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Procedure : 2006/2034(INI)
Document stages in plenary
Document selected : A6-0256/2006

Texts tabled :

A6-0256/2006

Debates :

PV 27/09/2006 - 10
CRE 27/09/2006 - 10

Votes :

PV 28/09/2006 - 7.7
CRE 28/09/2006 - 7.7
Explanations of votes

Texts adopted :

P6_TA(2006)0388

Texts adopted
PDF 183kWORD 108k
Thursday, 28 September 2006 - Strasbourg Final edition
The EU's economic and trade relations with India
P6_TA(2006)0388A6-0256/2006

European Parliament resolution on the EU's economic and trade relations with India (2006/2034(INI))

The European Parliament ,

–   having regard to the India-EU Strategic Partnership Joint Action Plan of 7 September 2005 and in particular the section on developing trade and investment,

–   having regard to the conclusions of the 9th meeting of the India-EU round table in Hyderabad on 18-20 September 2005,

–   having regard to its resolution of 13 October 2005 on prospects for trade relations between the EU and China(1) ,

–   having regard to its resolution of 29 September 2005 on EU-India relations: A Strategic Partnership(2) ,

–   having regard to its position of 1 December 2005 on the proposal for a regulation of the European Parliament and of the Council on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems(3) ,

–   having regard to the WTO decision on TRIPS and Public Health adopted on 29 November 2005,

–   having regard to its resolution of 14 February 2006 on the human rights and democracy clause in European Union agreements(4) ,

–   having regard to the 2004 India-US Agreement: "The Next Step Towards a Strategic Partnership" and the Civil Nuclear Deal negotiated during President George W. Bush's State Visit to India on 2 March 2006,

–   having regard to its resolution of 4 April 2006 on the assessment of the Doha Round following the WTO Ministerial Conference in Hong Kong(5) ,

–   having regard to the EU-India Energy Summit held in New Delhi on 6 April 2006,

–   having regard to the visit to New Delhi and the Punjab by the European Parliament Delegation for relations with the countries of South Asia and the South Asia Association for Regional Cooperation (SAARC) in April 2006,

–   having regard to Rule 45 of its Rules of Procedure,

–   having regard to the report of the Committee on International Trade and the opinion of the Committee on Development (A6-0256/2006),

A.   whereas the EU and India constitute the biggest democracies in the world and their constitutional commitment to pluralism and the rule of law promotes consistency in trade and economic relations, while providing legal certainty for investment and contributing to regional and global stability,

B.   whereas the Joint Action Plan contains a comprehensive range of activities to be undertaken within the framework of trade and economic policy dialogue and cooperation, but whereas it fails to set priorities and deadlines,

C.   whereas the EU is India's largest source of foreign direct investment (FDI) with outflows amounting to EUR 1 100 million in 2004, and whereas India's FDI inflows into the EU increased from EUR 140 million in 2002 to EUR 600 million in 2003,

D.   whereas EU Member States account for 22.4% of India's exports and 20.8% of imports and whereas EU-India trade grew from EUR 4 400 million to EUR 33 200 million between 1980 and 2004 and by 16.9% from 2003 to 2004,

E.   whereas there is a stark imbalance in relative levels of trade between the EU and India; whereas the EU accounts for 21% of India's trade but India's share in EU trade is less than 1%; whereas the EU is India's largest trading partner but India ranks only 10th in the EU's comparable list,

F.   whereas India's economy has grown by an average of 6% per annum in the last decade and whereas it could continue to grow by 7-8% in the next decade,

G.   whereas an inefficient financial sector is an obstacle to India maintaining an 8% rate of economic growth,

H.   whereas, due to its size, population and dynamic economic growth in the past two decades, India is an emerging regional power and one of the world's nuclear powers able to influence the course of the global economy and security, giving India greater responsibility in multilateral fora such as the United Nations, the World Trade Organization or the International Atomic Energy Agency, and within regional organisations in Asia, notably SAARC and ASEAN,

I.   whereas Indian expansion brings beneficial opportunities but also raises legitimate concerns for some sectors of EU industry, raising the need for political management and cooperation for the economic and commercial management of its exports at the EU level,

J.   whereas if the current population growth rate of 2% is maintained, in 2025 India will have a population of 1.4 billion and will challenge China as the most populated country in the world,

K.   whereas in 2020 the average Western European will be 45 years old whilst the average Indian will only be 29; whereas, as a result of current demographic trends, the EU's potential growth is set to decline by 2020; whereas, by contrast, India's key comparative advantage is a large pool of young, trained, English-speaking, inexpensive workers,

L.   whereas a successful outcome of the Doha Development Agenda (DDA) is of crucial importance to both the EU and India and whereas such an agreement does not preclude bilateral WTO+ agreements,

M.   whereas India is one of the most active users, both as an initiator and a target, of the anti-dumping instrument; initiating 412 investigations in the last decade, followed by the US with 358 and the EU with 318,

N.   whereas India only recently established a Geographical Indication (GI) framework, but already 27 Indian GIs have been registered and more than 40 applications are pending,

O.   whereas the enforcement of intellectual property rights obligations within the framework of the WTO is important to both the EU and India,

P.   whereas the Indian Diaspora is over 20 million, with approximately 3 million living in the EU, providing remittances to India averaging USD 6 000 million a year,

Q.   whereas the continued tension since 1947 between the now nuclear-armed India and Pakistan, which brought the world close to a nuclear war, deters inward investments and commitments in both countries,

R.   whereas global demand for oil has grown by 7 million barrels per day since 2000, with 1 million barrels of that growth going to India whose oil consumption rate is accelerating rapidly; whereas India has the fourth largest ethanol industry in the world with an annual production of 462 million gallons; whereas 70 % of energy consumed in India is imported; whereas its continued economic growth will depend on the provision of new energy supply channels; whereas the increasing global demand for oil is a potential source of economic instability and strategic and political tension,

S.   whereas, however, India will be the first country in South Asia to establish strategic oil reserves,

T.   whereas 390 million Indians live on less than USD 1 a day and whereas India's growth has had unequal effects on segments of society, impacting on only a tiny fraction of the population,

U.   whereas the GDP of India's fastest growing state, Gujarat, doubled between 1993 and 2003 and per capita product increased by 73%; whereas, by contrast, for India's poorest state, Bihar, the increase in per capita product was only 22% for the same period,

V.   whereas the launch, on 2 February 2006, of the initiative known as the Rural Employment Guarantee Scheme, in the Anantapur district (Andhra Pradesh), will safeguard 100 days of work per year, on a minimum wage, in public projects for one member of family units on low incomes; and whereas this programme represents the most ambitious scheme to tackle rural poverty in India,

W.   whereas India is the single largest beneficiary of the General System of Preferences (GSP) scheme, with exports of EUR 7 700 million entitled to preferential access to the EU market, at either zero duty or at reduced rates of duty, in 2005; whereas this means that nearly half of India's exports to the EU, estimated at just over EUR 17 000 million, benefited from the GSP scheme; whereas tariffs for Indian clothing were reduced on average from 12% to 9.5%;

X.   whereas the biggest gains from the abolition of textile and garment quotas from 1 January 2005 went to both China and India, with their exports rising by 42% and 18% respectively last year; whereas, by contrast, most other developing country suppliers lost out, although the re-imposition by the EU of quotas on Chinese exports in mid-2005 had a positive effect on their exports in the second half of the year,

Y.   whereas India has one of the highest incidences of child labour in the world,

Z.   whereas, according to the United Nations 2006 report on the global AIDS epidemic, 5.7 million people are infected with HIV/AIDS in India; whereas less than 1% of the adult population in India is currently estimated to be infected but whereas India still exceeds South Africa as the country with the largest number of people infected with HIV/AIDS, which underscores the impact the disease is having on the South Asian subcontinent; whereas high-incidence States are lively economies, drawing in transient labour and trucking, both vectors of infection,

AA.   whereas approximately 80% of India's geographical area is vulnerable to cyclones, floods, landslides, drought, earthquakes as well as localised hazards and whereas the combination of poor socio-economic conditions and disasters has created a vicious cycle of poverty and vulnerability,

AB.   whereas the presence of malaria and cholera are still causes of grave concern in India, for which special policies must be adopted,

AC.   whereas the continued discrimination endemic in the caste system means that India continues not to get the best out of its people in terms of potential and skills,

Trade

1.  Welcomes both India's and the EU's commitment to a successful and ambitious outcome of the DDA; calls to this end on India to use its position as leader of the G20 to reach, by the end of 2006, a balanced agreement favourable to development between the developed countries, the emerging economies and the developing countries; notes that negotiations on the DDA are not incompatible with bilateral WTO+ negotiations; notes that an outcome of a concluded Doha Development Round will reduce the value of schemes such as the GSP to developing countries like India, by further reducing the margin of preference they enjoy at present; calls on the EU to offer to enter into a free trade agreement with India, along the lines of its agreement with Chile, which provides for duty-free entry for the exports of both parties on a reciprocal basis, and calls on the High Level Trade Group to explore mutual opportunities in this regard;

2.  Notes that, whilst Indo-United States relations have been on an unprecedented high, taking in a civilian nuclear deal signed over a year ago, the current impasse on the DDA has soured relations between the two countries and trade relations have steadily deteriorated, with India blaming the United States for its refusal to cut agricultural subsidies before developing countries start opening their markets to non-agricultural products and the United States threatening to withdraw the benefits of a three-decade old generalised scheme of preferences that allowed duty-free access to certain Indian goods; underlines the fact that a positive result of the DDA needs the full support of both the EU and India; urges India and the G20 to realise that the European offer on agriculture must be matched by the United States and followed by a reasonable offer by the G20 on the National Agri-Marketing Association and on services;

3.  Welcomes the work of the High Level Trade Group in improving cooperation, and the phased implementation of the Action Plan , which has determined a progressive involvement of India in major and joint international projects such as the ITER and Galileo programmes; notes however that although the Joint Action Plan provides only for ongoing dialogue in many areas, it does not provide any indications as regards priorities and deadlines; calls on both parties to show the political will necessary to consolidate their relations for an effective strategic partnership;

4.  Is concerned that, despite encouraging statistics, there remain several areas of untapped trade potential for both economies; calls on the High Level Trade Group to deal with issues of trade and investment as part of a wide-ranging, inclusive, political dialogue and to explore cooperation in areas such as migration, education and cultural exchange;

5.  Notes that India's high import tariffs and, despite recent significant progress, non-tariff barriers, remain a genuine concern for EU industry; believes that upholding such a protectionist policy after economic liberalisation gives rise to market distortions and manipulations; is concerned that WTO tariff negotiations have not led to any improvement (there was no binding of tariffs or commitment to maximum "binding" rates, which were also kept high) and that efforts consequently made by the Commission to open a bilateral dialogue with India on the subject of specific distortions have so far been unsuccessful; notes that a reduction in trade barriers can bring progressive improvements in trading conditions with the objective of promoting growth, employment and sustainable development; calls on India to bind its import tariffs at levels closer to its applied rates within the context of the DDA and to make further efforts to remove part of the existing non-tariff barriers; encourages the High Level Trade Group to work towards eliminating tariffs between the parties on substantially all trade through a bilateral free trade agreement, thus providing opportunities for existing and potential exporters to develop their business and diversify their export base;

6.  Calls on the EU to support India's international trade potential as well as efforts to attract FDI, in particular by stepping up trade-related aid to address infrastructure and administrative bottlenecks;

7.  Considers that competition rules and their effective enforcement are essential to ensure the realisation of the full benefits of liberalisation and related regulatory reform and contribute to economic development and good governance; considers also that an effective competition policy attracts foreign investors by creating a transparent and non-discriminatory legal framework for economic operators; notes that there is no "one size fits all" model as regards the competition provisions in the free trade agreements concluded by the EU during the past decade, as the contents of competition provisions vary depending on the existence and level of development of competition rules and enforcement institutions in the partner country; calls on the High Level Trade Group to consider the level of ambition to be achieved as regards competition provisions in any bilateral trade agreement between the EU and India;

8.  Notes that India negotiates in the area of anti-dumping both as a user and subject of proceedings; welcomes the good EU-India working relationship in this area and calls on both to work together to correct the abuse of anti-dumping instruments and to put an end to dumping;

9.  Notes that the EU and India consider GI protection to be a useful tool for producers, consumers and governments; notes, however, that the GI tool is not well-known in India; calls on the Indian government to promote the GI system and encourage applications for potential GIs; notes that, according to TRIPS, WTO Members are free to implement their law to give more extensive protection than is required by the Agreement itself; considers that a bilateral deal could offer protection to GIs in the EU and India beyond the TRIPS Agreement, thus providing a useful complementary tool to joint multilateral efforts;

10.  Notes that the emerging importance of intellectual property (IP) in India is evident from increased filings in Indian Intellectual Property Offices and notes that Indian industry has risen to global challenges and is adopting research-based development as an integral part of business strategy; notes India's recent reforms of its intellectual property rights (IPR) regime, including India's Patents (Amendment) Act 2005; notes that efforts have also been made to streamline and rationalise the procedural aspects to make the system more user-friendly; notes also that pursuant to new legislative initiatives, India has also embarked on a major modernisation programmes for all Intellectual Property Offices and committed significant sums for infrastructure creation and upgrading; calls on India to ensure that the enforcement of this regime is in line with the Rio Convention on Biological Diversity and existing obligations under the WTO;

11.  Notes that the EU has also put in place a comprehensive system of IP protection over the past 10 years through harmonising most national IP systems and putting in place Community IPRs throughout the EU; considers that, because of the principles of Most Favoured Nation and domestic treatment, this legislation benefits non-EU holders as well as EU IPR holders; considers enforcement to be an integral part of IP protection and encourages the EU and India to agree common principles for enforcement measures, such that they should be effective, proportionate and dissuasive and should not create barriers to legitimate trade;

12.  Considers that, with more than one out of every three copies of PC software obtained illegally worldwide, piracy continues to threaten the future of software innovation, resulting in lost jobs and tax revenues for both India and the EU; notes that, aided by a government policy of cracking down on software piracy offenders and awareness campaigns, India registered a significant drop in piracy of 2% in 2005; recognises, however, that there still is much to be done to control the gaining by Indian companies of an unfair competitive edge by the use of pirated "software" and "hardware" in production and manufacture; calls on India's State and federal governments to further reduce the piracy rate; notes that whilst current EU-US efforts to combat piracy will concentrate initially on China and Russia, the rest of Asia is due to follow; considers that it is in India's interests to work constructively with the EU within this effort in the light of a 2005 impact study by IDC estimating that if India is able to reduce the current piracy rate from the current 72% to 64% by 2009, India will generate 115 000 new IT jobs, and an additional USD 5 900 million pumped into its economy and an increase in tax revenues of USD 86 million;

13.  Recognises the significance of the pharmaceutical industry for the Indian economy and society and calls upon the Indian authorities to ensure that international standards are applied in the use of people and live animals in scientific experiments and that such experiments are kept to a minimum and alternatives found;

14.  Calls on the EU and India to lead the way in finding an expeditious and permanent solution on TRIPS and public health to facilitate access to essential medicines, within the Doha Development Round; welcomes the steps taken by the Indian government regarding IP rules for medicines; encourages the Indian government to implement the law faster especially as regards exports of generic medicines;

15.  Notes that traditional knowledge is increasingly recognised as a valuable asset for both developed and developing countries alike, with up to 80% of the world's population dependent on products and services derived from traditional knowledge innovations and practices to meet their everyday food and health needs, including as many as 441 ethnic communities in India; notes the complex legal, political and social links between IPR and the conservation of biodiversity and genetic resources; calls on the EU and India to work together to find a reasonable solution on the harmonisation of TRIPS with the objectives of the Rio Convention on Biological Diversity;

16.  Welcomes India's moves to reform its financial sector with regard to largely liberalising interest rates, reducing banks' required holding of government debt and relaxing banks' obligations to lend to priority areas such as agriculture and small-scale businesses; considers that as India becomes more integrated into the global financial system, the urgency of financial sector reform has increased; considers, in particular, that the liberalisation of the financial sector to make it more resilient to both internal and external shocks is necessary to encourage deposit growth, the development of a credit culture and the entry of private and foreign forces; considers that the transfer of technical and managerial expertise could play a useful role in developing India's financial markets and calls on the EU to offer assistance in this regard;

17.  Welcomes India's plans to remove controls on the Rupee, by removing all remaining capital controls on the partially convertible Rupee; considers that this will eliminate an important obstacle to India's integration into the global economy, allowing Indian individuals and businesses to invest more freely overseas and allowing large companies easier and cheaper access to foreign debt, which is currently limited to USD 500 million per company per year;

18.  Calls on India to become a Party to the Treaty on the Non-Proliferation of Nuclear Weapons, which is the indispensable multilateral instrument for maintaining and strengthening international peace, security and stability, and is concerned about the enhanced US and French-Indian nuclear cooperation in the face of India's lack of contractual engagement for nuclear safety;

19.  Notes India's acceptance that, if it wishes to achieve its ambitions, it must fulfil its responsibilities in South and South East Asia; welcomes the use of trade as a confidence-building tool between India and Pakistan, and particularly welcomes the landmark agreement of 2 May 2006 to revive trade and commerce across the Line of Control between the divided regions of Jammu and Kashmir by launching a truck service on the Srinagar-Muzaffarabad route, as well as a second cross-Kashmir bus service, linking Poonch in Jammu and Kashmir with Rawalakot in Azad Jammu Kashmir; welcomes Prime Minister Singh's pledge on 23 May 2006 to create an environment of freer trade and freer movement with "soft borders" to create a climate for a Kashmir settlement; calls on both India and Pakistan to further reduce administrative impediments to implementing trade-related confidence-building measures and for the EU to offer technical assistance, if required, in this regard;

20.  Notes that ASEAN still has advantages over India because of higher labour productivity, a skilled workforce and low land prices; notes also that ASEAN has the goal of setting up a single market by 2020, although some members, including Singapore, Malaysia and Thailand, are pushing for the target date to be brought forward to 2015; is concerned, therefore, that intra-regional trade in SAARC is still low; considers that there are too many exceptions for the South Asia Free Trade Agreement (SAFTA) to be treated as a standard FTA; notes that ASEAN ministers recently discussed proposals for a wider trade zone with other Asian nations, including India, China, Japan and South Korea; calls on SAARC to continually review opportunities to expand trade and investment in the region; considers that in its relations with India, the EU should take an inclusive regional approach and calls on the EU to institute a "vision group" similar to what has been done for ASEAN, to explore future opportunities for EU-SAARC relations;

21.  Notes that in August 2006, the SAARC Council of Ministers unanimously agreed that the India-Pakistan trade dispute under the SAFTA framework would be considered by SAARC Commerce Ministers before the 14th SAARC Summit in India on 3-4 April 2007; notes also that the EU has applied for and been granted SAARC observer status and will participate in the Summit; notes that the argument that trade must be linked to progress on the resolution of long-standing disputes between India and Pakistan underlies the delayed implementation of SAFTA; calls on both parties to continue political dialogue in tandem with trade negotiations; notes that consideration of items on the positive and negative lists is currently before the SAFTA Council; calls on the EU to offer any assistance required to facilitate this process and to ensure that real progress is made at the 14th SAARC Summit;

22.  Encourages India, as a member of SAARC and BIMSTEC, to use its positive influence to help facilitate democratic change and respect for human rights in Burma and to continue its support for the peace process in Sri Lanka and its assistance to the estimated 6,000 refugees who have fled to India since April 2006; notes in this regard the recommendation of United Nations Special Rapporteur, Philip Alston, for an independent international human rights monitoring mission to be sent to Sri Lanka to publicly report on violations of international law by all sides, and calls on both the EU and India to support this recommendation in relevant international fora;

23.  Notes that Asian countries such as India and China, despite years of economic growth, continue to be under-represented and unfairly marginalised in multilateral bodies, including the International Monetary Fund; calls on the EU and India to work together to redress such imbalances and ensure that voting shares and senior positions are allocated according to appropriate weight in the international economic system;

24.  Welcomes the Indian Government's reforms of its FDI strategy and the progress of the Investment Commission; is concerned that foreign investors still face frustrating bureaucracy at local level and other non-tariff barriers; urges the Indian authorities to continue their fight against bureaucracy and corruption; calls on State and municipal governments to simplify and consolidate application procedures; and calls for efforts to be made for greater legal transparency;

25.  Is concerned that the procedural system for approval of foreign investments represents a big hurdle, under which applications that are eligible for automatic approval are kept to a minimum, while the bulk of large applications are approved on a case-by-case basis; is concerned that many officials continue to discriminate in favour of local interests; notes that this approval and licensing process has been criticised in some regions for being unfair and lacking transparency, with regulations changing so exasperatingly often that it can be difficult to keep up with the vagaries of the system; calls on State and municipal governments to simplify and consolidate application procedures;

26.  Notes the major contribution of the Indian Diaspora to Indian growth; notes, however, that the Diaspora has only provided 10% of India's FDI inflows; considers that both social remittances and financial payments are needed for long-term development; calls on India to continue to develop schemes to access the resources of the Diaspora, with dual citizenship being a tangible example;

EU-India cooperation

27.  Welcomes the fact that the EU and India committed themselves to strengthening dialogue and engagement, including on human rights, as strategic partners at the sixth India-EU Summit on 7 September 2005, as reflected in the Joint Action Plan, which also includes development cooperation, giving importance to environmental sustainability and to social and economic cohesion; asks that an ongoing dialogue be maintained in the field of human rights within the strategic partnership; in this context, congratulates India's National Human Rights Commission on its independent and rigorous work on these matters;

28.  Stresses that meeting the Millennium Development Goals (MDGs) and combating poverty should remain a central element of the EU-India Strategic Partnership; welcomes the fact that the next EU-India summit on 13 October 2006 will address the issue of the MDGs; and calls urgently for specific measures to be taken to ensure that minorities such as Dalits and Adivasis and other marginalised communities, tribes and castes, are able to close the wide gap with the rest of the population regarding the attainment of the MDGs;

29.  Welcomes the emphasis on health, education, water and the environment in EC development cooperation with India 2002-2006, as well as the Joint Action Plan commitment to deepening development cooperation in the health and education sectors, aiming to enhance development cooperation to supplement important Indian social sector programmes, including specific measures effectively to put an end to discrimination against less-favoured social groups, particularly women; calls likewise for a boost to be given to measures to foster girls' education as part of the Action Plan, thereby meeting MDGs 2 and 3;

30.  Welcomes the Commission's public consultation to shape a major strategic review of the EU's trade and economic relations with China; considers that India poses a comparable, if distinct, challenge to EU industry; calls on the Commission to conduct a similar exercise for India to ensure political, economic and commercial management of these relations at an EU level;

31.  Considers that special attention must be given by the EU to the SME sector in India, and that SMEs could be strengthened through measures to help finance market-driven local projects proposed by citizens;

32.  Underscores that the EU development cooperation should cooperate with India as an emerging international donor by exchanges of experience and cooperation in concrete projects in developing countries; underlines that learning from Indian experiences could help to make EU development aid more efficient and productive;

33.  Notes that Indians have concerns about the EU and wish to study and understand it better; welcomes the Erasmus Mundus EUR 33 million scholarship scheme, with specific emphasis to be placed on collaboration in science and technology, where lessons from India's success could boost EU performance in the pyramid underlying the information society, namely: education, research and development and innovation; welcomes the creation of a Jean Monnet Chair in European Studies at the University of Delhi as a vital initiative to strengthen EU-Indian relations; considers that Europe's higher education institutions should duplicate this initiative by increasing their focus on Indian studies and marketing those courses effectively; suggests that Europe's relevant higher education institutions consider opening research offices in India, as the Harvard Business School has recently done in Mumbai; calls on the Commission's Delegation and Member State Embassies to work with the Indian authorities to promote the proper role of the EU in fostering educational, cultural and scientific exchanges, and suggests that cultural exchanges would help create broad public support for constructive collaboration and that professional and business exchanges could also be beneficial, both for cross-cultural understanding and to promote a two-way flow of information; highlights the success of the Executive Training Programme - People to People Exchange - that exists with Japan and Korea and urges the Commission to extend the programme to India, with the appropriate funding;

34.  Notes that there is a worrying lack of familiarity with the Indian market in some sectors of the EU business community; calls on the EU to engage more systematically with senior members of the EU business community, especially those from SMEs, to bring about a 'step-change' in their perceptions about India by highlighting the very significant business opportunities that exist there;

35.  Recommends that the Commission explore or deepen specific EU-India programmes in areas such as higher education and vocational training; programmes to encourage the exchange of students, teachers and researchers;

36.  Recognises that the Indian software and services industry has trebled in size in the past five years and is now worth EUR 20 billion; notes that much of this growth has come from Western vendors outsourcing development work to India; considers that the EU can take advantage of a major movement of highly qualified and skilled Indian workers but should avoid creating a "brain drain" effect on the development capacities of India; calls on the High Level Trade Group to explore an agreement on the movement of skilled workers under Mode 4, so that Indian IT experts can work in the EU after their studies, providing a source of qualified manpower and justifying the investments of EU higher education systems; notes that software companies are a magnet for associated companies and the service industry and infrastructure requirement that will accompany them, which can boost regional economies and provide other employment opportunities for local people;

37.  Notes that between 2003 and 2008, 200 000 EU jobs could be outsourced, mostly to India; notes also that by 2010, India's demand for foreign language professionals will be 160 000 and only 40 000 Indians will be qualified for the positions; considers that with 30 000 EU expatriates already working in India, there are clear opportunities for trained Europeans who are prepared to relocate and such a trend would ensure "brain exchange" between the EU and India, rather than "brain drain";

38.  Recommends that Member States and the Commission provide the right framework for companies and universities to benefit from India's fast growing economic developments in specific areas such as software and the film industry;

39.  Notes that the impact of Indian growth on global demand for energy raises concerns for energy security; notes that India still suffers severe energy shortages and is over-dependent on oil and coal, both expensive and polluting fossil fuels; notes that India's efforts to secure gas supplies and develop nuclear energy are two concrete results of this state of affairs; notes that even if India did develop nuclear energy, it would meet less than 5% of its electricity and only 2% of its total energy requirements; considers that efforts to develop nuclear energy would also be a climbdown from the Gleneagles G8 pledges to halt climate change and promote energy conservation; considers that, if not reversed, environmental degradation threatens to become a major impediment to India's future economic development;

40.  Notes that both India and the EU have a long tradition of promoting the use of renewable energy and believes that renewable energy such as solar, wind and biomass are practical energy options, together with major investments in energy efficiency, that could satisfy long-term energy needs; welcomes India's efforts in this regard, including its own rural biogas digesters and solar cells (used to power village homes and workshops), and more recently its success in building the world's fourth largest wind power industry; considers that, as the world's poorest nations are being negatively affected by the increased demand for oil, as illustrated by recent riots over rising oil prices in Indonesia, India should continue to support the development of regional renewable energy more widely in Asia, as it is already doing in Bhutan; welcomes the creation of the India-EU Energy Panel and calls for further cooperation on energy security and market reforms, renewable energy and energy efficiency; considers that India and the EU should continue to define the global energy architecture through innovative, sustainable energy development, whilst meeting climate change benchmarks;

41.  Notes that, as India is geographically diverse, it is a fertile environment for oil and gas, but that public-sector led exploration has, thus far, followed an unadventurous path; notes, however, that with the entry of European energy companies, this position is already shifting, e.g. Britain's Cairn Energy reported several oil discoveries in Rajasthan in 2004 (the largest estimated to contain 500 million barrels of recoverable reserves); calls on India to encourage a more vigorous search for oil and gas, by providing major incentives to attract the efficiency and expertise of European exploration companies;

42.  Notes that the cost of processing bio-diesel in India is about one third of that in Europe and that India has recently decided to expand its bio-diesel refining programmes; notes that India is expanding its ethanol industry and the government has enacted several types of financial incentives, including sales tax reductions and reduced excise duties on ethanol and ethanol-blended fuels; considers non-edible Jatropha to present a viable bio-fuel option for India, as it can grow in semi arid and arid soils and entail minimal investment, and encourages EU-India co-operation to this end; considers that, in addition to creating approximately 17 million new jobs and bringing revenue to depressed rural communities, such programmes will help reduce India's dependence on foreign oil but only if they are carried out in a sustainable way;

India's economic and social situation

43.  Notes that international trade can be a powerful driver of economic growth and poverty reduction, but it is not a magic bullet, and trade reforms are complementary to development policies; considers that to lift people out of pockets of poverty, and continue to climb the ladder of economic development, India needs to focus critically on building a business environment that deepens integration with the world economy in a widening range of manufactures and services;

44.  Welcomes the growing recognition of the importance of the external economic environment, trade and investment in India's latest five year plan on human development (2002-2007);

45.  Notes that imbalances between India's States are exacerbated by devolution of spending powers to States with varying standards of political leadership and fiscal management; considers that poverty alleviation depends on the redirection of State resources to rural areas and development of infrastructure to support the spread of manufacturing and service sector activities; calls on India to ensure coherence and better manage liberalisation by adopting sound complementary economic policies, including tax harmonisation, and focusing capacity-building efforts on the poorest States, enabling them to use funds effectively; notes the development effects of economic growth in some regions of India; calls on the Commission to support India in seeking to learn lessons from States that have prospered during India's boom, adopting best practice to ensure critical investments are channelled to lagging regions and under-represented social groups;

46.  Is concerned about the growing income gap between urban and rural areas in India; urges the Indian authorities to acknowledge the stagnation of agriculture in rural areas and to develop programmes to increase the agricultural output in these areas in order to combat rural poverty more adequately;

47.  Notes that, despite dramatic growth, India's infrastructure still displays, in parts, the characteristics of a developing nation, with poor transport networks and regular power outages; notes that the 2010 Commonwealth Games provide an opportunity for European companies to compete for key infrastructure projects; calls on India and the EU to explore trade-related infrastructure development, through public-private partnership investment, ensuring transparency, a credible regulatory environment and a level playing field between private investors and the government; accordingly calls for the use of loans from the EIB, whose mandate – in the case of Asia and Latin America – is centred on productive investment; calls on India and the EU to focus this investment in rural areas, providing better water supply and sanitation, improving transport networks, particularly all weather roads, and improving the quality of grid power output;

Development and Environment

48.  Acknowledges the important successes of the Government of India in the eradication of poverty, but notes that despite sustained economic growth, vast inequalities still persist, with about 30% of the Indian population still living below the poverty line; is particularly concerned about the situation of underprivileged sections of the population, in particular women, children, the disadvantaged and the rural population, e.g. Dalits and Adivasis (indigenous tribes and peoples); calls on the Commission and the Council to work together with the Indian government to improve the situation of those groups and to examine future cooperation as to their contribution towards ending gender and caste discrimination;

49.  Emphasises that successive Indian governments have made considerable efforts to tackle the issue of caste discrimination; believes however that much more has to be done;

50.  Urges the EU to promote and implement measures to ensure the socio-economic development of minorities, who have largely been excluded from the new economy in India and are discriminated against in development programmes and disaster recovery through, inter alia, the promotion of equal opportunities in employment in private EU-based companies and investors, the encouragement of Dalit-inclusive development programmes and the use of indicators to measure Dalit inclusion in the new economy;

51.  Points out that it is important that the Indian government bears in mind the issues of social cohesion, the environment and consumer rights in its development process;

52.  Welcomes EU cooperation with India in the field of environmental policy and the fact that environmental policy is identified as one of the sectors of cooperation in the Joint Action Plan; notes that EU and India as major global players have to play a central part in international efforts towards better environmental global governance; calls for environmental aspects to continue to be emphasised in economic development cooperation;

53.  Stresses that the increased environmental destruction in India is a constantly growing problem with unimaginable economic, social and environmental consequences, particularly for the large number of Indians living in poverty, and stresses the particular urgency of pressing ahead with EU cooperation with India in this field;

54.  Welcomes India's commitment to the MDGs; notes that India's Tenth Five-Year Plan outlines India's human development goals and targets for the next five to ten years, most more ambitious than the MDGs, but remains concerned over India's ability to meet them by 2015, as the UN Millennium Project claims India is unlikely to achieve at least 4 of the 8 MDGs; considers that trade-related assistance could help India meet them on schedule; calls on the EU to cooperate with India's priority universal education and rural health programmes and to encourage policies that facilitate the inclusion of young people in the working environment; believes that the EU could address equal opportunity concerns by boosting trade in products providing livelihoods for women, and facilitating trade in services in sectors employing women;

55.  Notes that connectivity is one of the MDGs and that UN Secretary-General, Kofi Annan, has called for connectivity in every developing world village by 2015 in order to eliminate disparities in terms of freedom, wealth and power; welcomes initiatives such as the "Hole-in-the-Wall Internet Education Experiment", whereby more than 150 high-speed computers, with keyboards, touch mouse and web cameras have been placed in 50 locations from Delhi slums to points in rural India, allowing thousands of previously illiterate boys and girls to teach themselves not only IT skills and several elements of primary education but also to raise their aspirations; considers that such projects, whilst not offering a satisfactory substitute to a classroom with a teacher, could bridge the gap for children who currently have no possibility of a traditional form of education; calls on India to share the benefits of its IT boom with the 98% of its population currently not affected by it and channel investment and aid into such projects, at an estimated recurring annual cost of less than 2 cents per child per day;

56.  Notes that India was one of the main beneficiaries of the GSP scheme, with average utilisation rates of 80%, across a variety of sectors, including animal products (88%), gems and jewellery (85%), transport equipment and common metals (83%); notes that 40% of India's clothing exports, worth just over EUR 3 000 million, out of total exports of EUR 4 800 million, and nine-tenths of India's footwear exports, valued at EUR 600 million, out of total exports of EUR 675 million, benefited from the GSP scheme; notes that countries with their own weaving industries, such as India, were able to make far more extensive use of GSP facilities than countries such as Bangladesh, which use imported fabrics for garment manufacture, who experienced difficulties in using the GSP scheme because of the EU's rules of origin scheme; welcomes the EU's practice of keeping these schemes and rules under review and encourages it to simplify and rationalise these rules; welcomes the proposal to replace product-specific rules of origin with a single across-the-board criterion so that eligible countries may find it easier to use the scheme;

57.  Is concerned that, with 60% of the world's remaining tigers being in India, the planned but delayed all-India tiger census may show a drop in numbers to a critical low of 1 500 tigers in the country; acknowledges that the value of the illegal trade in wild animal species is estimated to be second only to the international trade in illegal drugs and that the levels of exploitation and trade in some species, such as tigers, are so high that their populations are being severely depleted; requires improved monitoring of imports of wildlife specimens and wildlife products so that the Convention on Trade in Endangered Species (CITES) is upheld, and enforcement improved in order to save endangered species from the threat of extinction; calls on the EU offer cooperation and technical assistance to India to help maintain its biodiversity and tackle the illegal trade in wildlife; calls for the issue of tiger protection in general, and combating the trade in tiger skin, bones and body parts in particular, including through customs cooperation, to be placed on the agenda of the next meeting of the EU-India Environment Forum;

58.  Notes that trade liberalisation has left smaller farmers in both the EU and India facing global competition, forcing down prices, whilst the reduction in government subsidies has made farming more expensive for them; is concerned that, in India, farmers are turning to contract farming for exports, instead of providing domestic products, which is leading to malnutrition in poor rural areas; is concerned that, in many instances, more than half of India's agricultural produce goes to waste due to a lack of cold storage and distribution facilities; notes that whilst the farming sector is closed to foreign investment, there are opportunities for EU companies in non-crop agro-allied sectors, which are open to foreign investment and could rectify many storage problems; encourages India to direct funds for trade-related infrastructure to rural agricultural areas to help farmers adapt to the challenges of globalization and to explore partnerships in agri-processing sectors;

59.  Urges the EU to promote in international fora greater corporate responsibility among foreign undertakings established in India, and at the same time urges that an agreement be reached with the Indian government to set up an effective system for monitoring workers' rights within domestic and foreign companies based in India;

60.  Calls for talks between the EU and India concerning investment to take account of the social and political responsibility of foreign investors; stresses that investors' rights must go hand in hand with obligations and that investors should at least apply the International Labour Organization's (ILO)'s core labour standards;

61.  Welcomes India's commitment to the prevention of child labour and participation in the International Programme on the Elimination of Child Labour and the INDUS child labour project; is concerned by the high incidence of child labourers in India; calls on India to cooperate with the ILO and ratify Convention 138 on Minimum Age and Convention 182 on the Worst Forms of Child Labour; calls on India to take measures in order effectively to combat all forms of modern slavery, child labour and the exploitation of female labour, with a view to ensuring respect for the fundamental rights of workers and averting social dumping; as well as to adopt the ILO principle of 'decent work'; recalls the importance of various trade arrangements complying with international conventions on human rights and labour standards;

62.  Stresses that the EU should press the Indian government to tackle, with the greatest sense of urgency, bonded labour, which affects millions of people in India; calls for India to ratify Convention 98 on the right to organise and collective bargaining;

63.  Considers that India should ratify and implement the remaining ILO Conventions as soon as possible in order to help strengthen long-term development and improve the quality of life of the poorest segments of society;

64.  Underlines the importance of not separating the developing trade relations between the EU and India from human rights reforms in India;

65.  Notes that India's current administration has more openly acknowledged the problems posed by HIV/AIDS; considers that the spread of HIV/AIDS has the potential to disrupt India's progress ; notes that limited access to health-care and low levels of awareness are responsible for its growing incidence; welcomes the fact that it has increased its funding and programmes to address the problems posed by HIV/AIDS and calls on the EU to assist India to scale-up programmes for individuals and communities at high risk; accordingly welcomes the work of the National AIDS Control Organization (NACO) in its activities for raising awareness among the rural and urban populations;

66.  Considers that recent natural disasters, especially the Indian Ocean tsunami and South Asian earthquake, have exposed the need for more creative and imaginative collaboration between the multitude of agencies and organisations responding to disasters; notes that UNESCO, through its Oceanographic Commission, has been active in establishing an Indian Ocean Tsunami Warning and Mitigation System and that the UN is coordinating the implementation of the Hyogo Framework of Action, a 10-year natural disaster risk reduction plan; calls on India, the EU and its Members States to support these initiatives, so that, by anticipating the frequency and severity of natural disasters and the synergy between humanitarian efforts and government relief agencies, the sustained effectiveness of post-disaster assistance can be increased;

67.  Calls for a parliamentary summit to be held annually to coincide with or immediately precede the annual EU-India summit, which usually takes place without the official participation of the European Parliament; considers that such summits would make it possible to develop the links between parliamentary bodies, improve understanding of our differences and bring the democratic systems of both sides closer together;

68.  Calls on the Commission to report to the European Parliament on a regular basis on progress in implementing the Joint Action Plan between the European Union and India;

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69.  Instructs its President to forward this resolution to the Council, the Commission, the governments and parliaments of the Member States and the Government and Parliament of the Republic of India.

(1) OJ C 233 E, 28.9.2006, p. 103.
(2) OJ C 227 E, 21.9.2006, p. 589.
(3) Texts Adopted , P6_TA(2005)0454.
(4) Texts Adopted , P6_TA(2006)0056.
(5) Texts Adopted , P6_TA(2006)0123.

Last updated: 26 January 2007Legal notice