Trade

India is one of the growing economies that will reshape the global economy in the twenty-first century. Europe is the largest trading power. Both are involved in key negotiations to boost trade and investment at the WTO and bilaterally through an ambitious Free Trade Agreement.

The European Union is India's number one trade and investment partner.  Two-way trade in goods and services totalled €86 billion in 2010 – or roughly €235 million per day – and has continued to expand in 2011 when the two-way trade in goods alone reached €80 billion.  Our bilateral trade has more than doubled in the last decade and the EU remains the most important export destination of Indian exports of both goods and services.  Furthermore, as well as being the main destination for Indian outward Foreign Direct Investment (FDI), the EU is also India's most important source of inward FDI - after Mauritius - providing a quarter of all inward flows since 2000, resulting in a total stock of some €34 billion. 

For further information on bilateral trade in goods and services as well as investment, please access the following: Trade Investment pdf - 25 KB [25 KB]

Europe is the world's largest trading bloc

The European Union brings together 500 million citizens and four of the world’s seven largest economies. It is the world's largest exporter of manufactured goods and services, and is the biggest export market for more than one hundred countries. Alone, it accounts for one fifth of global trade. Trade is the motor of Europe‘s prosperity.

In this ‘borderless’ Europe, people and products can move freely from one place to another. The 27 Member States of the European Union share a single market, a single external border and a single trade policy. European Union Member States have agreed to pool their sovereignty and follow a common policy on international trade. It means there is one negotiation, one negotiator – the European Commission – and at the end of the process just one agreement instead of 27 different sets of trade rules with each of Europe's trading partners. The Commission also represents the EU Member States in the World Trade Organisation.

Member States embassies in partner countries are in charge of export promotion and offer a wide range of services to their national operators, including helping them e.g. to know more about the Indian market; find local contacts; carry out in-depth research on the market for their goods; or attend trade fairs.

India's is rapidly integrating with the global economy

India is an important trade partner for the EU and a growing global economic power. It combines a sizable and growing market of more than 1 billion people with a growth rate of between 8 and 10 % till 2008 - one of the fastest growing economies in the world. India's growth also proved to be more resistant to the world economic and financial downturn than most other countries. Although it is far from the closed market that it was twenty years ago, India still also maintains substantial tariff and non-tariff barriers that hinder trade with the EU.

Overall cooperation framework between the EU and India

In 2004 India became one of the few EU's "strategic partners" . Since 2005, the EU-India Joint Action Plan , revised in 2008 , aims at realising the full potential of this partnership in key areas of interest to India and the EU.

The EU and India have in place an institutional framework, cascading down from the annual EU-India Summit held at heads of States and government level, to a senior-official level Joint Committee, to the Sub-Commission on Trade and to working groups on technical issues such as technical barriers to trade (TBT), sanitary and phytosanitary measures (SPS), agricultural policy or industrial policy. These are the fora where a number of day-to-day issues, such as EU market access problems, are discussed.

More on the broader framework for EU-India relationship

WTO

The GATT-WTO system, which has grown over sixty years into the network of agreements and obligations overseen by the World Trade Organisation, helps to ensure that trade is open, predictable and fair. More than 150 countries are now members of the WTO. The WTO provides a forum in which all of its members have an equal say in the making of trade rules and in the negotiation of new WTO trade agreements. The WTO system has helped to shape and maintain a system of global trade rules that not only keeps the global economy open for trade, but reflects and respects the special needs and concerns of developing countries. European countries – as well as India – were amongst the founding members of the modern international system of trade rules.

Both EU and India are firm supporters of the GATT-WTO system and key actors in the Doha round of negotiations launched in 2001. A successful conclusion of the Doha round would contribute significantly to a more open and stable environment for trade and investment for both the EU and India. India as a leader of the group of (advanced) developing countries known as the G20, and also as pasrt of G4 (along with the EU, the US and Brazil) is steering the negotiations.

FTA

With its combination of rapid growth and relatively high market protection India was an obvious partner for one of the new generation of EU FTAs launched as part of the Global Europe strategy in 2006. With its 500 million affluent consumers market, the largest in the world and the first outlet for India's goods and services, the EU was a very attractive potential FTA partner for India.

The parameters for an ambitious and comprehensive FTA, including goods, services, investments and other key aspects, were set out in the report of the EU-India High Level Trade Group in October 2006, which was tasked with assessing the viability of an FTA between the EU and India. Other studies have underlined the economic potential of an FTA between the EU and India.

Negotiations were launched in June 2007. In the first two years since the launch, several negotiation rounds were held.

Bilateral discussions on market access

In addition to multilateral and bilateral negotiations with India, the European Commission works on a day to day basis to remove specific barriers and obstacles encountered by exporters, to open up new opportunities for European investment, and to reduce counterfeiting and piracy of European goods. This is part of the renewed market access strategy launched in 2007.

Trade-related technical assistance

The EU is providing trade related technical assistance to India, with the aim of supporting India in  better integrating into the international trade system,  with a view to further enhancing bilateral trade and investment ties with the EU.

CITD
The Capacity Building Initiative for Trade Development programme has been launched in 2013. The EU financial contribution to the programme is EUR 9 million. The specific objectives of programme are twofold:

1) to enhance capacity of India’s trade-related regulatory institutions and enforcement systems in order to meet international standards and requirements and business needs

2) to support India’s trade-related training institutions in strengthening their capacities.

The expected results for the programme will be:

  • Improved food safety and SPS management system through the food supply chain. 
  • Strengthened capacities and transparency in the areas of industrial standards and TBTs as well as in support compliance with the REACH (Registration, Evaluation, Authorisation of Chemicals) requirements in the chemicals and related sectors 
  • Improved  administration and enforcement of its Intellectual Property Rights system in line with best international standards 
  • Exchange of best practice to set up a post clearance audit (PCA) function in Indian customs and to strengthen the capacity to implement it 
  • Improved capacity in terms of investigation, reporting and enforcement functions for the institutions involved in competition policy (CCI - Competition Commission of India). Improved awareness and capacity by private sector and government institutions on fair competition, procurement and transparency

Civil Aviation
The EU-India Civil Aviation programme, "Institutional Capacity Building for the Civil Aviation Sector in India", covers with its activities the period 2010- 2014, The EU contribution to the programme is approximately 6,5 Millions Euros. The objective of the programme is to strengthen the institutional capacity of the Civil Aviation regulator in India and to help ensure a safe and secure aviation environment, mainly through improvement of skills in the sector, implementation of international civil aviation standards, policy support and harmonization with EU best practices. 

European Business and Technology Centre (EBTC)
EBTC is a programme co-funded by the European Union, funder under the preparatory actions budget line and implemented by EUROCHAMBRES, the Association of European Chambers of Commerce and Industry. Its activities focus on business and research cooperation in key clean-tech sectors: Energy, Environment, Biotechnology and Transport. The EC contribution is EUR 16 million.
A key role is played by 16 European partners combining business organisations, academic and research institutes from all over the EU, all of them with a successful track record in their respective field. The European network is complemented by a network of European Chambers that are established in India. It started its activities in 2010 and is expected to be financially self-sustainable by end 2016 – when the EC grant will expire. Link: www.ebtc.eu

Key documents

EU India Trade Policy

June 2007 : Qualitative Analysis of a potential Free Trade Agreement between the EU and India

June 2007 - Economic Impact of a Potential FTA between the EU and IndiaMessage from Mr. José

13 October 2006 : Report of the High Level Trade Group

Eu trade Policy

May 2009 : Europe's trade policy ?

EU performance in the global economy

January 2009 : EU performance in the global economy