EUROPEAN UNIONDELEGATION TO INDIA

The European Union: a trading continent

0%2%4%6%8%

10%12%14%16%18%20%

IndiaEU US Japan China Brazil Russia

20101995

Export share (goods, % world exports)

INDIA THE EUROPEAN UNION AND TRADE

The EU is the world’s largest economy, generating over a

quarter of world GDP. It has close to 500 million inhabitants,

is the world’s most lucrative consumer market and the world’s

largest trading entity. Of the top ten trading nations in the

world, six are EU Member States.

Europe's single most important contact with the world beyond

its borders is through trade. Europe is the world's largest

exporter of manufactured goods and services, and is itself the

biggest export market for more than one hundred countries,

including India.

The growing partnership between the EU and India make

this relationship a crucial one for both partners.

The trading partners of the EU, including India, greatly benefit

from access to such a large market. It provides:

a single set of trade rules��

a single tariff ��

a single set of administrative rules that apply across ��

the whole EU area.

In short, the European Union provides a single market; a single

external border; and a single trade policy. This makes it easier for

companies across the world to do business with the EU.

EU Member States speak and negotiate collectively and

are represented by the European Trade Commissioner

both in the World Trade Organisation, where the rules

of international trade are agreed and enforced, and with

individual trading partners. By working together, Europe's

Member States have the weight to shape an open global

trading system based on fair rules – and to ensure that

those rules are respected.

United States€367.2 billion€301.1 billion

Brazil€41.2 billion€38 billion

Russia€108.7 billion€172.8 billion

China€133.3 billion€299.3 billion

India€44.6 billion€41.3 billion

Japan€62.1 billion€79.8 billion

EU exports and imports in goods and commercial services (2010)

Fair and open global tradeEuropean states were among the founding members of the modern international system of trade rules. This system, which has

grown over sixty years into the network of agreements and obligations overseen by the World Trade Organisation, supports

trade that is open, predictable and fair. Maintaining the WTO system, and helping it to adapt to a fast-changing world, is the

first priority of Europe's trade policy.

Upholding and meeting trade rulesBecause international trade rules are designed to ensure that trade is fair, it is vital that they are respected. The EU represents and

defends European interests in the court system of the World Trade Organisation, so that others live up to their WTO obligations.

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Trade as a force for sustainable development

The European Union is committed to pursuing a trade policy that not only boosts economic growth and creates jobs in

Europe, but which actively helps people around the world trade their way out of poverty. Europe has opened its markets fully

to all imports from the world's poorest countries, and it works actively to help developing countries build the capacity to take

advantage of trade.

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The EU and IndiaAt 1.2 billion, India is the second most populous state and largest democracy in the world; it has realised a

commendable annual GDP growth rate in excess of 7.5% for over a decade and is now in the world’s top ten largest

economies (4th by PPP).

As such, India is an important trade partner for the EU and a growing global economic power. It combines a sizable and

growing market with a growth rate that makes it one of the fastest growing economies in the world.

Trade in goods EU goods exports to India 2010:��

€34.7 billion

EU goods imports from India 2010: ��

€33.2 billion

Trade in services EU services exports to India 2010: ��

€9.8 billion

EU services imports from India 2010: ��

€8.1 billion

Two-way trade in goods and services between the EU and India reached €86 billion in 2010, that is €235 million

per day! The EU and India hope to increase their trade in both goods and services as well as investment through the

Free Trade Agreement (FTA) negotiations that they launched in 2007.

20

22

24

26

28

30

32

34

36

2006 2007 2008 2009 2010

(billi

ons o

f eur

os)

EU Exports to India EU Imports from India

EU-India trade in goods 2006–2010

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EU Imports from IndiaEU Exports to India

2.83.8

7.5

8.7 9 8.9

10

5.8

7.28.1

7.48.2

5.4

2.62.7

2.53 2.7 3

4.1

5.1

2.6

(bill

ions

of e

uros

)

0

2

4

6

8

10

12

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

European companies are global players and have faced

up to the challenge of globalisation, demonstrated by the

fact that out of the world’s top-20 non-financial Multinational

Corporations (MNCs) ranked by foreign assets, 14 are from

the EU, according to UNCTAD. The EU offers 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 or basic industry.

This wealth of experience and knowledge means that the EU

has much to offer India in its quest to grow, from large scale

EU-India trade in Services 2000–2010

creation of infrastructure to world-class experience in services

sectors that are crucial to modern day economies, and from

establishing home-grown Research and Development to day

to day business partnerships.

In 2004 India became one of the EU's strategic partners.

Since 2005, the EU-India Joint Action Plan, revised in 2008,

aims at realizing the full potential of this partnership in key

areas of interest to India and the EU. This objective is pursued

through a wide range of official EU-India bodies from political-

level annual summits to a variety of technical, subject-specific

working groups.

INDIA THE EUROPEAN UNION AND TRADE

The range of products imported and exported from India to the EU covers a wealth of sectors, from textiles and

engineering goods to transport equipment and gems and jewellery.

The EU accounts for 18.7 % of India’s exports and 13.8 % of imports making the EU India's number one trade

partner for trade in both directions. Moreover, two-way trade in goods between the EU and India more than

doubled in the 2000–10 decade from €25.6 billion to €67.9 billion.

The EU is also India's largest source of inward

investment (after Mauritius) and destination of outward investment. However, despite these encouraging numbers,

there still are areas of untapped trade and investment potential for both economies.

EU exports to India (2010)

Engineering Goods, 39.46%

Plastics & AlliedProducts, 4.25%

Transport Equipment,6.89%

Chemical & AlliedProducts, 9.34%

Metal & MetalProducts, 11.83% Gems & Jewellery,

20.70%

Others, 7.53%

EU imports from India (2010)

Agriculture &Allied Products,

5.64%

Gems & Jewellery,7.26%

Metal & MetalProducts, 6.63%

Leather & LeatherGoods, 7.04%

Mineral Products,14.78% Transport

Equipment, 6.23%

Chemical & Allied Products, 11.06%

Engineering Goods, 14.46%

Textiles & Clothing, 20.07%

Others, 6.83%

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The fact that European companies are the world’s most active investors

overseas is not an indication of a lack of opportunities for growth in their

home market – on the contrary, the EU remains the world’s number one

location for FDI. In 2008, the EU was host to foreign investments worth

US$6.4 trillion, which corresponds to around 43% of the world’s total inward

FDI flows.

Foreign Direct InvestmentEU�� outward investment to India 2010: €3.0 billion

Indian�� outward investment to EU 2010: €0.6 billion

FDI flows between the EU & India

Inflows from India into the EU Outflows from the EU to India

0.1

0.6

0

3.5

0.7 1.

1

1.6

2.5

2.5

4.6

3.1

3

0.2

0.1

0.60.

8

1.2

0.5

0.5

0.4

3.3

0.8

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

(bill

ions

of

euro

s)

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India's integration with the global economy An imbalance between relative levels of trade between EU and India may at first be suspected: the EU accounts for roughly 17%

of India’s two way trade and India’s share in the EU's trade is just over 2%; and where the EU is India’s key trading partner,

India ranks 8th in the EU’s comparable list.

In truth, total trade between both partners is roughly equivalent, largely splitting the €67.9 billion in 2010 in trade between

EU-India. This trade has grown impressively and more than doubled from €28.6 billion in 2003. At the same time,

EU investment to India has more than tripled since 2003 from €759 million to €3 billion in 2010 and trade in commercial

services has tripled from €5.2 billion in 2002 to €17.9 billion in 2010.

The EU-India FTAWith its combination of rapid growth and relatively high market protection

India was an obvious partner for one of the new generation of EU Free Trade

Agreements (FTA) launched as part of the Global Europe strategy in 2006.

The launch of the negotiations of the FTA between India and the EU in

July 2007 is another milestone in EU-India relations.

This agreement will aim to further facilitate and open bilateral trade through

commitments in many different areas: goods, services, investment, non-tariff

barriers, intellectual property, public procurement and others.

Studies confirm that both sides stand to gain significantly from this FTA, and the

more ambitious the commitments the bigger the gains are expected to be. In the

short run alone, India is expected to gain €5 billion and the EU over €4 billion.

The FTA for example would largely eliminate duties on both sides' ��

exports. This means for example, that textiles exported from India

to the EU would not anymore have to pay the current applicable tariff

of 9.6%.

Indian agricultural products�� would also gain significantly improved

market access while European products like machinery, transport

equipment or other industrial products would get better access to the

Indian market.

The overall environment for offering services and investing in each others'

markets will also be improved so that the increased trade in goods will be

accompanied by enhanced flows of services and investment.

Intensive work is currently underway with the aim of concluding negotiations as

soon as possible.

INDIA THE EUROPEAN UNION AND TRADE

EU-India: vast economic potentialThe scope and potential gains of this partnership are enormous, both for their respective domestic economies, and more

broadly in the international arena. For instance a stronger EU-India relationship could facilitate each party meeting its domestic

economic objectives through increased trade, investment, and cooperation in areas such as R&D. Indeed, a glimpse at the

relevant figures suggests a considerable untapped economic potential, both in India and the EU.

Helping partner countries to sell to the EU

The EU's Export Helpdesk is a service designed to facilitate market access to exporters wanting to market their products and

services in the EU. It is an online database which provides information on the EU's preferential trading agreements with its

partners; trade statistics; import tariffs and taxes; legal and technical requirements for all products; and links to the trade

authorities in the EU and Member States, as well as to Chambers of Commerce. For each type of information there is a user

guide explaining how to obtain accurate information or data. In each case it is important to find out and fill in the correct

ten-digit number for products of interest.

For more information on the helpdesk please see: http://exporthelp.europa.eu

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Information links:

�� Delegation Website http://eeas.europa.eu/delegations/india/index_en.htm

DG Trade Website ��

http://ec.europa.eu/trade/

EU-India Trade Statistics ��

http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/india/index_en.htm http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113390.pdf

European Business and Technology Centre ��

http://www.ebtc.eu/

European Business Group in India ��

http://www.europeanbusinessgroupindia.com/home.html

Council of EU Chambers of Commerce In India ��

http://www.euindiachambers.com/index.html

Delegation of the European Union to India65 Golf LinksNew Delhi 110003Telephone: (+91-11) - 49496565Fax: (+91-11) - 49496555 Email: delegation-india@eeas.europa.euWebsite: http://eeas.europa.eu/delegations/india

EUROPEAN UNIONDELEGATION TO INDIA