In light of increasing interest in economic and trade relations between the 25-member European bloc and India, a conference “India EU Strategic Plan : Enhancing Trade and Investment” was organized by the European Indian Chamber of Commerce ( EICC) in co-operation with Commonwealth Business Council (CBC), Global Organization of People of Indian Origin (GOPIO) and Embassy of India in Brussels on 8-9 November 2005.

Nirj Deva, the Chairman of the EICC and a Member of the European Parliament (MEP) welcomed a large number of industrialists, businessmen, Members of European Parliament, diplomats and journalists at a dinner at the Sheraton hotel Tuesday, Nov. 8th. Highlighting the importance of India and the EU as premier business partners in a “safer world’’ Deva said, ‘’let this be a first step in a journey of many steps.’’ 

Ashok Sajjanhar, Charge d’Affaires of the Indian Embassy in Brussels referring to India’s economic growth said “ India has emerged as a significant economic power house with a growth rate of 7-8% .” Sighting 
India’s relative strengths in export, investment and mature capital markets, Sajjanhar noted India’s competitive edge over China, “ The Return on Assets (ROA) in India is higher than China. More than half of  the fortune 500 companies are present in India and half our population is less than 25 years old.’’ 

“India and the EU are natural allies and strategic partners, we must find a way to give a quantum jump to India EU relations,’’ stressed Sajjanhar who represented the Indian Ambassador currently in India. 

Lord Dr. Diljit S Rana spoke about the importance of trade and commerce in the economic development and how Chambers of Commerce such as the EICC could play a role in bridging the economic distance between 
Europe and India. He also stressed upon the need for creating awareness about the European Union in India and how Europe and India can join together to create wealth for the benefit of the population. Lrd Rana 
hoped that EICC will provide services to members engaged in trade, industry and commerce and promote discussion with India’s economic organizations based in the EU countries and vice-versa. 

Neena Gill, the President of the South Asian delegation for the European Parliament and the only Indian-born MEP, sighted the need to “further increase bilateral trade and economic cooperation between Indian and 
the EU.” Referring to a recent trip to Andhra Pradesh, Kerala and Maharashtra by an 11 member European Parliamentary delegation she observed “ India is a land of contrasts.” Underlying the spirit of optimism and 
enthusiasm is a degree of cynicism and red tape which obstructs the free flow of trade and investment within the country, observed Gill. 

Dr. Prem Sharma, Patron of the EICC said that Europe and India share common values and approaches to many of the challenges and concerns facing the world today and the extensive dialogue between India and 
the European Union on trade, development, cultural relations, economic cooperation and other matters is underpinned by a common understanding on a wide range of political issues., which provide a solid basis for their cooperation. He said that the European Parliament being an effective institution can play an important role in bringing the business and trade bodies of EU and India closer. He said that there is also a need for greater interaction between the European Parliamentary Friends of India and the government of India. 

Dr. Thomas Abraham, Chairman of the GOPIO International said that the Indian Diaspora and particularly the India business community can make effective contribution in strengthening the strategic partnership between EU and India. He stressed that GOPIO has in the past organized business summits which have proved very useful and hoped that the EICC will take lead in acting as a catalyst between EU and India in promoting better trade relations. Dr. Abraham also called upon the European Union and respective countries of Europe to give due recognition to the contributions of Indians in Europe and remedy the current imbalance of legal immigration of Indians to countries of Europe. “Similar to what Indian Americans have contributed to the economic prosperity of America, especially in the new technology areas, the same thing could be accomplished in Europe, provided the Europe opens up its door for new talents.,” Abraham added. 

Sunil Prasad, President of the GOPIO-Belgium and Secretary General of the EICC concluded the inaugural event with a heartfelt address to increase EU India co-operation. “There are tremendous opportunities that lie on both sides to promote trade and investment” he said referring to the business conference that was scheduled to take place at the European Parliament on 9 November. He stressed the EU need to tap into India to remain a major global economic power and mentioned that while India does have its own institutional weaknesses it offers large potential for investment in the sectors of IT, Pharmaceuticals and Bio Technology. 

The business session of the day-long conference took place at the European Parliament on Wednesday, November 9th. Participants at the business session of the conference unanimously agreed that although EU-India business relations witnessed considerable progress in recent years, the potential for further expansion was much bigger. To make this potential become a reality, they said, India would first have to concentrate on in infrastructure sector - like transport, power and telecommunication - a key weakness of India as compared to many of its competitors. 

MEP Deva sparked the debate raising the issue of outsourcing and the fears by citizens of some EU member states about job security. He said the outsourcing phenomenon sprung more from the lethargy in innovation in 
the EU. “Jobs are not being created because we have stopped innovating. In Europe we are regulating ourselves out of existence,” he concluded referring to the inherent fear of job losses felt by EU member states.

Sanjay Dalmia, Chairman of the Dalmia group of companies, reminded the audience about general misconceptions over outsourcing. “If India and China are rising up today, it’s because of their entrepreneurial skills and their ability to innovate,” he said. 

Dr. Charles Tannock, a British MEP, told that although “EU-India trade is increasing at an astonishing rate of 20 percent per annum the potential is still greater”. He said some 400 Indian companies were present in the 
UK alone, out of which 332 from the IT sector. Dr. Tannock is also the Chairman of Friends of India at the European Parliament and appealed to all NRIs and PIOs to strengthen this group.

Colette Mathur, Director, World Economic Forum (Switzerland) highlighted the similarities between India and Europe. “India is more comparable to Europe than any other single country in the world due to is to its cultural diversity and shared values of democracy, rule of law and fundamental freedoms,” she said.

Dr. Ajit Shetty, CEO of Janssen Pharmaceutica, Belgium’s largest pharmaceutical company voiced his concerns about the “lack of respect by India of intellectual property rights and patent laws which obstructs big pharmaceutical companies from entering India.” 

Another MEP, Erika Mann from Germany, said “EU citizens shouldn't be afraid of emerging global powers such as India and China” and should instead “co-operate with each other in addressing common challenges of 
today's world in an internationalized context” such as trade, terrorism, or development. 

Haleh Bridi, Director of the World Bank, referred to the disincentives that deter foreign investment into the country. An astonishingly glaring statistic highlighted by Bridi was the level of FDI in India which is only $5bn compared to $60bn in China, its rival which lacks adequate capital markets, a negligible banking system and judicial system.

Dr. Marc Van Montagu spoke about the huge opportunity that lie for India in the bio-tech sector and how both Europe and India and join together and take advantage. 

Others who spoke were Dr. Mohan Kaul, Douglas Gregory, Dr. Avtar Lit, Geoffrey H Lipman, Chan Chowdhry, Miodrag Rankovic, Thierry Moulonguet, Ravi K Mehrotra, R. Veeramani, Ravi Shankar, Rutger Koopmans, Dr Jean-Joseph BOILLOT, Francisco De Paula Coelho and Surbhi Sharma.

Industrialists presented at the conference were rather pessimistic on India’s potential of attracting greater investment and warned that while India is on the right path, high expectations and the hype surrounding the India growth story could cause complacency amongst policy makers.

Attended by over 200 participants the conference session were chaired by MEPs Deva and Jacek Emil Saryuz Wilski and Lord Rana. During the discussion, it was observed that three impediments that are affecting foreign investment (FI) to the country and better EU-India trade and commerce relations are: relatively poor infrastructure, lack of proper implementation of policies and hindrances in tax collection methods. 

On infrastructure front, it was suggested that India needs to improve quality of power and road conditions. Because of bad conditions of road, many companies are very uncomfortable to open companies in India. Despite claims by the Indian government of opening up one-window clearance outlets, the policies were not functioning as per desired levels. There was need for policy orientation and implementation of policies like single window system and others. 

The major impediments to Barriers to entry and establishment, FDI in the region are found to be: particularly in the tertiary sector (e.g. financial services, telecommunications, media, transport) Restrictions on foreign  ownership and control, taking the form of maximum foreign equity holdings and Operational restrictions on foreign mandatory partnering with domestic firms firms (e.g. local content, technology transfer and export requirements) 

Authorization and reporting requirements (notifications, approvals, licenses) 
Discriminatory treatment of foreign investors in establishment, ownership and control. 

Governments need to pay greater attention to the interaction between trade, investment and technology policies.

Technology-related policies need to be linked to both FDI and trade policies. 
Trade and competition policy must support competitive and outward-looking policies in order to support technological upgrading, deepen local linkages with foreign firms and encourage a longer-term, dynamic integration of affiliates into the local economy. 

Government policies on FDI need to address the problems of information or co-ordination failures in the investment process and the inefficiencies which arise when the private interests of investors differ from the economic interests of host countries.