PM'S ADDRESS AT THE SPECIAL PLENARY SESSION OF 4TH INDIA-EU BUSINESS
SUMMIT
The Prime Minister,
Shri Atal Bihari Vajpayee has said that the post Cold war scenario
has created a conductive atmosphere for a stronger India-EU partnership.
Addressing the special Plenary Session of 4th India-EU
Business Summit here today, the Prime Minister stressed the fact
that unless the developmental concerns of the poorer countries
of the world are taken into account, popular support for economic
liberalisation will collapse in the developing countries, which
could have disastrous consequences for future discussions on the
international trading regime. Shri Vajpayee pinpointed technology
as an area, which should figure more in the India-Europe discourse.
The Prime Minister also advocated the need to look at a range
of issues from anti-dumping measures to manufacturing standards
with a sense of proportion.
Prof. Romano Prodi,
President, European Commission, Shri Yashwant Sinha, Union Minister
for External Affairs, Dr. A.C. Muthiah, President, Federation
of Indian Chambers of Commerce and Industry and Shri Anand Mahindra,
president, Confederation of Indian Industry were among the distinguished
guests present on the occasion.
The following
is the text of the Prime Minister’s speech on the occasion:
"I am happy
that there is now an established tradition of annual India-EU
Business Summits. The Summit provides a unique opportunity for
interaction between Government and Industry on both sides. It
is a forum for free and frank exchanges of views on the issues,
problems and opportunities in the India-EU economic relationship.
I understand there have been some valuable bilateral initiatives
by Indian and EU business to address impediments to India-EU economic
cooperation in priority sectors.
I do not need
to emphasise the importance that India attaches to trade and economic
cooperation with the European Union. It is our largest trading
partner, accounting for nearly a quarter of India’s total foreign
trade. It is also our largest investment partner, an important
source of technology in critical sectors and a major destination
for our service providers.
There is of course
a strong asymmetry, since India’s share in EU’s global trade is
under 2 per cent. This is a mismatch, which could be corrected
by a wider consciousness of the possibilities and a better understanding
of the larger picture of the India-EU partnership. The realization
has still to take hold that, with its rapidly growing economy,
skilled human resources, expanding market, and widening industrial
and technological base, India can be a strong economic partner
of the European Union.
The post Cold
War global scenario has created a conducive atmosphere for a stronger
India-EU partnership. We do not have any fundamental political
disagreements, which could impede the dynamic growth of our economic
cooperation. On the other hand, there is much that unites us,
and a firm basis to construct a strong edifice of a long term,
mutual reinforcing economic relationship.
India and Europe
are alike in many ways. Most important, both are well-functioning,
committed and firmly-rooted democracies. Europe is a mosaic of
sovereign States, which – despite past differences and conflicts
– sees its long-term future as a more unified entity. India is
also a continent-sized country, which illustrates a unique unity
in diversity, with its states playing an increasing economic role
in our interaction with the rest of the world.
Today’s Europe
is creating new waves in world affairs. The increasing weight
and voice of the EU, its steady expansion and consolidation, its
strengthening common currency, its new initiatives to integrate
its scientific and technological capabilities – all these trends
compel attention and analysis. In the post-Cold War era, India
too has emerged stronger and more self-confident, with the conviction
that we can have an expanding role in world affairs in the coming
decades. The question we need to ask ourselves is whether India
and Europe can create a more dynamic partnership, mutually reinforcing
our aspirations.
New perspectives
need to wipe away the cobwebs of old approaches. Though India
is still very much a developing country, we have put behind us
the phase when developmental assistance was at the core of our
transactions with the developed world. We are ready for a transition
to more mature partnerships.
The India-EU
interaction in trade requires some introspection and analysis,
if we are to double the somewhat modest present level of 25 billion
Euros in the next 5 years. Business and Industry on both sides
have made some recommendations. We need to look carefully at the
unfortunate reality that non-tariff barriers are gradually rising,
even as tariffs are falling in response to globalisation. A range
of issues from anti-dumping measures to manufacturing standards
need to be looked at with a sense of proportion. In India, we
have been careful to ensure that our liberalization measures are
non-directional. We do not increase tariffs or raise barriers
to target any region or group of countries.
In this context,
one needs to view in perspective the recent debates, in Europe
and elsewhere, on the impact of business process outsourcing.
The emotive arguments about the migration of jobs to countries
like India have missed two basic points.
The first is
that this outsourcing is increasing the competitiveness and global
reach of European and American companies. The resultant boost
to the balance sheets and increased dividend payouts are very
much in these countries. The increased profits are also ploughed
back into these economies.
The second point
relates to the barriers to free movement of persons. The demographic
profile of Europe and America necessarily means that these countries
will need the induction of a younger work force from outside in
the coming decades. If there is a more liberal regime of free
movement of businessmen and professionals between India and Europe,
this demand can be met within your countries. In the absence of
such a liberal regime, outsourcing is inevitable. If people cannot
go to where the business is, business will eventually come to
where the people are.
Technology is
an area, which should figure much more in the India-Europe discourse.
Indian expertise in areas of information software technology is
now reasonably well known. We hope to replicate our software revolution
in biotechnology and other areas. This will be driven by our reservoir
of millions of scientists, engineers, technicians and managers
produced by our Institutes of Technology and Management. In fact
our IIT’s and IIM’s have today become branded products, with international
recognition and global demand. Yet, it is a remarkable statistic
that though nearly 200 of the Fortune - 500 companies extensively
use India as a Research and Development base, very few of these
are from Europe.
One of the technology
areas with outstanding prospects for close India-Europe collaboration
is the Galileo Satellite Navigation Project that Europe is embarking
on. In this multi-billion Euro project, exploring new frontiers
of technology, India’s expertise in cost-effective space technologies
can bring both technical value and price-competitiveness. We therefore
seek to participate, not as a mere customer, but as an equal partner.
We welcome investments
from the European Union to India. We believe that our infrastructure
sector should be a particular area of interest to EU business.
Our National Highway Development project, to upgrade or build
over 15,000 kilometers of roads linking our major metropolitan
centres and rural regions is already well under way. We are soon
launching a major new initiative – "Sagarmala" – which
aims to build and upgrade a necklace of modern ports, supporting
international and coastal shipping all along our peninsular coastline.
This 25 billion dollar project should present attractive opportunities
for European business.
Our dialogues
on investment flows should now take into account the fact that
Indian industry is also looking at investment destinations outside
India.
In consideration
of the larger picture in India-Europe relations, I would like
to make a point about the direction in which the WTO is heading.
I think we should draw the right conclusions from the outcome
of the Cancun Ministerial meeting. We have to recognize that unless
the developmental concerns of the poorer countries of the world
are taken into account, popular support for economic liberalization
will collapse in the developing countries. This could have disastrous
consequences for our future discussions on the international trading
regime.
The WTO is like
a chariot pulled by many horses. Unless each horse pulls at the
same pace and in the same direction as the others, the chariot
will eventually collapse. It is important not to upset the carefully
balanced agenda of interests that resulted from hard fought negotiations
and compromises at Doha. We can move forward successfully only
at a pace with which all parties are comfortable. This has been
the cardinal principle that has guided the EU in its integration.
It is a principle that we in India follow in the coalition that
I lead, and in the measured pace of our economic reforms. This
logic that we have brought into our internal processes also needs
to be applied to our external environment. To take one fundamental
example, agriculture provides the core livelihood of millions
of people from a huge number of developing countries. The decisions
we take in the WTO on agriculture will need to respond to this
basic fact, even while they protect the interests of farmers elsewhere.
India and Europe
have to bring the consciousness of this larger picture into their
mutual interaction and in their engagement with the rest of the
world. With the intimate interlinkage of politics and economics
in today’s globalised world, business and industry share the responsibility
with us politicians for propagating a cooperative culture, which
reconciles the profit motive with the developmental imperative.
In the long run, this is the formula for the most durable economic
partnership.
Thank you".
