India and Ireland: Strengthening Economic Ties with a Joint Economic Commission

India and Ireland are poised to take their economic partnership to new heights as they negotiate the establishment of a joint economic commission, set to be formalized by the end of 2024. With bilateral trade in goods and services having doubled over the past decade, the commission aims to deepen collaboration, particularly in key sectors like IT, education, healthcare, and business services.

Ireland views India as a crucial partner in the Asia-Pacific region, with both countries keen on expanding their economic and diplomatic ties.

As of 2024, India and Ireland are in advanced negotiations to establish a joint economic commission, with an announcement expected by the end of the year. According to media reports, this commission is part of broader bilateral efforts that could pave the way for a strategic partnership agreement in the near future.

The primary goal of the commission will be to strengthen trade and economic relations, with the current trade volume between the two countries standing at US$6.3 billion in merchandise exports. Over the last decade, trade in both goods and services between India and Ireland has doubled.

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India already has over 30 similar agreements with countries like France, the US, the UK, and Russia. Its first strategic partnership with a European country was signed with France in 1997, and India has recently expanded its cooperation across Europe, signing agreements with Italy and Greece in 2023.

Ireland views India as a key partner in the Asia-Pacific region, a sentiment underscored during Foreign Secretary Joe Hackett’s visit to New Delhi in January 2024, where a Hindi translation of Dublin’s Asia-Pacific Strategy was launched, highlighting Ireland’s increasing focus on India.

Ireland taking note of India’s growing global economic influence

Ireland’s Ambassador to India, Kevin Kelly, has emphasized India’s growing global economic influence and advocated for stronger political, economic, and trade relations between the two countries. On the occasion of 75 years of India-Ireland diplomatic relations, Ambassador Kelly highlighted India’s rapid rise, noting its imminent position as the world’s third-largest economy. He also reflected on Ireland’s transformation, mentioning how it went from being the poorest European Union (EU) member in 1973 to the richest in 2024.

Kelly also reiterated Ireland’s desire to establish a joint economic commission with India, seeing it as an opportunity for both governments to explore new areas of partnership and collaboration. He acknowledged that while Ireland’s past Asia-Pacific strategy was heavily focused on China, there is now a renewed focus on India. The new strategy aims to strengthen political, economic, and trade links with India.

Speaking on India’s growing role in the Asia-Pacific region, Kelly recognized India as a leader, both regionally and internationally. He highlighted the country’s increasing influence and expressed hopes that India would use its position to address regional and global conflicts.

Kelly also highlighted the significant Indian community in Ireland, which is now the third-largest foreign national group in the country, after Polish and UK citizens. Indians make up nearly 2 percent of Ireland’s population, with around 100,000 Indian residents contributing to Ireland’s society, economy, and culture. He praised the professional skills and respect the Indian community has garnered in Ireland.

Bilateral trade relations between India and Ireland

Economically, the relationship between India and Ireland has grown significantly. In the financial year 2023-24, bilateral trade reached US$6.38 billion, reflecting the deepening economic cooperation.

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

India’s total trade in goods with Ireland between April 2023 and March 2024 reached US$6,384 million. While India exported US$702.73 million worth of goods to Ireland, it imported commodities worth US$5,681 million.

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Major Indian exports to Ireland included organic chemicals, machinery, aircraft, and pharmaceutical products, while key imports from Ireland consisted of electrical machinery, medical equipment, plastics, and aircraft components.

Ireland-India services trades

India and Ireland’s bilateral trade relationship is heavily dominated by services, with significant potential for India to expand its services exports to Ireland, particularly in sectors like business services, education, tourism, and healthcare.

India’s trade in services with Ireland is four times larger than its goods trade, with room for further expansion. In 2020, India’s total trade in services with Ireland was nearly four times that of its goods trade, with the services trade balance favoring Ireland. India’s exports to Ireland grew from US$108 million in 2010 to US$1.4 billion in 2020, while imports rose from US$756 million to US$2.5 billion. India’s trade deficit with Ireland in services stood at US$1.1 billion in 2020, with the bilateral services trade valued at approximately US$4 billion.

In 2020, Ireland accounted for 8.5 percent of India’s total services exports to the EU, ranking as the fourth-largest export destination. Simultaneously, Ireland was India’s top source of services imports from the EU, comprising 20.5 percent of India’s total services imports from the region.

India’s primary services exports to Ireland included professional and management consulting, computer services, and transportation, while Ireland’s main services imports were research and development, intellectual property, and other business services. Ireland, a net importer of professional and management consulting services, presents an opportunity for India to further its exports in this sector.

Ireland’s status as the only large English-speaking country in the EU following the UK’s exit (Brexit), combined with a growing demand for IT and engineering skills, creates opportunities for Indian professionals, particularly in the information technology sector. A report by Ireland’s Skills and Labour Market Research Unit highlighted shortages in skilled labor, especially in IT and business services, which India could help address.

India-Ireland Double Taxation Avoidance Agreement

On December 26, 2001, India and Ireland signed the Double Taxation Avoidance Agreement (DTAA), which was intended to stop double taxation and fiscal evasion with regard to income and capital gains.

Source: India Briefing

Business engagement

Irish businesses have also expanded into the Indian market, with companies like Connolly Red Mills and ICON making significant investments. Additionally, Indian firms such as TCS, WIPRO, and Hindustan Zinc have made notable inroads into Ireland’s economy.

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Notable developments include TCS acquiring 1,500 staff from Pramerica Systems Ireland and Tech Mahindra acquiring a majority stake in Perigord Life Science Solutions.

In terms of business opportunities, Ireland is well-positioned to explore sectors in India such as agriculture, financial technology, medical technology, aviation, and clean energy. The agricultural sector, contributing 18 percent to India’s GDP, presents significant opportunities for Irish companies specializing in machinery and precision farming technologies. The rapidly expanding fintech and med-tech industries, expected to reach valuations of US$160 billion and US$30 billion respectively by 2025, also offer potential for Irish companies to collaborate and invest.

Diplomatic relations

Formal diplomatic ties were established in 1947, with India opening its embassy in Dublin in 1951. Ireland opened its embassy in New Delhi in 1964, ahead of opening embassies in Moscow, Tokyo, and Beijing. Honorary consulates were later established in Mumbai (1976), Bengaluru (2000), Chennai (2010), and Kolkata (2017). In 2019, Ireland expanded its diplomatic presence by opening a Consulate General in Mumbai, in line with its Asia-Pacific outreach policy.

Major agreements

India and Ireland have signed several key agreements, including:

1. Air Transport Agreement (1991)
2. Foreign Office Consultations Agreement (1993)
3. MoU on Joint Working Group for Information Technology (2000)
4. Agreement on Avoidance of Double Taxation (2000)
5. Cooperation in Culture Agreement
6. Agreement on Scientific and Technological Cooperation
7. Agreement between Science Foundation Ireland and Indian National Science Academy (2006)
8. Authorization for dependents of diplomatic staff to engage in gainful employment (2018)
9. ICCR Chair on Politics and International Affairs at Dublin City University (2021)
10. ICCR Chair for India Studies at University College Cork (2021)

Further MoUs on education, health, migration, and cultural exchanges are currently under discussion.

Multilateral cooperation

Both India and Ireland were non-permanent members of the UN Security Council for 2021-2022, working together on shared priorities like multilateralism, climate change, peacekeeping, and a rule-based international order. Bilateral consultations on UNSC matters were held virtually on February 25, 2021. Ireland’s Minister for Transport and Environment participated in a key debate on Maritime Security hosted by India in August 2021 during its UNSC presidency.

Future opportunities

Brexit has opened new doors for India-Ireland collaboration, positioning Ireland as an attractive partner in the EU due to its English-speaking workforce, common law system, low corporate taxes, and skilled labor. Sectors like AI, medical research, pharmaceuticals, and cyber security present significant potential for expanded partnerships.

With a growing Indian community in Ireland, numbering around 100,000 people, the country has become an attractive destination for Indian students. Currently, about 10,000 Indian students are studying in Ireland, making it the second-largest destination for Indian students in the EU after Germany.

Ireland is also emerging as a preferred destination for Indian students, particularly in fields like STEM. With the highest number of STEM graduates per capita in the EU and a strong focus on fields like artificial intelligence and MedTech, Ireland reportedly offers numerous educational opportunities. Collaborations between Indian and Irish educational institutions could further strengthen ties in this area.

Additionally, Ireland’s clean technology expertise is aligned with India’s renewable energy goals, including a target of 450 gigawatts of capacity by 2030. Additionally, the aviation sector in India is growing rapidly, with opportunities for Irish companies specializing in aircraft engineering.

As Irish companies increasingly tap into India’s skilled workforce, new business models like the Employer of Record (EOR) are helping to streamline operations, ensuring compliance with local regulations and fostering greater bilateral trade and investment.

Investment opportunities, especially in emerging technologies, present a further area for strengthening ties. The ongoing negotiations to an India-EU free trade agreement could also open new avenues for boosting bilateral relations.

Conclusion

In conclusion, the India-Ireland relationship continues to flourish through strong economic ties and mutual collaboration across various industries. With promising opportunities in emerging sectors and a shared vision for the future, both nations are poised for continued growth and partnership.

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