India, EU trade charges on lower market access

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New Delhi, Sept 7: India and the European Union moved no closer to resolving the contentious issue of market access even as they inked a joint action plan to enhance trade and investment and cooperation in energy security, information technology and bio-technology.

While the EU kept pointing out that India had not liberalised its economy enough, the Indian side went all out to list the non-tariff barriers imposed by EU against its exports.

Addressing the special plenary session of the sixth India-EU business summit organised by CII, Ficci and the commerce ministry, British Prime Minister Tony Blair made a strong case for greater opening up of the Indian economy.

“The future clearly belongs to opening up the economies. Globalisation is not a matter of debate, it is a reality. The issue for policy makers is how to manage its consequences,” he said.

Mr Blair, who is also president of the council of European Union, said that although globalisation frightened people as it led to insecurity, it was always better to be on the side of opening up than closing down.

While the EU made it clear that its main agenda was to convince India to lower its tariff barriers and liberalise its investment policy, India had its own axe to grind. Prime Minister Manmohan Singh pointed out to his European counterpart that there was a perception in Indian trade and industry circles that the European market was becoming increasingly difficult to penetrate.

“As tariff barriers disintegrate, non-tariff barriers suddenly come up,” he said. There was a need to address all such issues so that India’s trade with the EU could rise from less than 2% of EU’s total trade to a more healthy level, Dr Singh added.

The Prime Minister pointed out that although India had comparative advantage in the production of a number of agricultural commodities, many of them find some form of discrimination and trade protection in the EU market.

He welcomed the setting up of the joint working group on SPS/TBT (sanitary & phytosanitary and technical barriers to trade), which could look into the problem.

Despite the differences, the two leaders expressed their commitment to working together to ensure enhanced bilateral economic and political cooperation. Mr Blair said that the talks between the EU and India confirmed the massive potential that existed in improving relations. “We have to ensure that words are matched by action,” he said.