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Europe and India have
been trading partners for centuries. Historically, Indian connections
were crucial for European trade with China. Linguistically, culturally
and socially the Europeans are more at ease in India. India is the
world’s largest democratic nation and the EU/USA political systems share
the same principles of parliamentary democracy. India has 40 languages,
offers freedom of worship to all major religions of the world, a free
press, an independent judiciary and a non-political army. With 135m
Muslims as its largest minority, India continues to be a stable secular
state although recent religious violence in Gujarat did tarnish India’s
international reputation.
In 1962, India was one of
the first countries to establish its embassy in Brussels to deal
directly with the European Community. Unfortunately, India did not
benefit from this early association as Indian economic policy did not
encourage foreign investment and ownership in numerous key sectors.
Indian politicians were obsessed with developing an internal market
based on local manufacture and import substitution. Food
self-sufficiency was a priority as was rural employment. India did
succeed in taking a political lead of the non-aligned nations to
collaborate effectively with the EU in the UN, IMF and WTO. India has
been a strategic partner of the EU in developing regional trade links in
Asia through ASEAN and it has helped EU Member States in promoting
goodwill and diplomacy in the Middle East.
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Only 1.3% of EU exports
go to India whilst 25% of India’s exports are destined for the EU.
Mutual trade between the EU and India can be substantially higher if
there is a fair trade agreement that reduces barriers in mutual trade of
agricultural products, pharmaceuticals, chemicals, textiles, leather and
semi-finished industrial goods.
India can realise the
full value of its human resource potential if it privatises its state
owned enterprises and dismantles its extensive network of bureaucracy.
Indian bureaucracy cripples indigenous as well as foreign enterprises
and diminishes its relative advantage to China. Its bureaucracy devalues
labour, wastes financial resources, breeds corruption and inflates costs
of goods and services. India must privatise state enterprises, transform
its bureaucracy and adopt electronic means to communicate with the
public and offer financial incentives to the private sector to adopt the
latest information technology. It must modernise its infrastructure and
invite foreign investors to own and manage its air, rail and road
networks. It must encourage telecommunication companies to own and
manage assets across all its states. These reforms would create a huge
demand for labour, goods and services. They would enable India’s huge
pool of human resource to realise their full potential.
In 1992, India introduced
economic reforms that led to GDP growth of 6.5% per annum for the period
1992-2001. Further reforms introduced by the Vajpayee Government in 1999
substantially improved India’s trade with the EU. India’s new
Congress-led government has opened its economy to direct foreign
investment in local manufacture of a wide range of products and EU
manufacturers need to explore the possibility of jointly owned projects
in telecommunication, power generation, construction and
pharmaceuticals. The current five-year plan for 2002-2007 is based on
annual economic growth at an average of 8%. A large number of major
British companies have set up cost efficient call centres in India to
provide a wide range of services.
The Indian Chamber of
Industry & Commerce, like the American Chamber of Commerce, should
establish a link with the European Parliament and start a regular
dialogue in Brussels to offer an opportunity for Indian businessmen to
meet European Parliamentarians, European industrialists and European
Commission officials to identify areas of possible co-operation and
joint partnerships. Such dialogue will enhance substantially mutual
trade between the EU and India.
India needs to lobby the
EU for establishing a Joint parliamentary Assembly with the European
Parliament. This will enable direct exchange between parliamentarians in
both countries to explore issues relating to trade, industry, research
and poverty eradication. |
