India- Spain: Weaving New Tapestries of Partnership and Progress

Weaving a rich tapestry around their historical ties, India and Spain bilateral relations have grown into a robust partnership encompassing trade, investment, culture and technology.

Their relationship stems back to the 16^th century being one of trade, when Portuguese traders first introduced Spanish goods to India. These ties have grown stronger and deeper with the passing decades, so much so that today Spain is India’s 6th largest trade partner in Europe.

In the financial year 2023-24, bilateral trade reached a value of US$ 7.2 billion. Over the past five years India’s exports to Spain have grown at a CAGR of 4.99% to reach US$ 4.8 billion in FY24. India’s largest export to Spain includes iron and steel, organic chemicals, articles of apparel, electrical machinery, and mineral fuels.  Similarly, India’s imports from Spain are currently valued at US$ 2.4 billion, which is a 0.36% share of India’s total imports. India’s largest imports from Spain are beverages, spirits, and vinegar, nuclear reactors and parts, mineral fuels, organic chemicals, and plastics articles.  

If we talk about investments, Spain is India’s 16^th largest Foreign Direct Investor, with US$ 4 billion invested since 2000 and over 280 Spanish companies active in India across the renewable energy, automotive, and ceramics industries. Additionally, Indian companies have invested over US$ 900 million in Spain predominantly in the IT services, pharmaceuticals, and logistics sectors.

With an aim of bolstering economic ties, India and Spain, have held regular meetings of the Joint Economic Commission, which focuses on addressing trade barriers, enhancing market access, and encouraging investment in high-growth sectors.

The two countries are also exploring new areas of cooperation in information technology, telecommunications, and energy – fields where India and Spain have complementary strengths. Initiatives like “Make in India” and “Digital India” create favourable conditions for further collaboration, encouraging foreign direct investment.

Potential Areas of Cooperation

Renewable Energy

Both India and Spain are committed to achieving ambitious renewable energy targets. With Spain’s advanced technologies collaboration to increase India’s renewable energy capacity, and joint ventures in this sector have the potential to drive sustainability efforts forward. Together the two countries can collaborate on energy storage solutions, smart grids and green hydrogen to make a big impact on the global economy.

Infrastructure and Transport

Spain is globally recognised for its expertise in infrastructure, particularly in high-speed rail, metro systems, and highways. This provides immense opportunities for cooperation for a rapidly urbanizing India. Recently an MoU was signed between India and Spain for cooperation in planning, design, development, commissioning and operation of infrastructure, stations, railways facilities and equipment of long distance passenger and freight networks as well as urban and regional railway systems.

Defence and Security Cooperation

Over the past few decades, India and Spain have been strengthening their defence ties. In 2020 the two nations signed an agreement, to collaborate on the construction of new-generation ships for the Indian Navy. This partnership marked a milestone in India-Spain defence cooperation, showcasing Spain’s capabilities in shipbuilding and India’s aspirations to modernise its navy.

In a major step forward for India’s defence and aviation sectors, Prime Minister Narendra Modi and Spanish Prime Minister Pedro Sanchez inaugurated the Final Assembly Line (FAL) for the C295 aircraft in October 2024, marking a shining example for India’s “Make in India” initiative.

Today, India and Spain are poised to take their economic relationship to new heights. Their partnership holds significant potential for the future, offering pathways to collaboration in sustainable development, technology, infrastructure, and defence.

By utilising each other’s advantages and by pooling their resources and expertise, India and Spain can indeed open up new doors to growth and prosperity. This will be instrumental in advancing the larger objective of international economic cooperation. By embracing these emergent opportunities, both nations can play a catalytic role in building a resilient, more prosperous, secure and sustainable world.

By embracing emerging opportunities, India and Spain can continue to build a resilient partnership that contributes to a more prosperous, secure, and sustainable world. As they move forward, this alliance promises to bring immense benefits not only to their citizens but also to the broader global community.