EU Global Strategy

EU Statement at the Trade Policy Review of India - 6 January 2021

Geneva , 06/01/2021 - 00:00, UNIQUE ID: 210106_5
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Statement delivered by Ambassador João Aguiar Machado

On behalf of the European Union, I would like first to welcome the Delegation of India, led by Dr. Anup Wadhawan, Secretary, Department of Commerce. I would also like to thank the WTO Secretariat and the Government of India for their respective reports and express appreciation to H.E. Ms Sunanta Kangvalkulkij (Ambassador of Thailand) for her remarks as the Discussant.

The EU values its Strategic Partnership with India, of which trade and investment are important components. The EU and India have a long-standing and well-developed trade and investment relation, which we are committed to develop further, as highlighted during the 15th EU-India Summit held on 15 July 2020.

Bilateral trade in goods between the EU and India has increased by over two thirds in the last decade. Bilateral trade in goods and services exceeded €100 billion in 2019 and is balanced, which points at the complementarity between our economies.

Yet, the untapped potential of our trade and investment relations remains significant. The EU is India's largest trading partner, accounting for €80 billion worth of trade in goods in 2019, and the second-largest destination for India’s exports. At the same time, India is only the EU’s 10th largest trading partner, accounting for 1.9% of its total trade.

The COVID-19 pandemic has deeply affected the world’s economy. Both the EU and India are being hit severely by the health crisis, with serious short and long-term social and economic consequences. The EU and India share the objective of quickly returning to a path of sustained and sustainable growth. Trade and investment will be important components of our respective strategies to go back to growth and generation of employment.

In this respect, we take note of the objectives of the “Self-Reliant India” initiative to attract foreign direct investment, promote local manufacturing, and integrate further into global supply chains. At the same time, we are concerned about the continued trend in the policy pursued by the Government of India to apply new barriers to trade between India and the rest of the world, including the EU.

Very little progress has been made by India in the last years on eliminating barriers to trade, many of which are long-standing. In addition, we are witnessing an amplification of trade barriers in the wake of COVID-19. Furthermore, we are concerned about the overall direction of India’s trade and investment policies, notably regarding the extent of its trade openness and its willingness to integrate truly into global value chains.

These developments are a source of concern and uncertainty for foreign economic operators and investors, which the sheer size of the Indian market might not be enough to balance it out.

Against this background, the many written questions submitted by the EU in the context of the current Trade Policy Review reflect the debt and breadth of our concerns, and our quest for clarifications.

They cover issues that we have raised before, such as exceedingly high customs duties, unpredictable customs procedures, cumbersome SPS requirements, gaps in the protection of intellectual property rights and geographical indications, and the ever-narrowing access to government procurement in India. The accelerated trend in India to develop domestic standards that deviate from internationally agreed ones is also a concern. These obstacles risk to increasingly insulating the Indian market from the world economy and are holding back its economic potential.

The EU and India share a strong commitment to the WTO’s rule-based multilateral trading system. As major trading powers, we should share a responsibility to preserve, strengthen and reform the WTO – and the EU looks forward to further engaging with India to this end. In particular, the EU would welcome India to approach ongoing and future plurilateral initiatives with an open mind. In this context, the EU would like to reiterate its invitation to India to join the three ongoing Joint Statement Initiatives on e-commerce, services domestic regulation, and investment facilitation.

Furthermore, we invite India to engage constructively with the EU and other co-sponsors of the initiative on World Food Programme (WFP), which we discussed at the General Council in December. We should strive to address the current blockage of the initiative and send a very positive political signal in support of the life-saving humanitarian work of the WFP.

Differences are a normal occurrence in the WTO and the EU always favours amicable solutions in the framework of multilateral or bilateral channels. However, in certain cases, there is no choice but to have recourse to the WTO’s dispute settlement mechanism, as illustrated by the pending case the EU initiated on India’s tariffs on ICT products, for which we hope for a prompt resolution. In this context, we hope that India may still see the MPIA as a useful stepping-stone to the restoration of binding two-step dispute settlement.

Mr Chair, the Trade Policy Review is an important exercise in transparency, which provides WTO Members with an unique opportunity to get a better understanding of how other trading partners perceive their policies, to provide clarifications in this respect, and ultimately to set the ground for improved trade flows. The EU hopes that the present TPR will fulfil this role.

On behalf the EU, I wish India a very productive and successful review. Thank you.

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