Second India-Eu Business Summit
November 22-23, 2001, New Delhi

Speech by Thiru Murasoli Maran, Union Minister for Commerce & Industry

Hon'ble Prime Minister of India; Your Excellencies, President European Commission; Prime Minister of Belgium and President of the council of European Union; President FICCI; President CII; Excellencies; Distinguished guests; Ladies and Gentlemen.

The distinguished delegates and yesterday seen the presentations on Indo EU co-operation in the important sectors of Engineering, Information Technology, Telecommunications and Food Processing jointly prepared by our Industry Associations and the European Agencies identified by the EU. The opportunities that these sectors unfold can just be the beginning. We are happy that the two sides have committed for similar joint initiative in future.

Since India's introduction of reforms programme in 1991, 7778 investment and technological agreements involiving an investment of over US$ 15.1 billion have been approved with EU firms which is 25.4% of the total investment approved with all countries. But actual flow of FDI from EU is US $ 3.66 billion which is 24.38% of the total FDI approved for EU. The European Union is India's top investment entity but our concern is that in real terms the realization rate of actual inflow of FDI is not commensurate with the potential. This has to be addressed effectively. We are ready to provide a framework for such a joint consultation.

It is important to ensure that the process of trade liberalisation is as inclusive as possible. As UN Committee of 11 has stated two years ago, the anticipated gains of trade liberalization of developing economies have not materialized fully. The need to address the broader trade issues with respect to market access in order to strengthen the trade liberalization process will, we hope, also be appreciated by the European Union.

Many of our market access problems, if closely examined, revolved arond differential rates of tariff or tariff quotas being applicable on different partners and India not being at the favourable end of it. How do we overcome them? In India you have the largest democracy and also one of the largest reservoirs of consumers in the world. Our relations are histroic. Summits such as these are very clearly intended to bring about much closer relations between European Union and India. How do we translate all these positive features into better access conditions so that our exporters do not feel deprived on this count ? - This is a challenge that we need to actively take up.

During my bilateral talks with Trade Commissioner, Mr. Pascal Lamy, my delegation has given specific proposals to enhance the export potential of Indian goods, which include the GSP regime of EU which needs to recognize the meager share of India in the basket of EU imports, improving bilateral trade in the textile sector, frequent countervailing actions we face etc. We look forward to working hand-in-hand to improve our trading relationship.

Imbalances in multi-lateral trading system which could not be perceived back in 1994-95 have now become apparent. Needless to say that this trend must be reversed to grant development dimension to the WTO system. Trade is not an end in itself. The development deficit needs to be made good by the multilateral trading system. India and EU have also agreed for senior level exchange of views to ensure developmental agenda in the work programme of WTO. May I take this opportunity to congratuate the EU and, especially, Commissioner Pascal Lamy, for leadership role played at Doha.

The second India-EU Business Summit has been successful in terms of fixing the future goals and also measures to reach the milestones. The success would largely depend on the Captains of Industry and Business. Before concluding, I would like to thank CII, FICCI and the Departments of our Ministry, who have worked ceaselessly in tandem to maximize public and private synergies and to make this joint initiative a success. I am also grateful to esteemed guests and Honb'le Prime Minsters who have been kind enough to grace the occasion.

Thank you