“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”