Seminar on Indo-German Economic Relations : Looking Ahead on The Occasion of The Visit of H E Gerhard Schroeder, Chancellor of Germany
October 29, 2001, New Delhi

Opening Statement by Mr Rajendra S Lodha, President-Elect, FICCI

H E Dr Werner Muller, Hon'ble Minister of Economics & Technology of Germany
Mr Suresh Prabhu, Minister of Power, Government of India
Mr Arun Shourie, Minister of Disinvestment, Government of India
Mr Arun Bharat Ram, Chairman, CII International
Distinguished Guests
Ladies & Gentlemen

I take this opportunity once again to open this business session.

Presence of H E Dr Werner Muller, Minister of Economics & Technology of Germany, Mr Suresh Prabhu, Minister of Power and Mr Arun Shourie, Minister of Disinvestment, Government of India, is a matter of great encouragement to us and we hope that their respective addresses will give a new direction to Indo-German cooperation dialogue.

The visit of a large German business delegation to India is an historic event at a time when India and Germany are moving towards developing a truly broad-based relationship from dialogue and cooperation to economic partnerships.

We are now poised for new synergies between Germany and India and shared interest in managing the process of globalisation. As we consolidate on our areas of cooperation, the main challenge for us is to accelerate bilateral economic exchanges. This indeed was the message coming from the thoughts expressed by Hon'ble Chancellor in his historic address this morning.

Economic and commercial ties between India and Germany are indeed strong, but far from realising the level of economic interaction that one would expect between the countries. Indian and German economies are more complementary than competitive. However, this is not reflected in the size of our bilateral transactions. It is true that Germany is India's sixth largest investment partner, accounting for roughly 1.7 per cent of our total FDI. However, in the outward FDI flow from Germany over the last decade which has been of the order of US$ 375 billion - India's share has just been 0.2 per cent of the total. We need to work towards identifying and eliminating policy or bureaucratic hurdles to flows of German investments in India.

Of the total international trade of Germany which is estimated to be over a trillion US dollars, bilateral trade between us is less than 1 per cent of that figure. Though Indo-German trade has grown by 70 per cent over the last decade, this compares poorly when we look at growth of India's trade with the US or East Asia. Perhaps, we can identify specific barriers or policy issues that hinder trade flows from both sides. Let us look at strategies to achieve 50 per cent growth in trade turnover over the next three years and perhaps doubling it over five years.

There is a growing perception amongst Indian industry and trade that the anticipated gains of globalisation to developing economies have not materialised. You will, through interaction with the Indian business community, appreciate their disappointment with lack of access to the markets of the developed world in areas where we enjoy comparative advantage.

I may mention here that Indian exports to European Union as a whole have been coming under increasing restrictions on account of anti-dumping, anti-subsidy action as well as other non-tariff barriers. We are also concerned about the restrictions which our service providers mainly software professionals face in terms of visa and work permit regime. The German Government intends to provide 10,000 more Green Cards to Indian IT professionals by 2002. I hope that these cards would provide a more liberal entry regime than what exists now. As an important partner in the EU, we need your support for duty free and quota free access of goods and services.

It is unfortunate that the last negotiations held in Seattle did not yield results. We in India are committed to a transparent and equitable world trading environment and, therefore, we would welcome all measures that strengthen multilateral trading system. In this connection, we look forward to the expeditious conclusion of the mandated negotiations on the Agreement on Agriculture & GATS. We are also deeply concerned that of the 93 "tirets" on implementation related concerns only 4-5 have been address thus far. And all these are of great importance to the developing countries. We hope that the WTO Ministerial meeting at Doha would give primacy to implementation issue rather than place new and contentious issues on the negotiating Agenda.

Mr Minister, while India grapples to enhance and accelerate its economic reforms, there is much that this country can learn from the German experience. The presence of our Minister of Disinvestment, Mr Arun Shourie, immediately reminds me that Germany has had a very rich experience of privatisation and disinvestment. I am sure, there are lessons we can learn.

In conclusion, I would urge all of us who are present here to reflect on the unfulfilled promise of Indo-German commercial exchanges. As we march into the new millennium we should put our heads together to redeem that pledge in full measure.

Lassen Sie dieses neue
Jahrhundert und neue
Millennium eine neue Ara fur eine
Intensive indisch-deutsche
Geschaftspartnerschaft sein
Dankeschun