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India-EU Relations : Perspectives in the 21st Century External Affairs Minister Shri Yashwant Sinha's presentation at the Panteion University, Athens

January 16, 2003

Excellencies,

I am very happy to be here today in Greece, the cradle of Western civilization and philosophy, to discuss how I see the future of India-EU relations. The ties between Greece and India are civilizational and span the millennia. The arrival of Alexander the Great to India in 327 BC was the first recorded contact between India and Greece. It is less well known that along with his vast army, Alexander brought with him a few philosophers including, Kallisthenes, who was the nephew of Aristotle. Even today, the name Sikander symbolizes Alexander in India. The catalyst however, which precipitated Greek civilization was the contact with the East even before Alexander’s invasion. Multiplicity of exchanges between Greek cities and their neighbours in the near East and Asia makes it hard to distinguish native and foreign contribution to Greek culture. The achievements that made Indian and the Greek civilization great are too varied and rich to be generalized and are impossible to summarize. Like Indian civilization, Greek civilization has over the years played an important role be it in art, culture, philosophy, poetry, mathematics, engineering etc. The cultural interplay has worked both ways and what it left behind was the seedbed that played a dynamic part in shaping today’s world.

The Indo-Hellenic cultural interaction continued long after Alexander’s death not only in art where inter-twining of our cultures was reflected graphically in the Gandhara School of Art, but also in the minting of coins and the introduction of Zodiac symbols to Indian astrology. Trade between East and West was another important link in this relationship.

Today, as modern dynamic societies our relations are based on the rich cultural heritage and links between our civilizations. At a time over the last two decades when democracy has spread, it would be only appropriate to mention that the genesis of this great tradition can be traced back to the great city-state of Athens. In fact, the magnitude of the Greek contribution lives on in the language that we still use today, for politics and political are terms derived from the Greek word for a city, ‘Polis’. The word ‘democracy’ itself is also derived from the Greek word ‘democratia’ from ‘demos’ (the people) plus ‘kratia’ (power or rule).

I am particularly pleased to be here at the Panteion University to speak on this important subject in a year when the university is celebrating its 75th anniversary. I understand that it is the 5th oldest university in Greece dating back from 1927. The university has produced many distinguished alumni including the present Prime Minister of Greece whom I look forward to meeting tomorrow.

The last ten years have been momentous for Europe and for India. They have seen the transformation of the EU from a community to a union. The year 2002 saw the successful launching of the Euro and the decision at the Copenhagen Summit on the accession of ten new member states by 2004. After EU’s expansion from 15 to 25 States, its population will rise by 75 million bringing the total to around 453 million. The increase in population will further expand the single market. The EU’s GDP will be grow by 5%. In terms of population, EU will be bigger than NAFTA comprising the US, Canada and Mexico, which have a population of around 400 million. What is significant is not only the size of the population, but the fact that this includes one of the most technologically advanced region of the world. Already in the forefront of science and technology, EU will take a further leap with the Galileo project, once it is implemented. We have also noted EU’s resolve to boost its R&D expenditure to maintain and strengthen its lead in science and technology. We understand that EU will provide for 17.5 billion Euros for research and development during the 4-year period 2002-2006.

This expansion of the European Union will no doubt have a profound effect on EU’s global role. It will also mean that the EU will have to address, as it is doing now, its own internal decision making structures to respond to the new challenges. The work of the Convention on the Future of Europe is of particular interest. The expansion has coincided with the development of military capacity within the EU to deal with security issues, including the establishment of a Rapid Reaction Force, greater surveillance capacity and greater readiness to take over some military operations in Europe in the future. These developments are also significant.

The past decade has also been momentous for India as we have transited from a mixed economy to a market economy. India is now a strong and powerful nation which has emerged on the world stage. We have today built significant national strength in every sense of the term. We have averaged 6% growth over the last decade and are targeting 8% over the next five years. Inflation has been at a record low. Our foreign exchange reserves are over US $ 70 billion. From a food shortage country, we have become an exporter and donor of food grains. Our software industry is the envy of the world. Our space, nuclear science, bio-tech and other high-tech capabilities are a matter of pride. Most of all, it is widely acknowledged that our human resources are among the best in the world. Today India is integrated with the rest of the world and there is a natural synergy between Europe and India. It is clear that it is on this foundation that we must build our future relationship.

Europe, I need hardly emphasise, is a key trading partner of India and a very important investor of capital in India. This is however a two way relationship. It is important that we try to improve the bilateral trade which at Euro 25 billion is far below its potential. We need to set some ambitious targets. Participants at the third India-EU Business Summit on 8th October 2002 at Copenhagen repeatedly stressed the need for significantly boosting our economic relationship by raising the current level of trade of Euro 25 billion to Euro 35 billion by 2005 and double it in 2008.

It is evident that in a transformed relationship between India and the EU, traditional links have to be sustained and nurtured and new links established. In this context, I should cite the importance of cooperation in knowledge industries, whether Information Technology, Bio-Technology, Pharma or Chemicals. In these industries, India has a natural advantage and mutual cooperation could form the basis for our relationship in the 21st century.

Politically, the relationship has already been transformed with an institutionalized Summit level interaction between India and the EU beginning from the 1st India-EU Summit on 28th June, 2000, in Lisbon. The Lisbon Declaration spoke of ‘a new strategic partnership founded on shared values and aspirations characterized by enhanced and multi-faceted cooperation’. These shared values, as our Prime Minister pointed out recently, include democracy, pluralism and liberalism – all values of open, inclusive societies. We must not forget that the EU member states include some of the world’s oldest democracies, while India is the world’s largest democracy. As emerging powers in a multi-polar world, India and EU are also factors for international peace and stability.

The challenges faced by both India and the EU, a challenge that open, tolerant, multi-cultural societies like India and the EU have to face, is the one posed by international terrorism. India has been a victim of terrorism for over two decades. It has led to the killings of more than 60,000 people in our country during that period. The total number of terrorist related incidents from 1st January, 1990 to 31st December 2002 is 55,825. Post 11th September, 2001, the international community and the EU have also realized that terrorism transcends national boundaries and no country is safe from its violent and destructive hands. One could almost say, that globalization as it came to be defined, before September 11 was challenged by the globalization of terror after September 11. Terrorism has now become an ideology and a new tool in the conduct of international affairs. A multi-dimensional approach is required to face the common threat. We have to systematically choke off the four crucial lifelines of terrorist groups: refuge, finance, arms and any remaining ambivalence on the part of the international community. India and the EU have already taken some steps towards promoting cooperation including through the establishment of an India-EU Joint Working Group on terrorism. Cooperation with Europol would be the next and natural consequence.

One of the most vital principles in the fight against terrorism, which is accepted by India and the EU alike, is that there is no justification for terrorism whatever the causes behind it. Indeed this position is accepted by the UN as well, which has repeatedly affirmed that there can be no religious, ethnic, ideological or any other justification of terrorism. The argument of ‘root causes’ of terrorism is self-serving. This is often given by States and groups, which sponsor and support religious extremism for their narrow territorial or ideological aims. If accepted, this would only provide legitimacy to acts of terrorism. Violence is not the remedy for socio-economic deprivation, which must be addressed through development. Political differences should be settled through accommodation within a democratic framework, rather than cited as ground for destroying pluralistic, civil societies and violating human rights of innocent civilians. Terrorism cannot be part of freedom or national liberation struggle. India achieved its Independence through a non-violent struggle.

Let me now turn to investment and technology and the trade and business relationship. The problems between India and EU in the form of non-tariff barriers against Indian products needs to be addressed urgently. 3.5% of India’s exports to the EU are subjected to a variety of trade defence measures,including repeated Anti-Dumping investigations on textile and clothing items on which no domestic injury could be caused due to their being under quotas being maintained by EU. EC should explore constructive remedies instead of taking anti-dumping measures as provided for the developing countries under the WTO’s Anti-Dumping Agreement. It would greatly facilitate trade especially in agricultural products if EU and India could mutually recognize each other’s ‘Export Inspection Agencies’. Mutual recognition of qualifications of each other professionals is another important area to facilitate movement of professionals in each others territories to provide services. This after all, is part of globalization.

We need a change in mindset and approach. We look forward to a relationship with the EU based on partnership. Indian companies are now ready to make investments and to share technology in some areas. This is not a one way street. The last India-EU Business Summit brought this out clearly. India and the EU should fully exploit the provisions of the Agreement for Scientific and Technological Cooperation and should carry it forward to strategic areas also.

Research & Development is an important area for future attention. India is today one of the platforms for R&D in the world. More than 30 multi-national companies have R&D bases in India. Thanks to our Institutes of Science, Engineering & Technology, India possesses a huge reservoir of highly skilled manpower. This could be used to our mutual advantage.

Our economic reforms programme continues to move forward. India has made steady economic progress despite an international economic slowdown. For over a decade, India maintained a growth rate of 6.5% per annum. This has come down to around 5-5.6% in last two years. This is well above the international average. This is a considerable achievement in an uncertain post-September 11 environment marked by nervous markets, rising energy prices and slow pace of growth of major economies. We are trying to accelerate it further. With second generation reforms, including privatization, this pace is bound to quicken.

The pace of India’s economic reforms may not be as fast as some would wish, but it is steady. As a democracy, India has to build consensus on these issues. Many major reforms have already been implemented. India has abolished quantitative restrictions on imports. This includes the agricultural sector, which has great sensitivity in India as in Europe. India's sizeable and growing middle class provides a large market to the EU. Foreign direct investment in India has increased this year despite fears in some quarters of an economic slow down. India has opened up Insurance and Banking sectors for Foreign Direct Investment. India's Patent Law has been strengthened.

Only recently while discussing South Asian Cooperation, I had commented on the remarkable process by which the European Union came to acquire a political and strategic dimension becoming virtually a United States of Europe. The EU is indeed an example of regional cooperation that we in Asia could emulate.

Finally, it is the diversity of India that gives potential strength to the India-EU relationship. India is in many ways an unique country. Where else would you find a population of one billion plus with multiple ethnicities, all known religions, an array of cultural traditions, with an unparalleled gene pool and bio-diversity? Where would you find a floristically rich country, one of the 12 mega-centres of bio-diversity in the world, with over 45,000 species of plants (excluding aquatic life forms), a significant number of which are employed for medicinal purposes? Where would you find a rich heritage of traditional systems of medicine such as Ayurveda, Unani, Siddha, Homeopathy and Tibetan (Amchi) systems? It is in this very individuality that lies the strength and dynamism of our future relationship. EU has to realize its gains in investing in this new, vibrant, creative and resurgent India.

The 21st century will surely be fundamentally different from the 20th. The dominant themes of the last century were imperialism, colonialism, apartheid, the Cold War and the East-West divide. Many of these issues are now behind us. The world is now globalised, inter-dependent with increasingly universalized norms. Democracy, pluralism and rule of law are the new watchwords for the international order. India and the EU need to develop and strengthen a framework in which both would confront and eventually overcome the global challenges to our common future such as international terrorism, drug trafficking, environmental degradation, population growth, poverty and food & energy shortages. India and the EU, liberal, pluralistic and multi-cultural democracies with open markets provide a strong underpinning for a future, multi-polar international order.

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