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P r e s e n t e d b y : A s h w a t h P u t t u r
R e g n o : 1 0 3 3 0 1 0 0 7
European Integration and its
Implication on Trade between
Europe and India
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Project Timeline: FebruaryMay, 2012
Project Venue: University of Warsaw, Warsaw - Poland
Manipal University, Manipal - India
Faculty Guides in Poland: Dr. Jakub Zajczkowski,Aleksandra Jasklska
Student: Ashwath Puttur
Registration Number: 103301007
Batch: MESM 2010-2012
Faculty Guide in India: Prof.Chowdri Prasad
Date: June 16th, 2012
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An Introduction to European Integration
European Union is a viable community considered aiming to become United States of
Europe
Process of integration which has started in the year 1950 with six member states;
France, Germany, Italy, Netherlands, Belgium and Luxembourg
During the process, European Integration hardly considered to means of controlling
trade and free movement between countries
European integration is part of the global trend with a number of common policies
among participating countries for a better growth by removing barriers prevailing in
terms of trade
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India EU Free Trade Agreement- An approach
As per the statement of European Parliament, the trade is expected to increase 70.7
billion by 2011 and 160.6 billion by 2015
This FTA would expand the figures by EU exports to India $17.18 billion, while India
exports would increase by around $5 billion more
According to Free trade agreement, the EU-India are supposed to eliminate duties up to
90% on tariffs and other 10% will excluded or negotiated in trade
Catherine Ashton words ;
The recent times, relationship between European Union and India is in right place and there
is real opportunity to do something more than today by sharing, pooling and bringingtogether our knowledge and assets to operate in a right possible way to get more to offer to
India.Concentrate on the main aspects of trade creation and trade diversion, likely to
develop a deeper integration.
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Indian Trade Policy
The signing of a FTA between EU and India therefore implies a more rapid change in
tariffs for Indian than for the EU
But the current foreign trade policy is built around the main objectives of India is share of
global merchandise trade by earlier and using trade policy as an effective interest of
economic growth
The policy aims at bringing down transaction cost, removing controls and identifying a
hub in order to develop for manipulating, trade and services
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Trade balance
*EXPORTS & IMPORTS : (US $ Million)(PROVISIONAL)
FEBRUARY APRIL- FEBRUARYEXPORTS (including re-exports)2010-11 23608.36 220241.122011-12 24618.08 267409.89%Growth2011-12/ 2010-2011 4.28 21.42IMPORTS2010-11 32973.40 335502.152011-12 39781.68 434159.81%Growth2011-12/ 2010-2011 20.65 29.41TRADE BALANCE2010-11 -9365.04 -115261.032011-12 -15163.60 -166749.92
*http://www.economicinitiatives.com/NEWS/2012/2nd_April_2012.htm
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Over the last three decades, the average growth rate of Indian economy has improvedthrough economic performance varies between states and industrial sectors and GDP has
been doubled in last five years and consumer market has grown tremendously.
* Indian Economic Outlook 2011-12
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Policies regarding on Regulatory issues
Due transparency in government procurement contracts of state and central level
purchases in both the countries for the benefit of the people
To facilitate the implementation of range of reforms to improve the quality of services
from the point of European perspective
The issues for negotiation is the investment agreement could provide full transparency
and setting up a system of as single window information system for investment but
certain problems cannot dealt with FTA
Issue for negotiation is the application for modern custom procedures, facilitating inter-
state commerce, improving trade information will fosters transparency and
professionalism in trade
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However there are few controversies about IPR provisions and previous EU-India WTO
disputes appear to be settled but protection of traditional knowledge is also an issue for
both the parties with geographical indicators
A clause conferring that the both parties would have a competition law would seem easy
to agree but India might wish to see more on information exchange than competition
The next immediate proposed step is to know the existing situation of India to regulate
and make institutional arrangements and assure to its proposed benchmarks. The India
will incur costs for entering into a free trade agreement with EU and entitle the benefitstoo
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This table explains about the position of India and EU trade with main partners report
2010;
Source: EUROSTAT-TRADE -European Union :27 members
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Source: IMF-TRADE India -28 states
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Understanding India
At times, India has come across as a difficult partner for the west to develop a more
harmonious relationship with the Asian power with better understanding India and its
factors that bind the external policies
The European Union might be thinking India is simply part way along a path of
convergence towards to the norms and standards of the western world
The future of trade policy 2010-2015
"Trade is working for Europe's economic recovery by ensuring growth and jobs. Our
renewed trade strategy will open markets and connect Europe to the main sources and
regions of global growth. My aim is to ensure that European business gets a fair deal and
that our rights are respected so that all of us can enjoy the benefits of trade".
Karel De Gucht, Trade Commissioner
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How must the EU work with India?
As the EU aims to be upgrading its strategic relationship with emerging India
and to improve it, the bilateral dialogue must be enriched
The EU should discuss with India far more about, how the latter sees the new
global order and what role its wishes to play within it
As Partners in the new millennium system, the EU and India need to be
comprehend one another to become better collaborators in managing global
affairs and to enhance and enrich their bilateral relationship towards a real
strategic mode of partnership
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Political, Economic and Cultural dimensions towards India-EU Free Trade Agreement
Political and Economic
In further negotiation of economic cooperation, the EU and India are negotiating the
Broad Based Free Trade and Investment Agreement (BTIA), which would create one of
the largest Free trade areas in the world in terms of GDP and Population
The politics play an important role in negotiating the talks between two Emerging
countries in the world
Cultural
EU considers to behave logical towards India, but not due to some domestic issues
revolving around the talks that make India to think in different way
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Free Trade Agreement Negotiations -Perspectives
The idea of an FTA between India and the EU first arouse at a summit in 2005, when a
high level trade group was established to explore the potential of an agreement and it
opened the pave for negotiations
The deep integration with the economic impact of studies that mutually beneficial
between EU and India negotiations took place in 2007
The EU is still seeking better access to Indias financial and legal services sectors to
explore and make improvements in data protection especially with the pharmaceutical
firms
If it fails to reach the agreement on an FTA would broaden the negative trust between EU
and India and later become closer push to emerging powers with U.S. India may find it
harder to further liberalize its growing economy
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Concerns on Issues and areas for negotiations for the FreeTrade Agreement deal to be Success
Both the parties must decide the specific commodities consider for trade diversion and
include them in the agreement
The mutual recognition of conformity testing and certification standards for the
encouragement of intra-industry trade (IIT)
Improvement of information sharing and procedures with following of investment andgovernment procurement rules through transparency mechanism for the national
treatment of investors of EU and make sure that ,easily available to the public
Continuous improvement with regard to protection and enforcement of IPR regime in
India and competition policy
There is immediate action to make engagement with the trade unions and workers to
solve the issues revolving around and make sure that , having a mutual understanding
between them leads to a fair deal
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The Polish Perspective towards the EU-Indiarelations at the 21st century
The enlargement of European Union, the Poland is influenced in relation between India
for trade that enabled Warsaw to achieve the last strategic goal of its foreign policy
Indias international strategy will emphasize more on New Delhi as an importance of co-
operation between countries of north and south and also this is influenced by European
Union But at the outset of 21st century the India relation with the EU has implication on Poland
future as a new phase of relation with India, not only economic relation but also political
dimension
Poland has been seen in the 21st century as A GATE TO THE EUROPEAN UNION,
a link joining Asia with Western Europe
By this India is focusing on larger and developing countries like France, Germany, UK,
Spain, Poland rather EU as a whole.
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Poland trade- towards the enlargement of EuropeanUnion
Enlargement could also result in greater economies of scale , intra industry trade and
improved financial and banking arrangements serves as a gateway for goods and
services to EU, Central European Free Trade Area (CEFTA) and Common Independent
States markets
The enlargement in European Union could create trade enhancing affects and its impact
was on Indias exports to Poland on account of tariff induced uncompetitiveness had
negative affect on EU market
EU enlargement is a cause of concern for India, it could result in strengthening trade and
investment and sub-contract relationships within the EU to gain cost advantagerespectively
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Potential Benefits and costs of an EU-India FreeTrade Agreement
Benefits
The Biggest gain for the EU would include export of industrial and manufactured goods
to India -a 50% increase worth 5.1 billion Euros
Opening new markets leads to open to custom borders, co-operation of education, and
more employment oppournities in both sides
A strong global desire of protection for Intellectual Property Rights has been emphasized
foreign direct investment in India and most effective IPR regime in the country can
create jobs, provide taxable income to the Competition policy
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Costs
The coincide over the production structures between EU-India put forward their
consideration scope for trade diversion for India and in turn, it will increase its
imports from EU but at the expense of efficient suppliers
The policies and procedures in the areas like, trade facilitation, investment having
difference between the state and the central governmental levels
It is a considered to be major tool of trade policy between the countries also with the
others
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Conclusion
India is an Emerging power in the world economy and various researchers also called as
Incredible India or Responsible India as per the present economy. India and
European Union share democratic values and have converging strategic interest for the
economic co-operation or for the sustainable development of the economy
An Free Trade Agreement between the EU and India would have a positive impact onEuropean and Indian exports
Poland is seen as investment destination for the business point of view, helps to grow
healthy in all the sectors and might double the trade values in the coming years
Poland was one of the Indias closest friends and trading partner during the cold war and
subsequently has the low profile bilateral relations over the few decades
It is worth signing the ambitious BTIA at the Next EU-India summit would be highly
credited and also helps to raise the profile of Poland within both the EU and India
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Sooner the policy makers in New Delhi and Warsaw realise that the benefits could reap
out with the proposed FTA and also the expects visit of the Indian Prime Minster to
Poland , by 2013 , the first such visit for more than 33 years may be useful for the
feasibility of proposed partnership
It is better to have a Free Trade Agreement between EU-INDIA in the future becausewhich increases the standard of living and cut down the poverty rates to an extent as well
as boost the economy in all the sectors
More Trade leads to Investment, New businesses in both the countries, Good Educational
opportunities or exchange programs this can only happen when they signed the FTA
between two emerging countries.
Finally, it is important to highlight that the likely impact of an EU-India FTA will in turn
depend on the rounds in near future
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Thank You
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