Joint Meeting of 16th Session of Indo-Romanian Joint Commission and 9th Session of Joint Business Council
October 20, 2003, New Delhi

Inaugural Address by Mr. Arun Jaitley, Hon'ble Minister of Commerce & Industry, GOI

1. His Excellency Mr. Dan loan Popescu, distinguished members of the Romanian delegation, colleagues from the Indian delegation, representatives from business and industry in Romania and India and friends.

2. I feel honoured today to be present here for the Joint Inaugural Session of the 16th Session of India-Romania Joint Commission and 9th Session of the Joint Business Council. It is a privilege for me and the Government of India to welcome you in India along with your delegation from the Government of Romania and the Romanian business. I wish you a very happy and fruitful stay here in India.

3. Let me thank you, Excellency, for agreeing to visit India and to enable us to deliberate together with our Romanian friends, on our relationship in the economic sphere; its present status and the future perspective.

4. Indo Romanian relations date from history. The strength of our relationship is time-tested and our bilateral relations have always been warm and friendly. Our relations with the new democratic Romania continue to be warm and friendly.

5. I am happy that the joint Commission and the Joint Business Council are simultaneously meeting to explore new dimensions in our bilateral trade and investment adding further strength to the existing economic co-operation between our two friendly countries.

6. We live today in a highly integrated and globalized world where no country is immune to developments elsewhere. Organizations such as the India-Romania Business Council not only strengthen business-to-business linkages but help facilitate the formulation of progressive trade and economic policies. Moreover, such interaction between government and business decision-makers, cutting across their traditional, straight-jacketed roles, forms a vital input for policy makers on both sides.

7. Excellency, let me start by briefly reviewing the state of the Indian economy. Some years ago India was identified as one of 10 major emerging markets. It has largely lived up to that potential. Over the last decade India's annual GDP growth rates have averaged 5-6%. India's foreign exchange reserves are close to $89 billion.

8. In 2002-2003, India exported goods worth US$ 52.2 billion showing a growth rate of more than 19% over the year 2001-2002. India's share in world trade has reached 0.8% and it recorded the second highest growth rate at 15%, next only to China. Every year our Foreign Direct Investment flow is increasing. During the year 2001-2002, the Foreign Direct Investment registered an impressive increase which is the highest so far in the history of India-US$ 6.1 Billion by adopting our own conservative computation. While our FDI target is US$ 10 billion per year some economists feel that our economy can absorb more than US$ 20 billion.

9. Inflation is in the low single digits and despite a marginal deceleration in growth rates because of a drought in some parts of the country, the macroeconomic situation remains positive and stable.

10. Today, India's economic fundamentals are strong and growth prospects extremely good. We are one of the two fastest growing economies in the world and as one-economist points out, and we believe, we would be a potential 'Growth Star' of the next decade.

11. The combination of macroeconomic stability, our commitment to continued liberalization and the expanding trade and economic linkages have made India an attractive destination for companies' world wide. Likewise, the liberalization of the India economy and the lifting of controls have meant that Indian firms today are no longer content to witness the influx of multinationals on their shores. They have taken the initiative and have begun making strategic investment overseas.

12. Today, ours is probably one of the most open and liberal investment regimes with conducive Foreign Direct Investment (FDI) environment among the emerging economies.

13. India's scientific, technological and industrial capabilities have matured tremendously since we achieved independence. To give an example - India is now amongst a handful of countries with a well-established capability to successfully launch and operate satellites. We have already gained substantial experience in using satellites for remote sensing to help map our land-use patterns and agricultural resources so as to improve the crop yields and enable our scientists to make accurate meteorological forecasts. This too has opened up new sectors with considerable potential for cooperation.

14. It is heartening that in recent years businesses in both countries have shown an unprecedented enthusiasm to work with each other. Romania is an important trade partner of India. India's exports to the Romania grew by 21.61% in 2002 compared to 2001. Similarly, Romania's export to India increased during 2001, registering a 5.43% gain. The Government of India has approved seven Foreign Collaboration cases for Romania during the period 1991-2003 (June). Actual inflow from Romania for the period 1991 - June 2003 has been US $ 0.02 million which is 3.38% of the Foreign Direct Investment approved by the Government of India for Romania.

15. Our trade statistics do not reflect the potential of trade and economic relations that exists between our two countries. There is great scope for increasing trade in the traditional items such as Drugs and Pharmaceuticals; Iron Ore; Machinery and Instruments; Iron and Steel; Inorganic Chemicals; etc. Keeping in mind the skills acquired by our two nations in the recent past, I feel that we have the capabilities and capacities to diversify our trade basket to include non-traditional, niche products.

16. There is no dearth of new avenues in which Romanian businesses can cooperate with Indian counterparts for trade and investment into India, to mutual benefit. New areas where both our countries can work together to mutual benefit include the new frontiers in information technology, biotechnology and bio-informatics, and entertainment. Moreover, opportunities exist for investment in India in sectors as diverse as tourism and infrastructure, petrochemicals and aviation, mining and oil exploration. Even the defence sector has been partially opened up to foreign investment. The Special Economic Zones recently set up in several Indian states provide an internationally competitive and hassle free environment in which to manufacture for export out of India. I would commend you to seriously consider opportunities to invest in them and thus benefit from the special advantages that would become available.

17. Let me also dwell for a moment on Indian-Romanian bilateral relations, which have truly prospered in recent years. As open, democratic societies we have always possessed the potential of being natural allies and strategic partners. Now we can actually see this potential being transformed into reality. Through our joint efforts we have raised our partnership to a level where our ties have never been closer. Common interests and shared aspiration guide us as we seek to meet the true potential of our relations.

18. Our deepening engagement in practically every sector and the resultant transformation of our ties extends from the political and commercial to energy, power, agriculture, pharmaceuticals and heavy engineering. It is especially satisfying that the leaders of our two countries are now in very regular contact with each other. The almost continuous exchange of visits at the political and senior official levels has led to harmonization of our approaches to a whole range of issues. Our cooperation has intensified in traditional sectors, besides progressing ahead in a number of new areas.

19. Excellency, India offers a vast reservoir of untapped investment opportunities ranging from sectors as diverse as tourism and infrastructure, petrochemicals and aviation, mining and oil exploration. In fact in terms of potential, India is perhaps one of the last remaining countries with significant, large scale investment absorption capacity that also offers attractive returns to prospective investors.

20. The release earlier this year of India's new EXIM policy further cements the process of opening up of the Indian economy. The acknowledgement that our strategic interests are convergent and we have a mutual interest in the free flow of commerce-all these have opened up new vistas for trade, investment and bilateral cooperation.

21. I would like the business community in both our countries to strengthen this process of consolidating the natural flow of trade and economic interaction between India and Romania. I look forward to welcoming more Romanian business and Romanian investment into India and would like to assure that every possible assistance would be extended by my Ministry and other branches of the Government to make your move to India even more attractive and free of irritants.

22. I welcome your Excellency to our country and wish both the Joint Commission and Joint Business all success in their work.

Thank you.