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India-EU Summit opens in New Delhi

02-10-2012 14:24 BJT

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The India-EU Summit is opening today in New Delhi. The summit is a bid to further strengthen ties between two of the world's largest economies. One of the major items on the agenda is the India-EU Free trade agreement. Even though the long pending FTA might not get through, some major announcements are expected at the conference.

The Indian auto industry is jittery at the possibility of the FTA going through as looks set to deliver another blow to the already sagging industry, which is likely to see a negative growth for the first time in the last decade. Shweta Bejaj reports from New Delhi.

It's the year of Free Trade Agreements in India; but this one is the biggest of them all; the India EU FTA.

And most worried about it is the Indian auto mobile sector. The EU trade union has asked India to cut its auto sector duties; so much so that it would also include Complete-built units also called CBU's.

Vishnu Mathur is the Director General of India's auto manufacturers association Society of Indian automobile manufacturers. He says this step would lead to an imbalance hurting the Indian auto industry even more.

Vishnu Mathur said, "We are seeing a very rapid decline of our exports to the European Union. The other thing that we have to see is that the European Union is a stagnant market, maybe even a shrinking market. On the other hand, India is a fast growing market, has long term growth potential and from that perspective, the Indian market has a lot more significance than any potential market in the EU for Indian cars."

Though the trade figures though look imbalanced. In 2011, India exported 2,30,000 cars to EU while EU exported only 6,000. Though EU believes that a cut in duty would benefit India increase its presence in Europe, Indian automobile manufacturers are in no mood to listen.

CCTV's Shweta Bejaj said, "Indian roads might look crowded but the Indian auto sector is likely to witness its first negative growth in a decade and that's the reason that the India EU FTA matters a lot to this sector."

The India EU FTA is aimed at opening Indian and the European markets for trade in goods, services and investment. Even if the FTA is not passed, a roadmap is likely to be announced.

Analysts say, trade is just a facilitator and the India-EU summit gains more significance in the backdrop of changing world equations.

Dr. Sanjay Baru, director of Int'l Institute of Strategic Studies, said, "Right now for India what is happening in the EU is of profound significance because if the European union were to actually break apart, the global equations would change and secondly the fact that the Europe is in crisis has enhanced the leverage of China in dealing with the European Union. So India's ambition is to build a multi-polar world in which you have the United States, China, Russia, you have European Union, India, Japan - different powers working together."

Other important issues to be discussed at the summit includes Iran, climate change, energy cooperation, and the fragile situation in Afghanistan and Pakistan.

But the most important will remain the FTA which has already missed many deadlines.

 

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Editor:Liu Fang |Source: CNTV.CN

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