Booming Indian Economy Attracts Contacts

Giving support to widespread belief that Asia’s largest and most populated countries have become major engines of economic growth, a number of senior European leaders flocked to India in recent weeks to raise their countries’ profiles in that surging market.

And they will be followed in the coming weeks and months by major European-Indian technological and business gathering;

Leading the recent visitors to India in the recent period were French Industry Minister Nicole Fontaine and Dutch Economic Minister Laurens-Jan Brinkhorst. Both met with national and regional leaders and addressed the Confederation of Indian Industries (CII). Earlier in the year, the Foreign Ministers of Britain and France also visited India for major foreign policy addresses, (See related article.)

In addition, shortly afterwards, India signed a major defence procurement accord with Britain evaluated at over €1 billion for the acquisition of Hawk trainer aircraft which had under consideration and negotiation for many years.

Leading the most recent list of visitors in late February, Laurens-Jan Brinkhorst, who has held various Dutch Ministerial posts and been a Member of the European Parliament and senior EU Commission official, focused publicly on the EU-India Business Summit scheduled to be held in Amsterdam later this year, when the country holds the EU presidency. He indicated that the enlarging EU and the rapidly liberalising India had tremendous opportunities to work together and could lead to channelling much of the €50 billion invested abroad by the EU to India. He also told the CII business audience that no-one wanted the year to be a wasted one for negotiations under the Doha Round of trade issues and he urged Indian industry not to compare EU agriculture with the US, because the way agriculture was organised in the EU was similar to the way it is in India. He also said India should develop a list of products it has an interest in to seek easier access to the EU markets. He also suggested concentrating on the two issues of Government Procurement and Trade Facilitation in the Singapore issues of the talks and to drop Investment and Competition policy negotiations. Commenting on the presentation, R.V. Kanoria, chairman and managing director of Kanoria Chemicals and chair of the CII WTO committee, agreed that agriculture was the key to the WTO negotiation and that countries would have to discuss the three issues of market access, domestic subsidies and export support together.

In early March, French Minister for Industry, Energy and Telecommunications Nicole Fontaine, who has also been President of the European Parliament, met with her Indian counterparts as well with Indian industry aiming at developing bilateral business, trade and educational contacts.

During her stay she met with Aroun Shourie, Minister of Communications and IT and Disinvestment, and visited the software park in Salt Lake City in West Bengal and the French company ATOS SEMA software facilities as well as holding meetings with ministerial meeting in West Bengal. She told the CII audience that the reforms initiated by the Indian Government are on the right track that would lead eventually to an economic boom. She said she found a new dynamism and confidence in India; But she added that while Franco-Indian collaboration had existed for a long time and had tremendous potential, bilateral trade was far below this potential, with being only the 8th largest investor in India. She also said that with Minister Shourie there were discussions on student exchanges through distance learning and the issue of visas.

In his comments, CII France chair, Dhruv M Shawney said the service sector, agriculture and manufacturing were key areas for cooperation between India and France which dated back to the 17th century. He underlined for example that Indian pharmaceutical companies were looking aggressively at participating in the European market and that France could be an investing foothold there. He also pointed to investment in Indian R&D as possible attraction for France and added that there existed a need for positive information that stressed the mutual advantages of outsourcing.

She particularly cited the involvement of French firms in India. In this context, she announced that Alcatel was developing IT related services in Chennai and Bangalore with Indian partners, which should open the way for other ventures. She also noted French cooperation with Delhi Metro during the first phase of its completion. Regarding outsourcing, she qualified the term as confusing and said she opposed it if it was at the cost of losing jobs, but added she was in favour of investing in fruitful enterprises in India as a means of collaboration.

Half-way around the world, the interdependence between a small country and a giant one was also on display as the head of the Belgian Government made the unusual gesture of addressing a relatively small but powerful Indian community in the port city of Antwerp.

The specific object of this interest was the community of some 200-300 families originally from Gujarat which have established themselves as an integral, if not dominant, part of the Antwerp diamond industry. This industry, as Prime Minister Guy Verhofstadt underlined March 9, involves 30,000 jobs in the city, at a time when employment is the country’s number one priority. While noting the vast differences in size and population between the two countries, he also stressed that “both countries play a prominent role in each other’s economy,” adding that “little Belgium” ranked just after the US as the most important export partner for India. He also remarked that “It is due to one important sector, one important product: diamond.” And he also saluted the fact that some one-third of this Indian community had adopted Belgian nationality.

But he then underlined steps the country had taken to remain competitive in the diamond sector and the difficult European economic environment.