India-Croatia relations
On 18 June 2025, PM Narendra Modi visited Croatia as a part of his ongoing 3 country tour which previously included a meeting with the Cyprus president Nikos Crystodoulides and attending the G-7 meet in Canada as an observer country.
India's foreign policy historically
has always prioritised Canada and Cyprus over Croatia especially in the areas
of counterterrorism, economic cooperation, and national security. High-level
trips to Croatia have been infrequent, despite India's consistent engagement
with Cyprus,
which includes PM Modi's 2019 meeting with President Christodoulides, President
Kovind's 2018 visit, and EAM Jaishankar's 2022 trip. The same can be said even
for India’s Canadian engagement, historically, which is trying to be back on
track after the massive diplomatic fallout during the tenure of Justin Trudeau.
In fact, Narendra Modi's recent visit is the first by an Indian prime minister
since Croatia gained its independence in 1992, while President Kovind's visit
in 2019 was the last major one, between the countries.
About Croatia -
For starters, Croatia was
formed during the brutal Yugoslav wars from 1990-2001, which has been described
as one of the deadliest conflicts in Europe post the conclusion of second world
war. Croatia was formed in 1991 and became the first country to become
independent from the former communist republic of Yugoslavia. India immediately
recognised
Croatian existence in 1992 and in July 1992, a mission was also set up between
the two. Croatia immediately joined the NATO in 2009. Croatia is also a EU
member state which it joined in 2013, apart from being a member of various
international organisations like OSCE, WTO and the United Nations. Croatia and
India both have the parliamentary system of democracy, but they differ in the
way in which it is followed. Croatia has a proportional voting system and India
has a FPTP system.
Croatia is an Eastern
European country, which makes it even more crucial in global supply chains in
today’s day and time, where geopolitical conflicts have taken a hit on the
European economies. Croatia is at the crossroads of Central and Southeast
Europe. Croatia’s northwestern neighbour is Slovenia, northern neighbour is
Hungary, north eastern neighbour is Serbia with which Croatia has had troubled
relations and its eastern neighbour is Bosnia and Herzegovina. Croatia also has
a sealine named as the Adriatic Sea, which is the northernmost arm of the
Mediterranean Sea & quite literally separates the Italian (Western Europe)
and Balkan peninsula (Eastern Europe).
Croatian Economy
Basics -
Croatian economy is a
peculiar case study. Croatian GDP is around 8500 crores US$ as per world bank
estimates. The per capita income of Croatia is around, 46,600 US$ which makes
it a firmly developed country. Its GDP growth rate is 3.3% over the past fiscal
year, which is significantly higher than its other European Union counterparts
like – France (0.9%), Italy (0.7%), Belgium (1.3%), Netherlands (0.3%) and
Sweden (-0.3%) in the same time frame.
In fact, a broader trend
that has been observed in the Balkan countries which were chided for being
under-developed for decades, have recorded a stronger growth rate in the past 2
years, with countries like Serbia (3.8%), Slovenia (1.7%), Slovakia (1.4%),
Bosnia and Herzegovina (2.2%), which is quite antithetical to what the rest of
Europe has been experiencing after the Russia – Ukraine war.
The reasons for the
sustained Balkan growth rates as given by experts are, the sustained strong
domestic demand along with other industries like a quick rising IT sector,
Renewables, Construction sector, Automotive parts, Minerals sector and Tourism
sector which have formed the bulk of the growth rates of these countries. India
must take steps to improve its trade with the Balkan states as well.
The Free Trade
Factor -
This visit by PM Modi is
also seen by experts as a follow-up to the long-delayed India-EU FTA, whose
talks began way back in 2007, which is nearing completion. Visiting Croatia—one of
the EU’s fastest-growing economies—at a time when energy supply chains are
strained by geopolitical tensions like the Russia–Ukraine war, gives India
added leverage in the ongoing FTA negotiations. The recent declarations of MoUs
regarding collaboration in industries including semiconductors, IT, renewable
energy, medicines, and agriculture bear similarities to the components of a
preferential trade agreement. This can be a crucial step in assisting India in
comprehending the diversity of the European market. This
was also reiterated by, Envoy Goel in an interview with the Tribune.
The value of India –
Croatia trade balance’s value as of year 2024, stands at 248,223 US$, as per ITC
website, which is a massive increase in the past few years. The Indian exports
to Croatia is modest at 298 million$, in
which petroleum is the top product with a value of 81.4 million$ as per the OEC.
On the other hand, Croatian exports are around, 50.6 million$ with the highest
value being for Scrap vessels at 5.64 million $.
The Economic Complexity
score for India is 0.76 and Croatia is at 0.69. As per trade statistics, the
net trade balance value in the product segments of – Ships & boats, Nuclear
reactors, Pharmaceuticals, and Wood Articles have the highest trade value. The
services trade between the two, is almost negligible. The MoUs therefore in the
above - mentioned sector can actually end up boosting bilateral trade between
India and Croatia. The digital economy sector can be a sunrise sector for
cooperation for India and Croatia, as the growth rates for both the countries
in the overall economy has been impressive over the years, this has the
potential to improve services trade between the two.
The Egyptian
Factor –
Though many experts link
the visit to the IMEC project, this may be only partly true. The Israel–Iran
conflict poses serious risks to Israeli port security, deterring traders.
Additionally, strained Saudi–Israel ties make IMEC projections seem overly optimistic.
However, the alternative
trade route involving, India – Egypt – Croatia trade route may become reality
in implementing the EFTA. India and Egypt, have stepped up their engagements in
past 3 years, with Egyptian president, Abdel Fatah Al Sisi being the chief
guest in India’s R-Day parade in 2023 along with, Egypt joining the BRICS in
recent past, showing that Egypt is a valued partner for India in the field of
economic cooperation.
For the time being, this
alternate trade route may be a game-changer because Egypt and Croatia both have
crucial positions in Mediterranean affairs and have stayed relatively stable
(politically and economically) in comparison to other nations in the region. The
overall bilateral trade between Egypt and Croatia as of today stands at around,
165 million$ as per the OEC.
Also, the cordial ties, between Egypt and Croatia may provide India with
partners in this newer trade route which may prove to be a gamechanger in the
upcoming years.
In addition, the three
nations have a common heritage in the Non-Aligned Movement, which was
spearheaded by Tito (Croatia), Nasser (Egypt), and Nehru (India). This could
facilitate economic negotiations and build trust before the India–EU Free
economic Agreement and IMEC are finalised.
However, these
predictions will hold true only if cooperation among the three countries
deepens, with India playing a central role. Key sectors like banking,
pharmaceuticals, digital economy, labour mobility, education, and medical
tourism should be targeted for bilateral or even trilateral partnerships. This
approach can significantly boost India’s soft power in the Balkans and the Red
Sea region—both of which have the potential to become major growth engines for
their respective continents in the coming years. At the same time, India must
keep doing frequent high-level visits by crucial ministers in those countries
of Europe which have been overlooked for years, but may play a crucial role in
the evolving dynamics of IMEC and India – EFTA.
Therefore, to conclude,
the recent visit by PM Narendra Modi can actually play a crucial role in
possibly forging a new trade route and possibly shifting the dynamics in one of
the global geoeconomic hotspots.
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