The Hindu Business Line : Summit's hits and misses

THE SIXTH INDIA-European Union summit must be seen against the backdrop of the fifth meet held at The Hague last year, where the process of the "strategic partnership" was set in motion. Now, the New Delhi summit has fleshed out the process, with the "action plan" — mooted at The Hague — given a specific content. To that extent, the summit has been a success, and not the least because it has given the large contingent of European CEOs — who accompanied the British Premier, Mr Tony Blair, the current chief of the EU Council — a firsthand view of the Indian "economic resurgence".

Not surprisingly, the campaign against terrorism has taken the pride of place among the declarations adopted at the summit, the recent London bombings and the spate of violent incidents in India underscoring the point that both the developed and the developing worlds are equal prey to terrorists. While one hopes the resolve of Brussels and New Delhi in this sphere will produce some result, what is more certain is that India will gain much from its induction into the billion-dollar Galileo Satellite Navigation Programme, a framework agreement for Indian participation being signed at the summit. An accord on maritime transport and another on a joint initiative on "clean development and climate change" were also inked.

But, clearly, the economic aspects of the India-EU relationship should occupy the most important place, though not much of note happened at the summit. Admittedly, the two sides decided to set up a high-level trade group to explore ways to increase bilateral economic flows and investments, but it would have been far better if the focus was on implementation rather than exploration. The trade and investment interests of the two sides are well known, and it would have been more productive had concrete policy steps been taken to increase the flows in these two areas. After all, Foreign Direct Investments from the EU into India the past 14 years add up to around $7 billion, which is about a fifth of the total FDI flows into the country; India receives less than one per cent of the EU's foreign investments. Reportedly, the feeling among the visiting CEOs was that India would do well to open up further to foreign investments across sectors.

On multilateral trade issues, the summit drew a conspicuous blank, which is unfortunate as the EU is India's largest trading partner. Indeed, the issue is so important that even the Prime Minister, Dr Manmohan Singh, lent his voice to the demand that the EU lower its non-tariff barriers and allow easy access to Indian professionals. Significantly, no specific initiatives were announced by Brussels; on the contrary, the EU Trade Commissioner, perhaps as expected, asked New Delhi to introduce more "openness" in its economy if it really wanted to reap the benefits of the Doha Development Agenda. What this means is that Brussels is not prepared to concede any ground on trade issues — a point New Delhi had better bear in mind in all its initiatives to forge "closer" ties with a now-enlarged EU and the promise of a larger market.

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