"It gives me great pleasure to be here in your midst, where businessmen, leaders and captains of industry and trade from the European Union sit together with the captains of industry of our country. I have always believed with Lord Keynes that, "in the final analysis businessmen are the custodians of the possibility of survival of human civilization and therefore, if business leaders think right, I think our societies and our polities can look to the future with hope and confidence. Therefore, I greatly welcome this opportunity to interact with such an outstanding group of leaders of business and industry. Prime Minister Blair has already mentioned that we had a very fruitful meeting with him and the President and the members of the European Commission and tomorrow, we will have a bilateral meeting where we will discuss the further development of our relations with the United Kingdom.

Under the Presidentship of Prime Minister Blair, we have made a very good progress in our strategic partnership. I am grateful to you, Prime Minister for the leadership you have given to the process of widening and deepening of our relationship with the European Union.

We live in a world of constant change and the success belongs to those who are adept at mastering processes of change. In our own times, few leaders of countries have shown that much expertise in effective management of change processes than Prime Minister Tony Blair. Therefore, what he has told you this afternoon, I think I heartily agree. Those are the ways to manage processes of change and the moral of what he has been saying is similar to what I have been saying to our own people - do not be too fearful of change. Learn to live with change, though of course governments have the responsibility to smoothen the processes of change, smoothen the transitional pain that may at some times accompany the processes of change. So what Prime Minister Blair has told you this evening, I heartily support.

It's for me and for my colleagues a great delight that we have this opportunity to interact with leaders of European and Indian business. I sincerely believe that in the modern world, the relationship between Governments is increasingly mediated through and influenced by the relationship between the civil society and the business community. It is on the foundation of people-to-people and business-to-business relations that we in Government try to build State-to-State relations. That is at least true of most democracies. Hence, this business summit is, in many ways, as important as our own heads of Government meetings. I welcome the idea of the India-EU Business Summit becoming an integral part of the India-EU Summit.

India and the EU have deep and abiding ties comprising political, cultural, social and economic relations. We are the largest democracies of the world, we cherish the freedoms that democracy offers. We share a common belief in pluralism, consultations and consensus, in the Rule of Law and in peace. For, in peace and in stability, we have the foundations necessary for development and economic growth within the framework of an open society and an open economy.

The terrorist attacks on July 7 this year in London are an unfortunate affirmation of our view that terrorism, by whatever name, can have no place in a civilized society. I am emphasising this in this Business Summit because one of the aims of terrorism is to cause economic instability all round. I hope that, as India and EU join hands today to strengthen our economic ties, one aspect of those ties must be to ensure peace in our lands. We need each other's strong support in that endeavour.

We meet here today at a time when the Indian economy is once again on an upward growth path. For two years in a row, we have had upwards of 7 per cent growth in our national income. This year, we expect to repeat that performance. I am convinced that we will sustain this rate of growth, perhaps even improve upon it, in the next few years. This has the potential of transforming our economy in many ways.

It is now possible, as never before, for us to visualise an India without poverty, without disease and without scourge of extreme deprivation. There is an air of optimism and, as a believer in the ideas of Lord Keynes, I am convinced that 'positive expectations have a way of yielding positive outcomes'.

The process of economic reforms initiated by us in the early 90's has yielded rich dividends in many ways. We are committed to pursuing these reforms in a manner that the benefits percolate to all sections of our society, especially our rural poor. I have often said that we must walk on two legs - pursuing greater efficiency and simultaneously pursuing greater equity in the working of the economy. I do believe that if the fruits of higher economic growth are better shared, this in itself will stimulate further growth. We see the EU as a natural partner in our economic development. For centuries, long before the colonial era began, Indians and Europeans have been engaged in commerce. India has had civilisational and commercial links with different nationalities within Europe. We must build on those links by renewing the economic, social and cultural basis of our relationship. I am afraid we are not doing enough on that count. The youth of today in both our continental societies are not as familiar with each other as they are with other nations we deal with. For my generation, Europe was the natural destination for students, scholars, travellers and artists. I believe this is no longer the case. Perhaps, this is understandable, as we in India reach out to new friends in new continents and re-discover our ancient links with other countries of Asia. But, for this very reason, we must re-invest in renewing our friendship with the people of Europe. It is on the basis of this renewed people-to-people relationship that we can forge stronger business-to-business relations and affirm our new Strategic Partnership, that we entered into at the last Summit in The Hague.

We have at today's Summit laid out a road map for further cooperation, and along with the EU Presidency, I am happy to announce the adoption of a Joint Action Plan, which covers not just political aspects of our collaboration, but, most importantly, economic cooperation, that Governments can at best create an enabling environment, if opportunities that are on the horizon have to be seized we need businessmen and businessmen with the right attitude. Therefore, the mindset of the businessmen in Europe and in India, are going to be the crucial determinant of what actually takes place, when it comes to implementing the Joint Action Plan.

The most significant aspect of that Plan, in the context of our economic cooperation and trade, is the decision to set up a High Level Trade Group, where senior officials on both sides will meet over the next few months, and explore ways and means to deepen and widen our bilateral trade and investment relationship, including the possible launch of negotiations for a broad-based trade and investment agreement. We do hope this results in a more equitable and dynamic trade regime.

I believe there is a perception in Indian trade and industry circles that the European market is becoming increasingly difficult to penetrate. As tariff barriers disintegrate, our industry complains that non-tariff barriers suddenly come up. We need to address any such issues that exist, so that our trade with European Union can rise from less than 2% of EU trade to a more healthy level. India is one of the largest producers of agricultural commodities - fruits, vegetables, poultry and meat products, the famous 'Basmati' rice and the equally famous Darjeeling tea - and we have comparative advantage in this sector, apart from in the more modern sectors that Shri Kanwar mentioned. But many of these are also products, which find some form of discrimination and trade protection, or the other, which needs positive resolution by the EU. These are export products, which help sustain our small farmers.

Other serious issues affecting Indian exports also cause concern. One such is an imminent EC Directive on traditional and herbal medicines that would affect access for Ayurveda products to the EU market. Ayurveda is a recognised, centuries old system of medicine in our country, with its own pharmacopoeia and is in use in many European homes. This directive, our people fear, has the effect of being an insurmountable non-tariff barriers in respect of Ayurveda products. I sincerely hope that our concerns will be noted and taken on board when the High-level Trade Group meets for its deliberations.

Increased market access to Indian products and services in the EU market would create healthy conditions for placing our two-way trade on an even keel. It is important, therefore, that India and EU forge newer strategies for strengthening the existing economic bonds. We would welcome measures that could be pursued to mutual advantage and to facilitate enhancement of bilateral trade. I am, therefore, very happy that we have decided today to set up a Joint Working Group on SPS/TBT issues. This one step may, more than any other, lead to increased and enhanced trade. I urge our Indian business organizations to communicate more effectively the message that India is open to free trade and investment.

I am convinced our destiny and our salvation lies in closer involvement with the evolving global economy. As Prime Minister Tony Blair has said, 'globalization has come to stay'. We have to take full advantage of the opportunities that our now on the horizon and simultaneously taking care to take note of the risks that are involved in the processes of globalisation and working out concerted strategies to minimise those risks. Our Government is committed to lower tariffs and to increasing trade and capital flows into India. We are committed to ensuring a transparent investment regime that does not discriminate against foreign investors. I am concerned by the fact that EU's share in India's external trade and investment flows has come down, with other newly industrializing countries edging Europe out. I urge the representatives of European business present here and the representatives of Indian business to take note of this fact and work together with this even-mindedness to reverse this trend by re-discovering the new India that we are in the process of creating. A brand conscious and yet price sensitive market in search of new products and new technologies is waiting to be tapped. I sincerely hope you will not miss this bus!

Our Government is placing special emphasis on infrastructure development - both urban and rural infrastructure. Investments in the areas of energy, power, roads, railways, airports and ports are needed in massive amounts. I believe we have the capacity to absorb 10 to 15 billion dollars of Foreign Direct Investment in these sectors in the next decade.

Our wealth of human capital is recognised the world over. Prime Minister Blair reminded us of the power of ideas and the power of knowledge in fuelling economic growth in the future. We are well-placed to be a part of the evolving knowledge economy in the world. Our centres of higher education and learning have created, fortunately, a vast reservoir of world-class skilled and trained professionals. And over half our population is below the age of 25 years. As the demographic profile of Europe changes, the gap between the availability of skilled work force and the numbers required to maintain current productivity and efficiency levels would increase. The European Union could clearly benefit by drawing upon the services of India's young workers and professionals, though let me say that we are not in the business of illegal migrants from our country to any part of the world. India, in turn, would no doubt benefit from a liberal and easy regime allowing the free movement of natural persons, particularly our professionals. What we seek is a win-win relationship with the European Union.

An opportunity and a challenge have emerged for Indian industry with the enlargement of the European Union. We have always recognised the great potential for good that underlaid the growth of the European movement. We were one of the few developing countries who recognised as early as in early 1960s, the potential offered by the enlargement of the European community. A Europe, which is growing, a Europe which is not cohesive, the Europe which is outward-oriented is in the interest of the world. It is in the larger interest in the more equitable management of increased global inter-dependence of the nations. It is up to business and industry to seize this new opportunities that are available now in Europe. Governments can at best provide an enabling environment and play a facilitating role. It is the animal spirits of individual enterprise that must drive the relationship forward. I commit our Government to do everything within power to rekindle the animal spirits of Indian business community.

At the Government level, our Development Cooperation is expected to get a major boost in education - the Sarva Shiksha Abhiyan - and in rural health - the National Rural Health Mission. The reconstituted Joint Working Group on Agriculture and a new one - on Food Processing, which have emerged as important components of our increased economic cooperation, will, I believe, go a long way in promoting mutually beneficial economic activity and give a fillip to our agricultural sector. I am glad, that, at the same time, the Action Plan also proposes enhanced dialogue in modern, hi-tech frontier areas of IT, telecom, S&T, biotechnology, space and nuclear energy. The agreement for the Avoidance of Double Taxation, an agreement for the Promotion and Protection of Investment, the agreement on Science and Technology, our Vision Statement on IT, the agreement on Customs Matters are some of the instruments we have in place to take our relationship forward.

India and EU have remained committed to a rule-based multilateral trading regime. We played a key role in the formulation and adoption of the Framework Agreement at Geneva. We hope that there will be genuine progress in the weeks between now and the Hong Kong Ministerial meeting. Our developmental imperatives require accommodation of our concerns by the developed countries. We hope that the negotiations will lead to substantial market access - both on agricultural and non-agricultural products for the developing world, as well as in the key areas of services. We also hope to achieve a fairer and more equitable world trading system. Towards this end, I hope that we can continue to work constructively with each other until the satisfactory conclusion of the Doha Round.

I have said this many times before the poor countries of the world have a vested interest in strengthening the rule-based non-discriminatory multi-lateral trading system. So we look forward to working with our colleagues in the European Union to bring the Doha Round to a successful conclusion.

I draw your attention to the demands of a globalising world, which require that we synergise our strengths and complementarities to give a new dimension to our partnership and secure greater space in the world trading system. But trade is not an end in itself. We view trade as an incremental economic activity, the means to achieve economic growth necessary to meet our development objectives, with equity, fairness and honesty of purpose.

I am therefore, very happy that the India-EU Business Summit has evolved as an effective forum for dialogue and exchange of views. I do believe that you can play a powerful role in strengthening our strategic partnership. I commend you for your endeavours."