The EU's economic and trade relations with India
Delivered in Plenary - 27th September 2006
The EU’s strategic partnership with democratic India is of vital importance for both the EU and India. I welcome the strengthening of political and economic dialogue and engagement as well as discussions on human rights at the India-EU Summit on 13 October. However, given the astonishing recent growth of India’s economy and its emerging global big-power status, our partnership must now deepen.
Therefore I strongly favour a bilateral India-EU free trade agreement. That would have mutually beneficial results as our economies are complementary, as India needs our high-tech finished products and we need their services and basic machinery. We are already India’s biggest trading partner, at some EUR 40 billion annually, and we collaborate now on high-tech projects such as Galileo and ITER, demonstrating the sophistication of India’s 8% annual growth economy.
I also call for enhanced regional cooperation and economic integration of India and Pakistan with SAARC and SAFTA, which enhances the confidence-building measures between the two states which, until recently, were on the verge of war. The line of control between the divided regions of Jammu and Kashmir could eventually be just a line on the map, if people, goods and services could flow freely.
Pakistan should desist from its restrictive positive list of freely traded goods and change to a more liberal negative list as expected by MFN and SAFTA rules. India is fast becoming the prime south-Asian geopolitical player and it is high time that the UN Security Council admitted the largest democracy in the world to its ranks as a permanent member. China is our second largest trading partner, but the EU does not share the same fundamental values with it as we do with India. That fact needs greater recognition in this House.
Coming from Britain, with our traditional links to India, I commend the Karim report and call on the Commission to develop a much deeper political and economic India-EU relationship culminating in a bilateral free trade agreement.