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

Speech of Thiru Murasoli Maran, Union Minister for Commerce & Industry, GOI

H.E. Mrs. Annemie Neyts Uyttebroeck, Hon'ble Minister for Trade Policy and Agriculture of Belgium,
Commissioner Lamy, Mr. Amin and Mr. Goenka and other honoured participants.

I appreciate the initiatives taken by the trade and industry bodies of EU and India for organising the second India-EU Business summit as a follow up of the First Indo-EU Summit which opened a new chapter in our political and economic dialogue and demonstrated the importance we both attach to our relationship.

Ladies and Gentlemen, the economic and commercial ties between India and the EU are strong but do not fully reflect the potential that exists. The EU is India's largest trading partner and important source of investment, a major contributor of development assistance and a major destination for our service providers. Such interactions facilitate to sustain and revamp these relations keeping in mind the ever-changing global economic environment.

The first summit held in Lisbon in the year 2000 was a success which paved the way for a variety of pragmatic initiatives. The Science and Technology Agreement and the IT Vision statement which will be formalised at the Summit highlights the qualitative changes and the current state of play that characterizes our current economic relations, which was once dominated by trade in few products and meagre investments.

Another important follow up aspect of the last summit pertains to the industry-led joint research study in select sectors for improvement in bilateral trade and investment relations. I congratulate FICCI and Cll and their EU counterparts for focussing on suitable topical issues for enhancing trade and investment opportunities. I hope such joint initiatives would be undertaken further to address other emerging sectors like infrastructure development.

The India-EU bilateral trade is over US$ 20 billion per annum and is growing steadily over the years. Nevertheless, there is ample scope for diversification and further expansion of trade as India's share in EU's global imports is just about 1%. Diversification could be achieved by addressing growth sectors like food processing, pharmaceuticals, software, electronics etc. I hope the trade and industry from both sides would focus their future initiatives in such appropriate sectors.

At this juncture, I also want to highlight the concerns and difficulties being faced by the Indian trade and industry in EU market in the form of non-tariff barriers. Some of the non-tariff barriers noticed are SPS/TBT standards in agro/organic products, environment related barriers in respect of marine products and tariff rate quotas in respect of agri products etc.

In order to access the developed markets like EU, there is a need for deeper appreciation of large but developing economies like India. It calls for a series of positive steps in terms of granting GSP, reducing non-tariff barriers and also significant reorientation of contingent remedies. EU is requested to revisit anti-dumping/anti-subsidy initiatives against India in view of India's meagre share in EU market. It is our understanding that the injury to the EU trade and industry is minimal and within tolerable limits.

On the investment front also, the going is good. EU's share in India's FDI approvals from 1991 onwards account for 25% of the total at US$ 15.1 billion. Actual inflow, however, is only US$ 3.66 billion giving a realization rate of only 24.6%. This is not commensurate with the potential and calls for immediate remedial action on the part of all concerned.

As you would already be aware, Government of India has substantially opened up its economy in the past decade as part of the economic reforms process. Tariffs have been brought down considerably and we have removed all quantitative restrictions. Industrial licensing requirement has been abolished but for a small negative list and foreign direct investment policy and procedures compare favourably with liberal regimes of the world.

Our policy for FDI is based on three pillars. These are "Simplicity, Transparency and Non-discrimination". It has been further reinforced by the establishment of the Foreign Investment Implementation Authority for expediting FDI approvals in to projects with a six point strategy. The FIIA has mandate to provide translation of Foreign Direct Investment approvals into implementation, provide a pro-active one stop after care service to foreign investors by helping them obtain necessary approvals, sort out operational problems and meet the various Government agencies to find solutions to problems and maximising opportunities through a partnership approach.

In order to sustain the momentum thus gathered, we have embarked upon an ambitious second generation reforms process. Liberalisation has been effected in the sectors of insurance, housing/urban infrastructure, mass rapid transport system, defence industrial units, manufacturing activities in Special Economic Zones, E-Commerce, telecom services to name a few. All these have made India an attractive destination for doing business and investing.

India is less a tiger than an elephant - a sleeping elephant just awakened. Its steps are measured and steady. But we agree that an elephant also can walk faster and we need to increase our pace to keep steps with the fast moving world.

The deliberations of the Doha WTO Ministerial Conference are still fresh in our minds. We were able to join the consensus in the adoption of the Doha Declaration after some of our key concerns were addressed. We hope that the additional time of two years will allow developing countries to study the implications of any possible negotiations on the so called Singapore subjects before taking a considered view on such negotiations which are to be taken up only on the basis of an explicit consensus. It is also important that all the outstanding developmental concerns raised by developing countries on implementation are duly and urgently addressed and form the prime objective in the next WTO initiatives.

India looks forward to working with EU and other countries in carrying forward the work programme. It is very important that the needs and concerns of the developing countries are fully integrated into all aspects of WTO's activities.

The complementarities of the Indian and European economy provide significant opportunities for further growth especially in the technology rich infrastructural sector and the new emerging areas of bio-technology, pharmaceuticals and other knowledge-driven sectors. I sincerely hope that the new vistas opened up in the first Indo-EU Summit will gather greater momentum and help build up a new strategic partnership.

Before concluding, I want to thank FICCI, Cll and their EU counterparts for organising such an event and wish them success.

Thank you.