Continuing the thrust
on improving and reenergizing India’s foreign relations, Narendra Modi will
embark on his Europe and Canada tour in April. This visit will include France,
Germany and Canada. This is in line with “link west” policy of government of
India. Narendra Modi will arrive in
France on April 9 and will stay there for two days before going to Germany on
April 12. From there, he will proceed to Canada. The Prime Minister was also
scheduled visit Brussels, The seat of European parliament but the plan was
cancelled after the European Union failed to respond to India's proposal for
setting a date for India-EU summit in time. European Union is India’s second
largest trading partner however Europe's contribution to India's overall
global trade has been shrinking even while the Indian economy grows. Here
is an analysis of present state of affairs between India and EU and why this
visit was needed.
Preface
Narendra Modi has been as the man who gets the things done.
Since assuming the responsibility of transforming India, he has been seeking
avenues within and outside of India. He has accelerated the Indian growth which
has invited very encouraging remarks from world leaders including Barak Obama
and most recently IMF Chief Christine Lagarde who was full of praise for our
sound policy decisions. India's growing economy presents enormous opportunities
for the world, European Union in particular. The India-European Union relations
have been cordial for most part except in the recent times. EU adopted a
resolution seeking return of Italian marines to Italy. It was not received well
in India. Subsequently Indian leaders refused to meet a European delegation as
they see delaying of India-EU meet as a snub. Furthermore, Brussels the seat of
EU was dropped from Modi’s Europe itinerary.
But, many smaller
European countries have expressed their unhappiness over dropping of Brussels
from Modi’s travel itinerary as they see it as a lost opportunity for providing
the much-needed boost to India-EU ties, which were witnessing a slowdown after
their negotiations for an economic pact showed no progress due to differences
on various issues.
It is a visit that can usher a new phase in India’s relations with the two giant economies of Europe. In preparation for the visit the foreign secretary has also visited Europe.
Narendra
Modi Itinerary in France and Canada
Prime Minister Modi will arrive in France on April 9 and will remain there until April 11. While in France, he will interact with country's political leadership that includes a meeting with President Francois Hollande.
In Germany, PM Modi is
expected to inaugurate the Hannover Messe 2015 fair in which India is a partner
country. He will also meet German Chancellor Angela Merkel on April 12. Germany is the eighth largest foreign direct
investor in India. German FDI
in India during the period 1991-2014 was valued at $7.57 billion. It is
certainly below the potential of the relationship.
The Prime Minister will
be in Canada from April 14 to 16, making stops in Toronto, Ottawa and
Vancouver. Canada is home to over a million people of Indian origin mostly
settled in greater Toronto and Vancouver areas. Commenting on India-Canada
relations, the Canadian Prime Minister Stephen Harper said, “Canada and India
enjoy a close friendship based on shared values of democracy, pluralism and a
mutual interest in expanding
trade.
On
Agenda with France and Germany
Ø With France our bilateral relationship is based
on space, defence and strategic ties.
India is seeking closure to 23-billion $ Dassault Rafale fighter deal and an early works agreement with Areva on the Jaitapur nuclear power project in return for critical “Make in India” defence technologies and a joint venture for making large forgings for civilian nuclear reactors.
With Germany, our focus is giving a push for skill development programs and deepening of economic ties.
India is seeking closure to 23-billion $ Dassault Rafale fighter deal and an early works agreement with Areva on the Jaitapur nuclear power project in return for critical “Make in India” defence technologies and a joint venture for making large forgings for civilian nuclear reactors.
With Germany, our focus is giving a push for skill development programs and deepening of economic ties.
Points
to watch out for in relations with European Union
The
Free Trade Agreements between India and European Union
Trade between India and the EU stood at $101.5 billion in 2013-14 and it was $57.25 billion during April-October 2015, according to Indian government figures.
Trade between India and the EU stood at $101.5 billion in 2013-14 and it was $57.25 billion during April-October 2015, according to Indian government figures.
The European Union is
very eager to clinch a free trade agreement with India.
Geoffrey Van Orden,
chairman of the European parliament delegation for relations with India is very
optimistic about Narendra Modi’s leadership. He said, “I think Modi is a man
who wants to get things done”
Tariffs
cut on Cars, Wines and Spirits from Europe
The EU is very keen to
get access to India’ burgeoning markets and wants India to cut tariffs on cars,
wines and spirits from Europe.
India says it is ready
to consider some reduction of taxes on car components. On wines and spirits,
the taxes imposed by the centre are low but when tariffs levied by states are
added on, the prices become unviable for the EU.
India
wants fewer restriction on Indian working in Europe
India wants fewer
restrictions on the temporary movement of its nationals working in Europe.
Another sticking point
has been that the EU wants India to recognize 200 geographical
indications—labels used on products that specify their geographical origins.
Other
Areas of Opportunities
The EU on its part had
agreed not to oppose Indian generic drugs on the basis of patents.
European Investors would be closely watching
the progress of key Indian legislation such as the amended land acquisition
act, the insurance bill and the goods and services tax as a test of India’s
commitment to improving the ease of doing business. Investors were also hoping
for clarity in the government’s policy towards multi-brand retail.
Evolving an
understanding on key issues like climate change and changing dynamics of Middle
East, South China Sea and Ukrainian crisis.
Summarizing
Potential and
Limitations
India’s increasing
clout in world trade on account of its reinvigorated economy has made it
inevitable for EU to have a good relook at its relations, both economic and
somewhat strategic as well. India's increasing role in the geopolitics of the
Indian Ocean, and especially in the security of the Gulf, the source of much of
Europe's energy has made it a very important player. On both the fronts, there
is a lot of room for enhanced co-operation.
India-EU relations as of this moment lack substance and strategic weight. The Eurozone crisis has been an impediment too in increasing India’s confidence in EU. EU so far doesn’t add much value to India’s strategic and Economic aspirations. . India’s refusal to tow the lines of the west in Ukrainian crisis has also been an impediment in the relationship
India has rightly
stressed on enhancing ties with individual members so far. It is not the EU but
the existing European permanent members, the UK and France, which bring more
value to the table for India. Germany could add new dimensions to it. Now, it
seems to set for a change. We hope that that this visit of Modi will shift the
gears of our European engagements as well just like what he has done with the
economy.
Note: This article written by me was originally published on a portal on Prime Minister of India Narendra Modi
You can find my profile at : http://thekarmayogi.com/team_member/sachin-diwakar/
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