E.U.-India: from fascination to greater cooperation

By Chris Patten

India always fascinated Europe; its culture, its diversity, its democratic tradition, its sheer size. Today, the European Union is India's top trading partner, and European companies are the leading investors in the country. But the European Union has not - at least until now - exercised the same fascination for Indians as India has for Europeans. Relationships with individual countries - Britain, France and Germany - have always dominated Indian attitudes. That is an understandable reflection of history.

Later this week, I shall be making my first visit to India as European Commissioner for External Relations. It seems that India is now taking more interest in the E.U. There are two main reasons: the end of the cold war leading to EU enlargement, and the launch of the Euro. The first EU-India Summit at Lisbon in June 2000 marked a turning point. The leaders of the two largest democracies discussed a multitude of common transborder challenges, such as a new WTO round, climate change, terrorism and nuclear proliferation. They also confirmed our mutual interest in seeing closer bilateral trade and investment links and co-operation in new technologies.

Our two markets will comprise 1.5 billion people after enlargement of the EU - a quarter of the world's population. Yet at present our trade with India represents less than 1.5% of the Union's foreign trade, and only 0.4% of the EU's direct investment abroad goes to India. There is a huge economic and commercial potential waiting to be tapped.

The last decade of reforms and liberalisation has benefited the economy. India has experienced constant growth when other countries of the region were suffering from a serious crisis. The reforms have also supported unprecedented development in high- tech sectors like information technology. Indeed, India has been so successful, that it provides accountancy services and exports software worldwide, with its engineers taking up job offers from many industrialised countries. But if other sectors are to experience similar growth and increased competitiveness, the reforms must continue, and the Indian Government must not allow corporatist resistance to reduce India's attractiveness to foreign investors.Globalisation means that the competition for foreign direct investment is every bit as competitive as the pageants which Indian beauty queens nowadays seem to dominate. But the vital statistics which interest private sector investors are economic ones. They are concerned about a transparent and sound legal, administrative and fiscal environment, and a functioning infrastructure. It is the countries which outshine their competitors on those grounds who will win the FDI crown.

The Commission will do its bit to increase India's chances with companies coming from the EU. We are working on a joint initiative to promote trade and investment, focussing on the private sector, in preparation for the next summit which will be held in New Delhi later this year. Our co-operation programmes are intended to assist India to meet and apply standards in areas such as phytosanitary health.

India would also benefit from the launch of a new round of multilateral trade negotiations. They would reduce the obstacles to trade and investment. The EU is committed to a new round in which the vital interests of developing countries like India are addressed. We are very conscious that globalisation needs to be harnessed to benefit the poor and vulnerable nations and populations.

Indeed, humanity's greatest challenge this century is the elimination of poverty. This is India's greatest challenge too. Europe supports the Indian Government's ambitious socio-economic reforms, and the combined efforts of the Commission and member states make us the largest donor for India's development. The Commission recently granted Euro 200 million to the Sarva Shiksha Abhiyan programme intended to extend elementary education to all Indian children.

Our development partnership, and our wider relationship, should draw on the strengths of our two civil societies. Their vibrancy and diversity reflect both the strengths of our respective democracies, and the multi-lingual, multi-ethnic societies in Europe and India. Indeed, as many commentators have recognized, India's choice of democracy has promoted stability and peace, and prevented this diverse country with its 18 officially recognised languages from coming apart at the seams. The European Union - with 11 official languages at present - faces a similar challenge in pursuing political and economic integration as the best means to promote peace and stability both within as well as outside the EU. At the same time the variety of different national, regional and local traditional democratic institutions provides a highly diverse, yet strong democratic underpinning.

The EU-India civil society relationship has a solid base thanks to the remarkable cooperation of European and Indian NGOs. The Commission has financed more than a thousand projects of Indian NGOs in India focussing on poverty alleviation, women's empowerment and children's rights. Civil society must also be one of the motors in the relationship between the European Union and India, and a source of new ideas. That is why in the course of my visit I will inaugurate a Round Table made up of eminent representatives of the Indian and European civil society together with Foreign Minister Jaswant Singh. A network of Euro-Indian ``think tanks'' will also be set up during the year and we are looking into the possibilities of building further links in culture and education. By forming `thinking links', we should start to dispel the ignorance and stereotypes that hamper mutual comprehension and build a basis to move from European fascination with India to greater EU-India cooperation on the world stage.

(The writer is European Commissioner for External Relations)

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