INVEST NORTH 2016
A conclave to showcase Business and Investment Opportunities
22-23 September 2016 – The Lalit Hotel – New Delhi
A conference organised by CII and DIPP
Speech by Mr. Tomasz Kozlowski,
Ambassador of the European Union to India
on 'Global Engagements for Growth'
23 September 2016 – at 10:00 – 11:15
Ladies and Gentlemen,
Thank you for the invitation to this important event. The title of this session is particularly significant: now more than ever, countries have to engage with each other in order to promote economic growth that would benefit all.
On the global economy
The recovery of the global economy remains uneven at the moment with growth flat in advanced economies and a slowdown in many emerging economies. World trade is also growing at a disappointing rate. WTO economists have reported that "Growth in the volume of world trade is expected to remain sluggish in 2016 at 2.8%."
Further with the slowdown in global growth, a rise in protectionism is also to be feared, amidst concerns of unemployment and recessions.
With the rising concerns over protectionism and the global economy stuck in a 'low growth trap', it is becoming even more important to engage with each other. Co-ordinated and comprehensive policy action is urgently needed to move our economies to a higher growth path. Closer international co-operation is needed to ensure inclusive and sustainable economic and financial integration which works for the benefit of all.
And more importantly we need to remind ourselves of the benefits of trade and investment liberalisation and its impact on global growth. The recent crisis brought a realisation that trade along with investment can be a stabilising force in tough times. Opening up of trade along with complementary measures can stimulate growth, create jobs and ensure higher wages for workers as well as lower prices for consumers.
The EU is well placed to use trade and investment policy to contribute to global and inclusive growth, benefitting companies, consumers and workers alike, benefiting all of us.. The EU is the world’s largest exporter and importer of goods and services taken together, the largest foreign direct investor and the most important destination for foreign direct investment (FDI). This makes the EU the largest trading partner of about 80 countries and the second largest for another 40. The EU's strength will not only benefit its own citizens but also those in other parts of the world.
The EU's trade policy
The EU remains committed to open and transparent trade. In October 2015, the European Commission presented a new trade and investment strategy. This strategy supports a responsible approach to new economic realities. In the current climate, in which trade policy is increasingly political and sometimes controversial, we wanted to send a clear message that trade policy concerns and benefits all: large corporations but also SMEs, workers, consumers, citizens at large; and the developed and developing countries.
The EU also remains committed to the multilateral agenda. The multilateral system remains the cornerstone of EU's trade policy. The biggest losers of a failure to move forward at the WTO would be the most vulnerable developing countries, as well as countries without an active bilateral or regional agenda.
In parallel, we are pursuing an ambitious bilateral and regional negotiating agenda. TTIP is the most ambitious and strategic trade negotiation that the EU has ever undertaken, and we are preparing for the next (15th) round in New York in early October. We recently concluded negotiations for a free trade agreement (FTA) with Canada - our most comprehensive FTA to date. In Asia and the pacific region, we have an ambitious FTA in place with South Korea which has provided an enormous boost to bilateral trade flows. We have also concluded FTA negotiations with Singapore and Vietnam and are in an advanced stage in the negotiations with Japan. Negotiations with the Philippines and Indonesia have started and we expect to be in a position to launch negotiations with Australia and New Zealand in the course of 2017. In addition to FTAs, we are negotiating investment agreements with China and Myanmar.
Last but not least: India. An ambitious FTA with India would create new trade and investment opportunities, growth and jobs in a combined market of more than 1.7 billion people. Following a successful Summit last March we are intensifying our dialogue with our Indian friends to re-establish the conducive circumstances for resuming talks. Our objective remains unchanged: we want to conclude an ambitious, comprehensive and balanced FTA. Our strong bielevebelief is that it would be in the interest of both the European Union and India.
EU-India investment ties
India's huge and growing market with a growth rate that makes it one of the fastest growing economies in the world, makes India a key destination for EU investments. At present close to 6,000 EU companies are present in India, providing direct employment to 1.2 million workers and indirect employment to about 5 million. At the end of 2014, the total stock of EU FDIs in India was about 38,5 billion Euros.
EU investments in India cover a broad range of sectors including automotive, financial services, infrastructure, logistics, chemicals, pharmaceuticals, health care, IT, food processing, petroleum and natural gas. A number of EU companies are now household names in India, doing business here for several decades.
Indian investments in the EU are also growing either through green-field projects or mergers and acquisitions.
The EU commends Indian government's initiatives to stimulate investments, like the 'Make in India', 'Smart Cities' and 'Clean Ganga'. Those are excellent platforms to carry forward this important partnership between the EU and India. The EU can offer important opportunities in terms of technology-sharing and know-how, providing high level synergies in sectors where EU companies are world leaders - this includes infrastructure, transport, telecom and basic industry. The EU has a lot to offer India in its quest to grow, from large scale infrastructure projects to world-class experience in services sectors that are crucial to modern-day economies and from cutting-edge Research and Innovation to regular business partnerships.
We praise India's recent efforts in liberalising its investment regime by continuing to open up more sectors to FDI and making investment processes easier. The recent approval of the landmark Goods and Services Tax bill as well as the insolvency and bankruptcy bill is a positive development. Effective implementation of these bills could go a long way in improving the ease of doing business in India and encouraging global investments to India.
In parallel with improved market access, investment protection is and remains of major importance for European and Indian investors. Both, the EU and India are looking at how best to reform and improve their approaches to investment protection. It would thus make sense to negotiate ambitious investment protection provisions within the context of our future FTA, ensuring a high level of protection to Indian investments in the EU and to EU investments in India. Such provisions would improve and replace the Bilateral Investment Treaties India has concluded with the EU Member States.
EU's contribution to India's policy on investments
The EU is facilitating the involvement of EU businesses and technologies by establishing partnerships with India’s authorities. As an example, in the last EU-India Summit on 30 March 2016, both sides agreed to strengthen links between the Digital India initiative and the EU’s Digital Single Market, by cooperating on regulatory issues such as ICT standardisation (e.g. on 5G), Internet Governance, Research and Innovation, and a Startup Europe India Network. Water management, clean and renewable energy are other fields of great importance for India and for us. The last Summit agreed to establish the EU – India Water Partnership and the EU-India Climate and Clean Energy Partnership to facilitate policy dialogue, but first of all European companies contribution to the implementation of Indian flagship projects, including through investments and transfer of technology.
Finally, at the Summit the EU and India agreed to establish a mechanism to facilitate investments of all EU Member States to India. We have now agreed on the details of this mechanism and are ready to launch it very soon.
Our strategic partnership and the FTA
India is one of the EU's ten strategic partners. Trade is one of the most important elements of this partnership. The EU is India’s first partner in terms of trade. Two-way trade in goods and services exceeded € 100 billion in 2015.
EU and India are committed to further increase trade flows in goods and services as well as bilateral investment and access to public procurement through the FTA negotiations that were launched in 2007. Our already strong economic ties would receive a major boost once the FTA is in place. The EU's commitment to "an ambitious outcome of the free trade agreement with India" was confirmed at the EU-India summit in March 2016.
Ladies and Gentlemen, I would like to conclude by underlining once again the considerable benefits to both sides of an ambitious, comprehensive and balanced FTA. It is our hope that we will manage to establish favourable circumstances to reengage resolutely in this common endeavour.
Thank you for your attention.
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