/REPEAT/TRADE: India, EU Make Slow But Steady Progress

By Ranjit Devraj Reprint | | Print |

Ranjit Devraj

NEW DELHI, Nov 24 2001 (IPS) - India and the European Union wound up their second summit meeting Friday, with the satisfaction that they would make steady if slow progress on the vexed issue of bilateral trade.

They could announce a process to begin dismantling barriers and promoting sector specific investment so that in five years’ time, trade would have doubled from 25 to 50 billion euros (43.9 billion U.S. dollars).

A joint Indo-EU vision statement issued Friday by Indian Prime Minister Atal Bihari Vajpayee, European Commission head Romano Prodi, Belgian Prime Minister and holder of the rotating European presidency Guy Verhofstadt, emphasised increased cooperation in information technology, where this country has known strengths.

Vajpayee, who had earlier complained of visa restrictions for India software professionals, said he could see a “long-term relationship in information and communication technologies in which India and the EU have many complementarities”.

“That was in keeping with EU Trade Commissioner Pascal Lamy’s prediction when the summit began Thursday that the summit would be a combination of “pushing out the negatives and pulling in the positives,” he said.

Although the EU is India’s largest trading partner, India ranks a low 18th among Europe’s trading partners and accounts for barely 1.3 percent of total EU imports, a point emphasised by Indian Minister for Commerce Murasoli Maran.

Lamy said that India did not merit special tariff preferences but that the EU was prepared to look at new possibilities opened up under the Generalised System of Preferences (GSP) currently being worked out.

In Lamy’s view, red tape and poor infrastructure stood in the way of increased European investment in this country. India’s high import tariffs in items like textiles were another of the “negatives” on the list of the French former banker.

The large contingent of European businessmen in the delegation were more sanguine about India’s potential, at least in the future.

Gerhard Jooss, a top executive with the German manufacturing giant Thyssen-Krupp, said he was impressed by India’s “growing market, abundant availability of natural resources for manufacturing, reliable business community and high levels of intellectual manpower and engineering expertise”.

Said Prodi: “One of the European Commission’s main concerns is that India must reduce the overall number of rules. This is because we want to see more European investment and more bilateral trade.”

Inevitably, there were complaints against the recent grant of unilateral concessions and preferential treatment to Pakistan, India’s main rival on the sub-continent, given that country’s strategic role in the west’s efforts against Afghanistan after the Sep. 11 attacks in the United States.

Prodi explained that away as help for a country that was trying to combat drug trafficking and undergoing politically sensitive times.

The political side of the Friday summit appeared to weigh more with India, particularly a joint indictment of states which harboured, financed or trained terrorists.

The two sides said at the end of their summit meeting that states must stop giving moral, diplomatic or material support to terrorists who should not be allowed to use them as bases for acts of terror in another country.

“There can be no religious, ethnic, ideological or any other justification of terrorism,” the statement said. “All states have a responsibility to refrain from providing moral, material or diplomatic support to acts of terrorism and prevent the use of their territory for sponsoring terrorist acts against other states.”

Inescapably, the reference was to Pakistan, which India has long accused of promoting ‘jihadism’ in the territory of Kashmir, which is disputed by the two countries. Pakistan, for its part, says it is only supporting freedom fighters, morally and diplomatically.