EU and India

2. What Is Regional Economic Integration?
 Regional economic integration has enabled countries to
focus on issues that are relevant to their stage of
development as well as encourage trade between
neighbours.
 There are four main types of regional economic integration:
Free trade area.
Customs union.
Common market.
Economic union.

3. European Union
The European Union (EU) is an economic and political union of 28 member states that are
located primarily in Europe. The EU operates through a system of supranational independent institutions
and intergovernmental negotiated decisions by the member states. Institutions of the EU include
the European Commission, the Council of the European Union, the European Council, the Court of
Justice of the European Union, the European Central Bank, the Court of Auditors, and the European
Parliament. The European Parliament is elected every five years by EU citizens. The EU's de
facto capital is Brussels.
The main objectives of the Union are now to promote peace, the Union's values and the well-being of its
peoples.
 an area of freedom, security and justice without internal frontiers ;
 an internal market where competition is free and undistorted;
 sustainable development, based on balanced economic growth and price stability, a highly competitive
social market economy, aiming at full employment and social progress, and a high level of protection
and improvement of the quality of the environment;
 the promotion of scientific and technological advance;
 the combating of social exclusion and discrimination, and the promotion of social justice and
protection, equality between women and men, solidarity between generations and protection of the
rights of the child;
 the promotion of economic, social and territorial cohesion, and solidarity among Member States.
 In addition, the Union respects cultural and linguistic diversity and ensures that Europe's cultural
heritage is safeguarded and enhanced.

4. How does it work?
 There are five EU institutions,
each playing a specific role:
 European Parliament (one of two
legislative bodies in the EU; elected
by the peoples of the Member
States)
 Council of the European Union
(EU’s highest Legislative Body; has
legislative initiative; is made up of
representatives appointed by
member states according to a
population-based allotment)
 European Commission (EU’s
executive body; one commissioner
per country appointed by each
government)
 Court of Justice (ensures
compliance with the EU laws)
 Court of Auditors (manages the EU
budget)
 These are flanked by five other
important bodies:
 European Economic and Social
Committee (expresses the opinions
of organized civil society on
economic and social issues)
 Committee of the Regions
(expresses the opinions of regional
and local authorities)
 European Central Bank
(responsible for monetary policy and
managing the euro)
 European Ombudsman (deals
with citizens' complaints about
maladministration by any EU
institution or body)
 European Investment Bank (helps
achieve EU objectives by financing
investment projects)

5. Most EU policy efforts to date have been in the pursuit of crisis control and mitigation. But first steps
have also been taken to
redesign financial regulation and supervision – both in Europe and elsewhere – with a view to crisis
prevention.
The EU has played an important role to provide guidance as to how state aid policies – including to the
financial sector – could be shaped so as to pay respect to competition rules. Moreover, the EU has
provided balance-of payments assistance jointly
with the IMF and World Bank to Member States in Central and Eastern Europe, as these have been
exposed to reversals of international capital flows.
direct EU support to economic activity was provided through substantially increased loan support from
the European Investment Bank and the accelerated disbursal of structural funds.
 Why does it matter?
The development of trade - if properly managed - is an opportunity for economic growth. So
EU trade policy seeks to create growth and jobs by increasing the opportunities for trade and
investment with the rest of the world.
By working together, Europe has the weight to shape an open global trading system based on
fair rules – and to ensure that those rules are respected.
The EU’s success is inextricably bound up with the success of our trading partners, both in
the developed and developing world. For this reason, sustainable development is central to
trade policy.

6. EU in world trade
The EU is in prime position when it comes to global trade. The openness of trade
regime has meant that the EU is the biggest player on the global trading scene and
remains a good region to do business with.
 The EU has achieved a strong position by acting together with one voice on the
global stage, rather than with 28 separate trade strategies.
 Europe has become deeply integrated into global markets. Due to the ease of
modern transport and communications, it is now easier to produce, buy and sell
goods around the world which gives European companies of every size the
potential to trade outside Europe.
 Workers often deliver their services across different countries within a
multinational or by specific service contracts.
 As investors thrive in a stable, sound and predictable environment, they are
looking for investment barriers to be dismantled and investments to be protected.
 Every day, Europe exports hundred of millions of euros worth of goods and
imports hundreds of millions more.
 Europe is the world's largest exporter of manufactured goods and services, and is
itself the biggest export market for around 80 countries.
 Together, the European Union's 27 members account for 19% of world imports
and exports.

7. The EU is an attractive market to do business with
 500 million consumers looking for quality goods
 the world's largest single market with transparent rules and regulations
 a secure legal investment framework that is amongst the most open in the world
 the most open market to developing countries in the world
Trade in goods and commercial services 2010, € billions
Country or
region
Imports Exports
EU 1956 1882
United States 1762 1358
China 1197 1319
Japan 641 685
South Korea 392 417

8. Costs of staying out-
challenges of EU
 Export problems
 Access to EU markets is not guaranteed
 Inflation problems
 Europeans nervous about the Euro due to expansion of the EU invest in Swiss Francs,
inflating the value of the currency and inhibiting Swiss exports
 Capital flight
 High construction costs, expensive labor, and skill shortages already make
investment in Switzerland unattractive
 Several multinational corporations, such as Roche, Sulzer and Alusuisse, have frozen
planned investment projects in Switzerland
 Large Swiss companies, including Nestle, are shifting activities out of Switzerland in
fear of discrimination by other nations
 Already four out of five employees of the top 15 Swiss companies work in other
countries
 Scientific information lag
 EU scientific exchange programs accept Swiss citizens only if they fail to fill such
exchanges with persons from EU countries
 Accumulated bilateral agreements and cooperation may create de-facto
incorporation in the EU for Switzerland

9. EU and India relations
 The EU and India hope to increase their trade in both goods and services and
investment through the Free Trade Agreement negotiations launched in 2007.
 Following the EU-India Summit in February 2012 negotiations entered an
intense phase. Important issues include market access for goods, the overall
ambition of the services package and achieving a meaningful chapter on
government procurement.
Trade picture
 India is an important trade partner for the EU and an emerging global
economic power. The country combines a sizable and growing market of more
than 1 billion people.
 The value of EU-India trade grew from €28.6 billion in 2003 to €79.9 billion in
2011.
 EU investment in India more than tripled between 2003 and 2010: going from
€759million in 2003 to €3 billion in 2010.
 Trade in commercial services tripled during the same time period, going from
€5.2billion in 2002 to €17.9 billion in 2010.

10. Trade in goods 2010-2012, € billions
EU
imports
EU
exports
Balance
2010 33.2 34.8 1.6
2011 39.3 40.4 1.1
2012 37.2 38.4 1.1
Trade in services 2009-2011, € billions
Year
EU
imports
EU
exports
Balance
2009 7.3 9.0 1.7
2010 8.6 10.7 2.1
2011 10.8 11.4 0.5
Foreign direct investment 2010, € billions
Year
Inward
stocks
Outward
stocks
Balance
2010 7.0 34.4 27.4

11. Dismantling trade barriers in India
 The European Commission's Trade and Investments Barriers Report,
published in March 2012, points out that some progress has been made
to dismantle trade barriers in India:
 Two trade barriers were fully removed in 2012: export restrictions on
cotton and security requirements for telecommunication equipment.
 Progress has also been achieved with regard to sanitary and phyto-
sanitary rules (Formal document issued by
an exporting country's agricultural authorities to verify a shipment has
been inspected and is free from harmful pests and plant diseases.)
 No positive movement has been seen in the area of equity caps.
 India's industrial policies contain trade-restrictive elements.
 The report also identified India's national manufacturing policy as a
key priority for reform.

12. EU-India trade negotiations
The negotiations cover:
 access to each other's markets, for goods, services and
to public procurement contracts,
 the framework for investment
 the rules that frame trade, such as intellectual property
and competition
 sustainable development, growth in trade is in tandem
with the environment, social and labour rights.

13.  India has embarked on a process of economic reform and progressive integration with the
global economy that aims to put it on a path of rapid and sustained growth. However,
India's trade regime and regulatory environment remains comparatively restrictive (for
example see the World Bank's Ease of Doing Business Index). India still maintains
substantial tariff and non-tariff barriers that hinder trade with the EU. In addition to tariff
barriers to imports, India also imposes a number of non-tariff barriers in the form of
quantitative restrictions, import licensing, mandatory testing and certification for a large
number of products, as well as complicated and lengthy customs procedures.
 With its combination of rapid growth, complementary trade baskets and relatively high
market protection, India is an obvious partner for a free trade agreement (FTA) for the EU.
 The parameters for an ambitious FTA were set out in the report of the EU-India High Level
Trade Group in October 2006, which was tasked with assessing the viability of
an FTA between the EU and India. Other studies have reinforced the economic potential of
an FTA between the EU and India.
 Negotiations for a comprehensive FTA were started in June 2007 and are on going. This
would be one of the most significant trade agreements, touching the lives of 1.7 billion
people.
 India enjoys trade preferences with the EU under the Generalised Scheme of Preferences.
 To assist India in its efforts to better integrate into the world economy – with a view to
further enhancing bilateral trade and investment ties – the EU is providing trade related
technical assistance to India. This is part of the EU's assistance programmes with India.

14. India
134 6 8 8 5 3 1 2 6 4 8 6
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15. Sources:
http://ec.europa.eu/europeaid/where/asia/country-
cooperation/india/india_en.htm
www.Europa.com
Wikipedia