India-Greece: A Natural Match… The untapped potential of the Hellenic-Indian relations: Their strategic partnership creates an official framework of cooperation

Vasilis Petropoulos

Since prime minister of India Narendra Modi’s visit to Athens, on August 25 2023, there has been a fiery discussion about the agreed upgrade of the Hellenic-Indian ties and the tangible benefits it entails for Greece.

The first official meeting on a heads-of-state level since January 2008 was a clever move with increased strategic value, which should have happened years earlier. But what is the true importance of the narrower Hellenic-Indian rapprochement and the beginning of  ‘strategic partnership’ between the two countries?

For reasons that are both obvious and underlying, relations with India are of paramount significance to Greece. India:

i) will be amongst the fastest growing economies in the next decade (Harvard Kennedy School Growth Lab, July 2023), while its nominal GDP is estimated to surpass that of Japan and Germany by 2027 (IMF, 2023) and that of the U.S. by 2075 (Goldman Sachs report, 2023) becoming initially the third and ultimately the second largest economy in the world- second only to China;

ii) is home to a young and outgoing population which, since the beginning of the current year, is the globe’s largest, a fact that will lead to more investments, flourishing of innovation, and sharp increase in India’s outbound tourism;

iii) harbors a strong aversion towards aggressive revisionism and shares Greece’s respect for international law and the rules enshrined in the United Nations Convention on the Law of the Sea (UNCLOS);

iv) is the most populous democracy the world has ever seen and its policies are governed by fundamental principles of the UN Charter, such as the non-violation of a country’s territorial integrity, respect for national sovereignty, and prohibition of threat or use of force as one’s tool to accomplish political ends or resolve one’s disputes;

v) like Greece, it is a cultural superpower with a rich, ancient heritage, thus sharing Greece’s heightened awareness on matters of national heritage protection;

vi) its people has so many similarities with the Greeks, such as its adherence to religious and folkloric traditions and customs, its belief in institutions like family and friendship, its every day way of life, as well as its liveliness and fun which constitute integral part of both the Indian and the Greek cultures, that it is hard to find another people (maybe apart from the Italians) with such a high degree of cultural compatibility with Greece, a guarantee that the people-to-people contacts between the two countries will flourish.

The above render India an ideal partner who is able to offer holistic gains in almost every domain of immediate interest to Greece in the next decade. Athens’s benefits from an upgraded partnership with India are geopolitical, economic, and diplomatic, while spanning four specific sectors:

• Defense

India and Greece conducted a joint naval exercise off the cost of Crete in July 2023. Indian Navy’s guided missile destroyer INS Chennai was deployed alongside the Hellenic Navy’s frigate Νικηφόρος Φωκάς to participate in naval drills in Southeastern Aegean sea, a region of strategic vitality to Greece. Previously, in April-May 2023, the Indian Air Force had partaken in the military exercise ‘ΗΝΙΟΧΟΣ-23’, hosted by the Hellenic Air Force at the Andravida air base, while the latter has been invited by India to participate for the first time in the air exercise Tarang Shakti, which is slated for late September and believed to be the largest of its kind to ever be conducted in India.

On the occasion of the exercise, the Greek Chief of the Hellenic National Defense General Staff, Konstantinos Floros, is likely to visit New Delhi. Through bilateral and multilateral military drills, India and Greece lay the foundation for substantial progress in the domain of interoperability.

Equally important, India’s uncustomary training ventures outside the immediate South Asia, Indo-Pacific region and its closer military cooperation with Greece send an emphatic message with a clear recipient: the Turkey-Pakistan alliance. As India’s primary geopolitical rival (along with China), Pakistan has always been amongst the top foreign policy priorities in the Indian agenda. In the recent years, Islamabad has embarked upon a phase of military modernization with a special focus on air and naval capabilities upgrades, chiefly aimed at negating India’s existing conventional military superiority.

At the same time, Pakistan has demonstrated its will to project power abroad in regions of the world that bear strategic significance as global commercial hubs, including the Mediterranean sea. The backbone of these ambitious Pakistani endeavors is Turkey’s material and technological support. Currently, Ankara is Pakistan’s second largest arms supplier and has trained at least 1,500 Pakistani military officials on its soil since 2000 (Marisa Lino, IISS, 2020).

Further, the Turkish state-owned defense company STM has modernized three Pakistani Khalid-class attack submarines (Franz-Stefan Gady, The Diplomat, 2016), while Turkey has supplied Pakistan’s Armed Forces with its notorious, combat-tested Baykar Bayraktar TB2 drones and has agreed to assist Islamabad in modernizing its F-16 fighter jet fleet (Imtiaz Ahmed, Hindustan Times, 2016). In 2017, the Turkish and Pakistani military industries inked a deal for joint construction of four Turkish Ada-class frigates, which are scheduled to be fully operable and at Pakistan’s disposal in 2024 (Mustafa Kirikcioglu, Daily Sabah, 2019).

In 2019, Pakistan was the main participant in Turkey’s military exercise ‘Eastern Mediterranean-2019’ deploying both naval and air forces. Even more tellingly, the Turkish deputy minister of defense stated earlier this year that talks on Pakistan’s admission into the Turkish Kaan combat aircraft program would commence soon (Tony Osborne, Aviation Week Network, 2023).

The sole foreign country that is currently in the program is Turkey’s brotherly state, Azerbaijan, which speaks volumes for the trajectory of the Pakistani-Turkish relations. Given the recent developments in their bilateral cooperation, it would not be an exaggeration if one characterized Turkey and Pakistan as ‘brotherly states’ or used the term ‘special relationship’ to describe the current enhanced partnership between the two Muslim countries.

Seeing Turkey play an instrumental role in its geopolitical rival’s military upgrade, which will eventually pose a more severe threat to its national security and might shift the regional balance of power (especially in Kashmir) to its detriment,  India feels increasingly insecure vis-à-vis Ankara. This sense of insecurity causes New Delhi the need to counterbalance against both Pakistan and Turkey.

That’s when Greece comes into the picture. Facing a similar, if not more serious, strategic challenge from Turkey, Athens has a historic opportunity to take advantage of India’s frustration with Ankara’s dealings with Pakistan (a frustration that grows even more when Turkish president Erdogan takes a public stand against New Delhi’s policies on the Kashmir issue) forming a Hellenic-Indian alliance as a counterweight to the Turkish-Pakistani one. Practically, this can entail the continuation of joint military exercises in the Mediterranean between the two countries with gradual introduction of more advanced drills, such as joint operations on tactical level in multiple naval war scenarios, live fire training, operations under one command, information-sharing etc.

Beyond military drills, the Greek defense industry can pursue deals with the Indian ministry of defense for technological know-how transfers and programs of joint construction of military equipment in order for Greece to eventually be able to indigenously produce state-of-the-art mid-range ballistic missiles (such as India’s Brahmos missiles) and advanced anti-tank weapons.

Such deals could use the blueprint of similar bilateral defense agreements that Athens has signed with the United Arab Emirates (2020), France (2021), and Israel (2020). As a rising powerhouse in arms exports with 24% increase in weapons sales in 2023 (Reuters), India needs reliable clients in its pursuit of grabbing a larger share in the arms market.

Greece is on its way to achieve a greater level of self-sufficiency for some of its military needs, but definitely has to continue importing a lot of weapons in the foreseeable future, especially insofar as Turkey ramps up the strengthening of its own military capacities. Amidst the severe deterioration in the relations with Russia- a significant arms supplier- after the latter’s invasion in Ukraine, Greece can turn to India for part of its military imports.

Additionally, India’s status as the largest arms importer in the world (SIRPI) offers opportunities to the Greek military industries. Greece has already started to export weapons systems at higher volumes than in the past (mainly to Gulf states) and an arms deal with India will afford it the chance to enter a new, vast market with steadily increased demand. Lastly, the multilevel ‘strategic partnership’ announced during the meeting between Mitsotakis and Mondi and the ostensible amelioration of the Hellenic-Indian military ties might constitute the first step toward the signing of a Greece-India strategic pact with a clause of ‘mutual defense and military assistance’ in case of an attack against either country’s territorial integrity or sovereignty.

Athens has signed analogous agreements with Paris and Abu Dhabi (Plakoudas, New Lines Institute, 2021). A potential Hellenic-Indian defense pact, if realized, will bring another powerful player on Greece’s side in the Eastern Mediterranean significantly contributing to its security, as well as to the stability and peace of the wider region that remains Athens’ foremost priority.

• Trade

As per the United Nations COMTRADE database, bilateral trade between India and Greece stood at $1.1 billion in 2022, a decrease from the $1.5 billion in 2021. Over the past three decades, however, there has been an upward trend in the Hellenic-Indian trade relations with the Greek exports to India, in particular, increasing on an annual average of 8.98% since 1997 (Observatory of Economic Complexity). Despite the steadfast rise of the Greek exports, bilateral trade is not even. Greece has consistently been running a trade deficit with India that is over $0.5 billion every year.

Prime minister Kiriakos Mitsotakis is determined to reduce Greece’s overall trade deficit, which results in lower foreign exchange reserves, thus limiting flexibility and undermining economic security. Mitsotakis seems to be winning the bet as Greece’s overall deficit fell from $3.05 bn in June 2022 to $2.6 bn one year later (tradeeconomics). But he is doing so in a non-optimal way: by cutting down on imports rather than scaling up the national exports.

The upgrade of the Greece-India relations to ‘strategic partnership’ and the commitment by the leaders of the two countries to ‘double bilateral trade by 2030’ presents Athens with opportunities to sell more products to the Indian market slashing its current trade deficit with New Delhi that accounts for approximately ¼ of its overall deficit. Recovered paper, scrap iron and aluminium, and refined petroleum, will continue comprising the bulk of Greece’s exports to India and are likely to multiply in the future, but the big winners of the reinvigorated Hellenic-Indian trade cooperation will be the Greek food producers.

As mentioned above, the economy of India is growing rapidly and has the comparative advantage of a young and energetic population working, investing, and producing on exponential rates. The latter is a driver of the steady rise in India’s nominal GDP, as well as India’s GDP per capita that according to figures from the World Bank increased by 8.3% in 2020 and by 6.7% in 2022. Additionally, forecasts from the Standard Chartered Report project a staggering 70% GDP per capita increase by 2030, which, absence a record-high inflation, means that the purchasing power of the average Indian will rise meteorically.

The Indian middle class is the fastest growing major segment of the Indian population rising by 6.3% annually in the last twenty years and accounting for 31% of the country’s total population (PRICE ICE surveys, Economic Times, 2023). This percentage is estimated to climb at 38% in 2031 and at 60% in 2047. Even more indicatively, India’s household consumption is projected to reach $3.4 trillion (which is equivalent to India’s current total GDP), a steep increase from today’s $2.1 trillion!

Hence, in the next years Indians will have the ability to spend more and logic says that food products will be one of the first commodities in the country’s market whose demand will go up. Goods like honey and olive oil have already begun to take a more prominent place on the Indian everyday table  as the younger generations turn to the adoption of a healthier diet. By 2028, demand for honey and olive oil in India is expected to increase by 8.7% and 9.2% respectively (Research and Markets/Industry Arc).

At the moment, Spain is India’s largest exporter of honey, while Spain and Italy are by far New Delhi’s top exporters of olive oil. India is among the twenty largest olive oil importers in the world (OEC). Today, Greece, the world’s 5^th top producer of olive oil in terms of quantity (World Population Review, 2023), 2^nd in terms of quality, and Europe’s 4^th largest honey producer (Greek News Agenda, 2022), does not have any significant presence in the Indian market for these goods with New Delhi not appearig even among the top ten destinations for Greek olive oil and honey.

This can change. Greece has room to ramp up olive oil and honey production in the next years, more so if these industries are undergirded by government subsidies. Within the newly established ambiance of enhanced cooperation between India and Greece the Greek producers of olive oil and honey may increase their quantities, come into contact with Indian buyers, and concentrate their efforts on breaking decisively into the Indian market competing with their Spanish and Italian peers.

Hellenic products winning market share in India presupposes a positive attitude from the Indian government that occasionally increases food import taxes to buttress indigenous production within the context of Mondi’s ‘Made in India’ policy. The Hellenic-Indian rapprochement and the dawn of ‘strategic partnership’ between Athens and New Delhi makes it likely that at least in the foreseeable future Mondi’s government will adopt a favorable stance vis-à-vis the Greek exporters removing possible dis-incentives or hurdles to the flow of Greek produce into India.

The current circumstances for the Greek traders of honey and olive oil are quite auspicious. Similar opportunities may come up for the Greek exporters of dairy products. India has not imported dairy since 2011 but the spike in domestic demand, partly due to the population boom, coupled with the relative stagnation of domestic dairy production that does not seem able to keep up with the skyrocketing demand, led India’s Animal Husbandry and Dairy Secretary Rajesh Kumar Singh to state that his country might need to import dairy products, such as butter and milk, in an effort to cover its future needs (Business Today, 2023).

If this happens, the Greek dairy producers will have a unique opportunity to set their foot in a vast market that has been out of reach for more than a decade. Then, they can tap into the globally recognized quality of their products to conquer the infinite potential the Indian market promises.

• Tourism/Investments

The increase in the purchasing power of the average Indian will not only drive domestic spending upwards but it will also signify more financial leeway for Indians who travel abroad. The almost certain rise in the money Indian tourists spend during their vacations, paired with the growing population of India, turns New Delhi into the most promising source of outbound tourism for those countries whose economy is founded upon this particular industry.

Greece is certainly among these countries with tourism making up 18% of its national GDP (Statista, 2022) and occupying roughly 20% of its workforce (Hellenic Government). Indian outbound tourism is estimated to bring more than $42 billion within 2024 and its latest investments in infrastructure and commercial aviation (e.g. modernization of local airports, new training programs for pilots and cabin crew) are bound to further increase this sum in the next years (CNN, 2023).

The countries currently reaping the benefits from the spike in Indian tourism are mostly Vietnam, Singapore, Indonesia, and Thailand thanks to geographical proximity. It is observed, however, a progressive shift in the preferences of Indian tourists compared to previous years. Countries such as France and Switzerland feature in the list with the ten most popular destinations for the Indian tourists. On the other hand, a destination like Greece that enjoys formidable reputation as a global tourist attraction receiving 27.8 million tourists in 2022 (Bank of Greece), welcomed less than half a million out of 18 million Indians who travelled abroad in the same year (Business Today, 2022).

There is no doubt that the current Greek government has taken steps to attract Indian tourism and has achieved significant increases in the numbers of Indian visitors, but the potential is much greater than what has been accomplished so far. As the Hellenic-Indian bilateral ties strengthen Greece should finally materialize the long-awaited deal to connect Athens and Greek islands to Indian cities via direct flight that is pending since 2017 when the agreement in question was signed. Besides, Greece is in closer proximity to India than any other E.U. country.

Further, Athens can further loosen the tourist visa criteria for Indian citizens and slash the time period required for such visas to be issued (the recent increase in personnel at the Hellenic Embassy in New Delhi and the Hellenic Consulate in Mumbai is an encouraging first step in this direction). On strategic level, Greece should pursue the signing of agreements of mutual promotion of the Hellenic and Indian cultures and familiarization of the countries with the natural beauty of each other.

The latter will pave the way for systematic launching of Greek tourist campaigns in India that will bring more Indian tourists. A meteoric rise in Indian tourism in Greece will generate enormous benefits for the Greek economy as Indian tourists spend more during vacations than any other moment in the past (Reuters, 2023).

One sector that will have a positive impact on both the tourist industry and the Greek economy writ large is the direct investments. It is not a coincidence that during his visit to Greece prime minister Mondi was accompanied by some of India’s most powerful entrepreneurs who met with their Greek counterparts and explored potential synergies in construction, pharmaceuticals, shipping, food, textiles and more.

Of paramount importance to Greece is the involvement of the Indian GMR Group in the renovation of the Castelli airport in Crete and the construction of reliable highway infrastructure around it With the financial support from the GMR Group Castelli will transform into an international airport rendering Greece-India direct flights possible.

Greece’s gradual recovery under the guidance of a stable government after years of financial mismanagement and extreme austerity measures seems to be restoring investors’ confidence in the Greek economy. The direct foreign investments in Greece were at a 50-year high in 2022 accounting for 3% of its GDP as per the World Bank.

The Greek government must harness the positive momentum it has created itself luring more investors from India whose economy has incalculable growth potential and shows signs of revitalized appetite for outbound investments (according to the Hindu Business Line, India’s investments abroad went from $2 billion in 2004 to $15 billion in 2021).

The India-Greece strategic partnership will open more communication channels between the business communities of the two partners leading to targeted investments, tailored to the specific interests of both the recipient (Greece) and the investor (India). In achieving this, the alignment of public and private interests will be instrumental and so far the first signs are quite encouraging.

Equally important, initiatives on informing Indian investors about potential benefits related to doing business in Greece, such as those stemming from the ‘golden visa’ program exclusively applied to investors who bring their money in the country, can be vital in getting more Indian powerhouses to invest in Greece.

For instance, one such initiative took place on September 16 at the hotel Le Meriden in New Delhi spearheaded by a Greek law firm and a Greek consulting group with strong presence in India.

Making the most of the newfound dynamic of the Hellenic-Indian strategic partnership, requires Greece to take similar initiatives in the future, which can be institutionalized within a preordained framework of annual trade summits held in India’s main cities with the participation of Greek and Indian entrepreneurs and representatives of the political apparatuses of the two countries. The meetings can be coordinated by the Hellenic-Indian Chamber of Commerce.

Diplomacy

On top of the aforementioned benefits, the upgrade of the Hellenic-Indian relations secures Greece a powerful ally in the international diplomatic arena. India’s influence is spreading throughout the globe, catapulted by New Delhi’s growing soft power (Indian diaspora plays a central role in this), economic progress, and military modernization.

Within a constantly changing international system that is moving decisively toward multipolarity India has secured a front seat. Besides, let’s not forget that India has been a UN Security Council non-permanent member for the past sixteen years while being a founding member of impactful international and regional organizations, including BRICS and Quad.

Such a diplomatic heavyweight can amplify Greece’s global reach and make its voice louder and more frequently heard within the international fora. The Hellenic-Indian cordial ties is not a new concept. India and Greece have always seen each other eye to eye and their relations have invariably been characterized by an innate civilizational bond that dates back to the antiquity and derives from mutual respect for each other’s cultural heritage.

In external affairs, more often than not have they both expressed similar views always considering the democratic ideals and the rule of law enshrined in the fundamental principles that govern the post-World War II international order.

The strategic partnership is just the ‘icing on the cake’ of a long standing India-Greece special relationship opening the door to a robust diplomatic partnership that may bring about mutual support in more sensitive issues than it has been the case in the past. In particular, Athens can expect India to heighten the pressure on the United Kingdom with respect to the repatriation of the Parthenon’s stolen marbles (New Delhi has already taken a stance in Greece’s favor).

As itself victim of ‘cultural theft’ from London, India has an interest in setting a precedent for the return of stolen artifacts to the countries of origin, as well as for the issuing of indemnity from the governments of the countries that held on the artifacts in question.

Other matters on which Greece may receive India’s invaluable diplomatic support are the Cypriot Issue, which has been mentioned in the past by Indian Foreign Minister S. Jaishankar as a tacit response to Turkey after Erdogan’s comments on Kashmir (FirstPost, 2021), and the disputed by Ankara Greek Exclusive Economic Zones (EEZs) and territorial waters in the Aegean Sea, since New Delhi faces a similarly aggressive revisionism from China both in the Indian Ocean and on its land border.

• What’s in for India?

Like every bilateral cooperation in international relations, in order for the Hellenic-Indian partnership to flourish both sides must benefit from it. India might be a superpower in the making leaping to its zenith, but it does have multiple gains to reap from a strategic cooperation with the strategically significant, albeit smaller in military/financial/industrial size, Athens.

From a purely operational perspective, the military drills of the Indian Airforce and Navy with the Hellenic Armed Forces in the Mediterranean waters and the Greek skies do not bear just a symbolic character. Besides the powerful message these exercises send to the Turkey-Pakistan axis, they enrich the experience of the Indian Navy in regional operational theaters outside the Indian Ocean serving India’s schemes for progressive power projection abroad, while familiarizing the Indian pilots with the system and unique characteristics of the F-16 fighter jets (which Greece possesses) that make the backbone of the Pakistani Airforce.

From a diplomatic standpoint, India wins another Western ally, NATO and EU member, with considerable power in the Balkans and the Eastern Mediterranean. Athens endorsed New Delhi’s candidacy for the G-20 presidency that began in December 2022, having at the same time avoided meddling with the Kashmir issue and pointing the finger to India as many of its other Western partners occasionally do.

By entering a strategic partnership with Greece, New Delhi consolidates the presence on its side of a loyal European partner and a Western voice, which will back it even in the face of backlash and even when other Euroatlantic powers heavily criticize it. Moreover, with the EU-India bilateral trade in meteoric rise ($130 billion in 2022 as per Maritime Executive) and the free trade agreement between Brussels and New Delhi more realizable than ever, India seeks the most stable and secure route to ship its products to the European markets.

The current plan is for India to use the Iranian port in Chabahar to unload its outbound produce and then send it to Europe via land. Nevertheless, the Nagorno Karabagh war and the continuous insecurity on the Azeri-Armenian borders, a transit point for the Indian exports to Europe if Chabahar is used, render this plan much less attractive.

Πηγή: Stratfor

For this reason, the Mondi government is considering the Greek port of Piraeus as an alternative to Chabahar. In this scenario, the Indian exports to European countries will be passing through port-stations in the United Arab Emirates or Israel’s Haifa port, countries with which New Delhi cooperates within the context of the I2U2 group that also includes the U.S. (Maritime Executive, 2023). A possible drawback in the above plan is the fact that 67% of Piraeus port is owned by COSCO Shipping, China’s foremost state-owned shipping company. It is not easy to imagine India agreeing to use a port that is controlled by its primary geopolitical rival without eliminating the chances of this port becoming a liability rather than an asset.

This cannot happen in a heartbeat, but a compromise based on mutual economic interest is definitely attainable as the recent history of the Indo-Chinese trade teaches us. Finally, a shipping superpower such as Greece, which today controls 21% of the global commercial fleet (Οικονομικός Ταχυδρόμος, 2023), has the capacity to ensure without any disruptions the transportation of basic goods from/to India whose trade ambitions and domestic demand will continue to increase on a larger scale than its commercial fleet that remains disproportionally small. Greece truly has what it takes to become what the Greek Foreign Minister, Georgios Gerapetritis, described as ‘India’s gate to Europe’.

From the arrival of Alexander the Great to India around 326 BC to the erection of Mahatma Gandhi’s statue in the heart of Athens in 2021 AC, Greece and India have maintained unshaken bonds as two cultural superpowers with mutual respect, deep understanding for each other, and an old and true friendship between their peoples.

Their strategic partnership creates an official framework of cooperation and unlocks the hitherto untapped potential of the Hellenic-Indian relations on a broad spectrum of common interest fields with particular emphasis on the sectors of defense, trade, tourism, diplomacy, and investments. It is the dawn of a natural alliance which is as promising as it is relevant.

Both the current and the future governments in Athens and New Delhi must treat this potential with consistency and collect all the advantages included in the Hellenic-Indian strategic partnership, forging a long term, stable alliance. India and Greece both left their mark on the past of mankind, they are walking hand in hand in the present, and they are poised to conquer the future together.

*The original version of this article was published in Greek by Ethnos.gr on September 5, 2023

ECONOMIST-US Ambassador Tsunis highlights Greece’s leadership role in the Balkans

Ακολουθήστε τη HELLAS JOURNAL στη NEWS GOOGLE