The Hindu : Business : Kamal Nath voices concern over EU's non-tariff barriers

Online edition of India's National Newspaper
Wednesday, Apr 06, 2005

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Business

Kamal Nath voices concern over EU's non-tariff barriers

By Our Special Correspondent

NEW DELHI, APRIL 5. Even as the Union Commerce and Industry Minister, Kamal Nath, today voiced India's concern at the increasing use of non-tariff barriers (NTBs) erected by the EU countries on grounds of health and SPS (sanitary and phyto-sanitary) requirements, the visiting German Federal Minister of Economics and Labour, Wolfgang Clement, flayed developing countries for lack of substantial offers for liberalising trade in services and called for greater market access for industrial products.

Addressing an interactive session with business and industry representatives from India and Germany, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI), Mr. Clement urged the Indian government to further relax the foreign equity ceiling in areas such as pharmaceuticals and civil aviation and complained of complicated procedures that still continue to restrict the flow of foreign investment into India. Mr. Nath emphasised the need to ensure that the applicable regulations are in conformity with the international best practices and facilitate trade, not obstruct it.

"We seek German understanding and cooperation in settling the issues of various Non-Tariff Barriers supposedly imposed on grounds of health and SPS requirements that Indian exporters have been facing in the European Union. India looks towards Germany as the channel for articulation of our views and concerns in the EU. We will appreciate immediate steps to implement the much-needed mutually beneficial changes,'' he said.

Agreeing with the FICCI President, Onkar S. Kanwar's observations, Mr. Nath focused on the new investment opportunities in the wake of India's liberal FDI policy. He pointed to the possibilities of cooperation in IT, biotechnology and infotainment, besides other areas like telecom, engineering, environmental technology, chemicals, pharmaceutical and food processing. Similarly, India could benefit from German expertise in the field of renewable source of energy, which would boost bilateral economic ties, the minister said.

He said on the investment front, the picture was not encouraging, as the total German investment in India had been barely $1.26 billion. The actual figures of foreign direct investment (FDI) did not reflect the synergies of the two economies that were evident from the fact that more than 600 German companies were operating in India and a growing number of Indian companies were investing in Germany. Hence, he emphasised the need to do more to realise the true potential of bilateral trade and investment.

`Misleading statistics'

An exclusive German window, the Minister said, was functioning in the Department of Industrial Policy and Promotion (DIPP) for focussed enhancement of industrial cooperation with Germany and stressed that all such instruments should be utilised effectively.

The German Minister observed that successful conclusion of the WTO negotiations at the imminent Hong Kong Ministerial hinged on the cooperation and willingness to compromise by all sides, a commitment that was imperative to give a lasting boost to world trade.

While observing that Indian official statistics did not adequately reflect the true picture as they excluded the reinvestment by existing Germany companies in India, he said German companies should cash in on new areas in India such as bio-technology, chemicals, pharmaceuticals and preventive health care and asked India to tap German expertise in infrastructure building in the ports, airports, telecom and energy sectors.

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