nation, its also home to minerals like copper- tungsten-flurospar to name a few. Spain has a huge coastline of 5,755 km which makes it one of world's well connected maritime country. 

The country also suffers from the issue of Catalan independence & Basque region revolts which has threatened peace, prosperity & development over the past few years, however despite all these ups & downs, Spanish relations with the Asian giant India has remained cordial as well as friendly over the last 75 years, in fact the shared civilizational history transcends time as far as both these countries are concerned. If Spain had charismatic empires like Ferninand-II, Charles V, India also had brave rulers like Rani Naiki Devi, Rani Durgawati & Rajadhiraj Samduragupta.

India & Spain established formal relations in 1956, the time when the then incumbent PM of India, Shri. Jawaharlal Nehru won the second general election conducted in the country, this was a historic move given that Spain is a country whose influence extends beyond Barcelona to Villarel & extends till countries of Latin America like Colombia-Mexico to name a few with virtue of the Spanish language, Spanish is the offical language of 20 countries & is also one of the 6 official languages of the United Nations. The population density of both the countries are roughly the same 35/100 sq.km & for India its 481 square kilometer which makes both the countries similar according to demographics..

When the medium of language is familiar to one country it improves the soft cultural power of that country in the other nations and the sense of belongingness is also strengthened in such cases. Spanish speaking countries are usually in the South American continent and the continent of North American continet. The Spanish were able to gain such a huge empire by virtue of  commanders like Hernan Cortes to name a few. Similarly, India is a home to more than 1500 languages which penetrated the world before the partition of India forced by the colonial rulers in 1947.It shows that Indian engagement started even before the independence of India from clutches of Britain. 

If India is the mother of democracy with roots tracing back to Lichavi kingdom, Spain is one of those countries which has transistioned to a democracy after an extended period of dictatorship. These examples prove that the basics of thought between India & Spain match to a great extent.

Spain has a democracy in which the head of state is the monarch family of Felipe VI  currently in charge of the country with a separate proportional representation system whose elected prime minister is Pedro Sanchez.Whereas, India has an indirect system of election for president where all MPs & MLAs, MLCs vote for the president which happens to be the first tribal woman leader, Smt.Draupadi Murmu & the first past the post system based on which the PM is elected by the common people in the Lok Sabha elections. Just like how Bharat has 2 houses of Rajya Sabha & Lok Sabha, Spain also has 2 houses one for the deputies and senates though the contexts are same. If India has system of state government then Spain has the system of autonomous communities which is strongly embedded in the same. 

India's economic-political engagement with Spain will not only benefit it in Europe but also with other countries to the far west continent. The India-Spain relations engagement at a political level have been less as compared to India's tumltous history with many other European countries since the time of its independence. 

Political engagement:

Political engagement can be judged by the number of state visits undertaken by the nations in the last 75 years, as the bureaucratic machinery is more than busy in usual. The last political engagement came when the incumbent PM Narendra Modi paid an official bilateral visit to Spain in May 2017. PM Modi met Pedro Sanchez on sidelines of the G-20 summit in Buenos Aries in December 2018. The 2017 visit was an official visit by an Indian PM after close to after 28 years in the startegically located nation of Spain.  The last visit was by ex Indian PM, Rajiv Gandhi in year 1988. Multiple ministerial level visits by Smt. Sushma Swaraj in the year 2018 in Spain, the spain PM. Pedro Sanchez also addressed the Raisina Dialogue session in New Delhi in 2019.  The CoP-25 meet held in Spain was also an opportunity which enhanced the climate diplomacy between India & Spain, where Minister of Environment Prakash Javadekar was also a chief guest for the same. 

MoS for External Affairs V. Murleedharan visited Spain for the ASEM Foreign Ministers meet.ASEM stands for Asian-Europe Meeting which has a political dialogue to enhance relations & various forms of cooperation between partners. It was founded in 1996 of which both India & Spain along with heavyweight geopolitical countries like Japan, Kazakhstan, Dennmark etc. are also a part of the same.

The last visit was by PV Narasimha Rao in the year 1992 soon after Liberalization, Globalization & Privatization policy was announced. India's first embassy to Spain was opened in 1965, the relations started to formalize since that phase of time. The nature of relations between the country is based more upon economy however, shared values such as human rights, culture & democracy are important building blocks of bilateral relations between both the countries.  

India shares a human rights centric view on the conflicts in Basque & Catalonia, Spain was one of the many countries which actively backed the abrogation of Article 370 & also visited Jammu-Kashmir in the year 2023 to study opportunities for film tourism as well. The political relations also extend to forums where India & Spain are members, India-Spain are members of multiple forums like G-20, International Monetary Fund, World Bank, United Nations,  Global Biofuel Alliance, World Trade Organization, ASEM to name a few. 

Though there are differences in opinion in the Russia-Ukraine war with Spain backing Ukraine in terms of millitary engagements with billions flowing into aid, India has called for descalation of war & hasnt contributed to the war in any direct way possible. In fact, it was due to Narendra Modiji's  active intervention that didnt result in a nuclear war as was acknowledged by CIA chief's with whom the Spanish enjoy a very close relation.

India & Spain Roundtable conference was also conducted in the year 2021. The coronavirus crisis also aided in diplomacy between countries when India supplied HCQ tablets to Spain amidst the crisis. India also offered to send the world class Covishield & Covaxin vaccines.

The political engagement has been historically low as both the countries view each other only from a startegic perspective instead of having a holistic view over the relations, it can be seen that both countries if given enough time can develop political relations over the next few years as the Iberian peninsula is an important region which can secure India's economy, energy & security needs.

Trade relations:

International Trade is a major discussion point when it comes to diplomacy & geopolitics. Many of the events of the world like the Opium Wars, colonialization of a few countries in North America have resulted from resources & trade wars. Many countries pride itself for being part of specific trade routes which has aided them in their economic development since years. In the same vein. India & Spain are one of the largest trade partners for each other in Europe & Asia respectively.

Spain & India have been similar in terms of growth rates even when crisis like Russia-Ukraine war & Coronavirus hit the world, Spain had a growth rate of 5.5% in year 2021 though it reduced steeply to around 1% in the forecast year for 2022, on the other side Indian economy in the last 3 years has been growing at around 7-8% & has 0% probability to go into recession which is very opposite to the Spainiards, hence given the kind of economic issues that Spain is facing right now, it becomes imperative for them to improve bilateral ties in order to get more exports which will spur aggregate demand which will increase investments as well. The economic structures of both the countries are in stark contrast with India being more or less equitable distribution across multiple sectors, whereas the other 

Spanish empire during its peak also used to be a major producer of gold & silver bullion which led it to not having economic shocks even when the size of other empires vis a vis Britain & France were increasing. This unique quality of Spainiards will help India make a valuable change in today's financial system which is undergoing issues such as lack of credibility of institutions like IMF-World Bank & increasing resentment among the developing countries world towards US dollar. Spain's GDP is 1.7 trillion$ whereas India's GDP is around 3.6 trillion$ both the economies notably are in top 15 of the world's economies. In the last 10 years, Spain's economy is on the downtrend with a reduction of almost 3.74% whereas Indian economy  due to digitalization, strengthened rural economy, infrastructure development to name a few factors has resulted in the Indian economy growing by 74.1% in the same time frame of a decade.

Spain is India's sixth largest trading partner in Europe. The overall bilateral trade is 17.9 billion$ which grew by 21.3% YoY from last year 2021. Indian exports were around 4.7 billion $ for year 2021 whereas Indian imports were around 1.81 billion$ which makes it of its kind trade relations where India is a surplus exporter, with the increasing size of Indian exports basket with schemes like PLI its quite possible that India may export upto 6.5 billion$ worth products to Spain by 2025. The Economic Complexity Score is also an important indicator in this instance as it showcases the ability of economies to produce goods & services which can be exported, it shows the trading abilities of the nations involved. The economic complexity index score of India is 0.61 whereas Spain's economic complexity index score is 0.78. 

The all time high for Indian exports to Spain was 39.17 billion$ & low of 1.71 billion$ way back in 1991. In fact, even in last 5 years since 2018, Indian exports  have risen from 4.56 billion$ to 4.7 billion$ whereas spanish exports is being constant between 1.61 billion $-1.7 billion$ which shows the impact of coronavirus & russia-ukraine war on Spanish economy. The annualized growth in Indian exports roughly in the last 20 years has been of 8.54% which is a decent growth rate for an economy whose average growth rate is around 6%. 

Products of trade between India & Spain: 

Coming to the products traded between the country, India exported refined petroleum worth 190 million$, nitrogen heterocyclic products worth $259 million to name a few. The refined petroleum exports is projected to rise due to the change in maritime routes which has occured recently.On the other hand, Spanish exports included items like prepared pigments whose export worth was around 95 million $, prepared pigments  are a part of dyes, paints etc. with an increase in India's real estate sector & domestic competitors like Berger Paints, Asian Paints producing good profits its most likely possible that the exports of paints from Spain will be projected to rise in the future.  Petroleum gas was exported to India whose value was around $86.9 million which shows the tremendous usage of petroleum gas in India as well.

However shocking enough, the services trade between the countries was not worth a single dollar implying it was 0$ which is a cause of concern which can be milked into opportunity if rightly used. Trade of agricultural products is negligible between countries which can be attributed to the logistical cost of export of perishable items between the countries. A possible reason for this can be the solid USA agricultural exports to Spain & India's own strong agricultural ecosystem.

The export basket of India to Spain is mostly related to products related to metals refinery & textiles. The cummulative percentage value of metals/metals refining export value to Spain is around 25% of the overall exports whereas textiles export worth in percentage terms is around 12.5% which makes 2 sectors extremely dominating for Indian producers which are being traded in Spain. The second section even includes objects like bedspreads, leather shoes, apparel jackets, fashion clothes, cotton sewing thread to name a few. Spain's export basket is very rigid which can be observed that products related directly to metals like refined metals etc. have the lion share of exports of 42%, the other proucts are  recovered paper(4.7%) & diamonds. The trade of automobiles between the countries is also strong with 2.41% of Indian exports to Espana is of automobiles, whereas, 3% of Espana exports to India is of automobiles which makes it a possible sector to focus upon. This is data as of 2021. 

The interesting factor to note however is that India's exports in sector of women apparells has falled from 3.54% in 2018 to around 2.9% in 2021 with a similar fall being registered in refined petroleum however, exports of cyclic hydrocarbons have doubled in the same time frame. Spanish exports products have remained the same which shows the strong output growth registered in these specific sectors in the largest country of Iberian peninsula. Broadcasting equipments is one very unique product whose exports growth in last 5 years has been 17.1% from the Indian side.

Since, investments are also an important part of diplomacy as it provides a platform to interact on issues of mutual interest. Sources like FDI, FII are critical part of any country's balance of payments as they contribute critically to the Capital account part of BoP, the export of services specifically also contribute to the same. Keeping this in mind, there are about 70 countries of India in Spain mainly in the areas of Information Technology, Pharmacueticals, Chemicals & Logistics.India is among the top 30 investors in Spain, this has to increase in order to ensure that inflow value from Spain increases to India.  On the other hand, Espana is the 16th largest investment partner for India with cummulative stock of FDI being 3.72 billion $, there are more than 280 Spanish companies in India the sectors being in sectors of metallurgy, renewable energy, automatics & infrastructure. The states concentrated by Spain in India for investments is in Maharashtra, Tamil Nadu, Andhra Pradesh & Karnataka whereas for India major investment points in Spain are in Barcelona, Madrid, Valencia & Sevilla.

India & Spain also have a chamber of commerce & Indian businessmen participate routinely in conclaves related to Tourism, Leather show in Madrid, Pharmacueticals, Mobile phones to name a few. India & Spain are only involved in talks related to India-EU FTA which also shows the lack of outreach between both the countries. 

Indian diaspora in Spain is the third largest one, with most of them being concentrated around in regions of Madrid, Barcelona, Valencia & Malaga.

Suggestions for improving ties: 

From the above sections its clear that India & Spain both required very focused outreach in order to improve the relations which have been undervalued by the countries. With improving relations with Spain, India can have a foothold in the Iberian Peninsula which has been neglected since many years, the Iberian peninsula is one of the most geopolitically important regions of Europe with 2 major economies being available which directly connects the world to North African countries like Morocco, Algeria, Libya, Western Sahara which will help India in terms of natural resources, culturally, economically & millitarily at large. 

Improving ties with Spain will also help India understand the fundamental society characterstics of countries like Colombia, Cuba, Haiti, Hondouras, Guatemala, Peru, Argentina, Uruguay which all form an important part of the Atlantic,Pacific & Global South at large, it will help because of the reason that the language spoken in these countrues is strictly Spanish only. It will help India advance the great Indian culture in these unchartered territories. It also gives a startegic depth by keeping a check on hostile & colonial countries like UK to name a few.

Spain has a very high per capita income of about 30,000 US$ which also acts as a major market for Indian producers to target in the longer run. Some of the suggestions for improving the ties between the nations can be as follows:  

1. Spain has a space agency named Spanish Space Agency which has been formed very recently in 2023, applying simple economics it means that the Spanish Space Agency would require someone's help in order to improve the overall situation of theirs in the country, India's pride ISRO which landed on the southern part of moon in Chandryaan-3 mission can aid countries such as space to advance their programs, some specific location in India can be used as a base for launching Spanish satellites, in addition, ISRO scientists can train Spanish scientists on the fundamentals of rocket science because Indians are masters in the subject of science. If needed, some satellites of Spain can also be installed in joint missions between the countries. 

2. The defence ties can also be improved. Recently, Spain & India are in talks to improve the defence ties with Spain supplying submarines. Spain has some companies CASA, Astra Unecta & with Government of India's push to become a major defence manufacturing hub some concessions like free tariff zones can be given to them which will generate employment in India at the same time will help Spanish companies to shift from an unstable & rogue terror supporting country like Pakistan. The defence ties must also focus on joint naval & millitary exercises, though there are some exercises conducted between India & EU of which Spain is also a part of. The exercises can concentrate in regions of Iberian peninsula & Bay of Biscay which Spain sees as its influence zone.

3. Indian port companies like Pipavav Ports, Adani Ports & SEZ can invest heavily in spain, though iberian peninsula is known for mountains, the factor that makes ports exciting is the presence of 528 rivers in Spain which can be developed into inland ports by India which would help Spanish people & companies at large. It will also be in accordance with PM Modi's vision of diplomacy with development along with securing startegic interests in the country. Some ports worth investing can be in Barcelona which is the financial capital, Alicante, Malaga to name a few.

4. Services trade between both the countries has to start for which the start can be done with Indian mobile manufacturing companies exporting mobile phones of which India is the largest exporter, which can be followed up with heavy exports of semiconductors produced in India which will add impetus to the greater development of Spanish. E-commerce services of India like Meesho, Myntra, Snapdeal, Zomato, Nykaa, Boat etc. can look to expand in the Spanish market & may be set up offices in Spain for the same. Other service sector industries also need to expand their exports basket to Spain which is at present being dominated by the United States of America & UK. With the higher quality of Indian products it wont be a difficulty for India to expand favourably in Spain. There is also a gap in the spanish market for the same.

5. Agricultural & Allied sector trade between the countries is also close to negligible. The FPOs, dairy cooperatives, Indian Food processing companies can step up exports of rice & vegetable products which act as staple food for the local populace as well. The food inflation of was 2.91% in 2023 which can be reduced if the supplies of rice & wheat is increased at constant proportions. Finished agricultural products can also be sold in Spain with adherence to UNCTAD & WTO norms, subsidy to Indian farmers exporting such items to Spain can also be given so that farmers are also not a loss & Spainiards get the food at low prices. Milk & meat products are also heavily popular in Spain which can be covered with AMUL type cooperatives setting up International food outlets in major cities of Spain along with clubbing it with the local e-commerce websites.

6. The UPIf A, idea of Aadhar(digital identity) can be expanded significantly with the government of Spain which lacks such a kind of system. India can set up a high powered committee whose heads are the PM of India & President of Spain respectively which can help Spain in sectors of e-governance which is low as of date in Spain. 

7. The exports of pharmaceutical products & tele medicine companies also need to expanded significantly to Spain which is low in today's day & time in Spain, whose adoption is low, this will help in development of the medical system in Spain. Public hospitals expansion in Spain by names like Apollo, Zydus, Wockhardt, Aurobindo can be expanded in the near future as well. If required special concessions from India can be provided. Since Spain is one of the major supporters of Yoga, Ayurvedic products can also expand in the less competitive natural medicine market of Spain which is also in high demand.

8. Football is a major talking point in Spain, its national football team is one of them which has a wide fan base in India as well. With the studying of Spanish football clubs, allowing Spanish football clubs to invest in I-League, ISL will also help improve the standards of Indian football massively. The stadiums in Spain are one of the most scenic & have been built with high end technology with best examples being Santiago Bernabeu & Camp Nou, the companies who executed such architectural marvels should team up with AIFF in order to improve all the existing facilities in Indian stadiums. The start can be doen from Mumbai, Bhubaneshwar to name a few. Since, football is also a sport which has political inclinations in Spain with the famous example of General Franco being an active supporter of Real Madrid, the Indian companies like L&T, TCS, HCL, Tech Mahindra, Paras Defence, Jio etc. can start by sponsoring their teams which will lead to visibility of Indian companies. Then may be those football clubs who dont have very strong financial balance sheets can be taken over by Indian giants as well where the operations will be run from Spain itself.

9. Given Indian textiles have a solid market in Spain, it is but natural that special concessions to them can be provided from the Indian side. The chances of success of a dedicated FTA between India & Spain should also be discussed which will boost the bilateral ties further.

10. Unncessary NTMs & NTBs on Spanish exporters should be rationalized in India which will allow India to have a favorable image in the business as well as political class of Spain.

11. Popular Indian films of all industries should be dubbed and produced in Spanish as well which will allow the countries to erase the cultural barriers as well.

12. Spain's education institutions are respected in India there are thousands of Indian students pursuing higher studies in Spain. Under the NEP, respected institutions of Spain can be given land space in cities like Pune-Ahmedabad-Guwahati-Hyderabad- Chennai-Delhi-Lucknow-Chandigarh where Spanish institutions can come up. Similarly, Indian engineering institutions like IITs, IIMs should set up foreign campuses in the picturesque cities of Madrid, Barcelona, Valencia which will enhance the experience for students.

13. Number of state visits should be increased, a task force for monitoring the relations of India & countries should be set up, and not only the prime minister but other important dignitaries like President of India, VP of India, Lok Sabha speaker should also do official visits to Spain which will help in more conversations between the countries.

14. An invite to BRICS,International Solar Alliance & Global Biofuel Alliance will help India & Spain discuss renewable energy economies which will aid the diplomacy between both the countries from time to time.

Benefits:

1. The major benefit would be in terms of growth in trade as major new avenues will grow. 

2. Boost to space & millitary diplomacy, will make India as one of the go to countries in the developing countries. 

3. Boost to Indian football infrastructure

4. Boost to overall Spanish economy. 

5. Boost to revenue generating sectors of India

6. Diversification of economic exports from India

7.  Boost to career choices of Indian students

8. Cultural economy upliftment

Conclusion: 

To conclude it can be said that India & Spain have got a great chance of upliftment of bilateral ties which will help both the countries significantly from an economic,cultural & millitary standpoint. It will also help both the nations securing startegic interests in each other countries & the so far low engagement can be increased exponentially in the near future, where India aspires to be a Vishwaguru.