Indian firms are doing well in Europe

Luisa Santos is Director for International Relations at BusinessEurope, a leading Europe-wide business facilitation group. Here she talks 'India Global Business' through some of the ups and downs of the India-EU relations over the years and what lies in store for the future. How important is India to the EU The EU is India′s number one trading partner (13 per cent of India′s overall trade with the world in 2014-15) while India is the EU's ninth trading partner. This clearly indicates that our relation needs rebalancing. India is one of the fastest growing world economies yet for the EU it's well behind the US, China, Switzerland, Russia, Turkey or Japan. This means EU companies are not taking full advantage from all the opportunities that exist in India. Some of these opportunities might not be known from companies in Europe but sometimes companies are not seizing these opportunities because the conditions to access the Indian market are complex and difficult. This can be as a result of high duties, difficulties to access public tenders or lengthy administrative procedures. What are some hurdles Indian firms may face in the region which BusinessEurope could help with Overall Indian firms are doing well in Europe. One of the main problems might be the fact the single market is not complete and we cannot say that the EU market is fully integrated. This is a problem EU companies also face. In BusinessEurope we strongly support the completion of the single market for instance in key areas like services or digital economy. Progress here will benefit both EU and foreign companies like Indian, doing business in Europe. We can also provide support through our member federations representing employers across Europe. These have a better and more targeted view of existing business opportunities in their respective markets. Is Brexit likely to affect India-EU ties

We are well aware of the historic and cultural ties between India and the UK. However, even if the UK leaves the EU we don't expect any negative impact on EU-India ties. The EU as a whole is an extremely important trade and investment partner for India and this should not change. In general companies in different EU member states and not only in the UK are interested in doing business with India. For that reason, BusinessEurope has been very supportive of the EU-India Free Trade Agreement negotiations. We believe there is huge potential in a number of areas of the Indian economy and EU companies can bring know-how, expertise and services that will make Indian companies become more competitive. Unfortunately, negotiations have been stalled for some time and this does not help in enhancing trade and investment ties between India and the EU. What more can India and the EU be doing to enhance trade and other strategic ties We should improve knowledge of each other's markets. India is a continent and like the EU, it is not a fully integrated market. It is not the same to do business in the state of Maharashtra or in the state of Rajasthan. Taxation for instance is not harmonised across India and this has been one of the major problems impacting foreign but also Indian companies. The approval of the GST- Goods and Services Tax is a major step in the good direction. However, implementation will be critical. We are a bit concerned about how the different rates will be applied and how they will impact on European goods that are in general more expensive as they are subject to import duties when entering India. Ideally the conclusion of a Free Trade and Investment Agreement would promote closer economic integration between the EU and India. However, for the moment it seems conditions are not met to relaunch negotiations. India's recent decision to terminate the Bilateral Investment Agreements that it has with EU member states is also not conducive to more investment and trade. Companies need a stable legal environment and they need to feel their investments are properly safeguarded. Uncertainty in this area has normally a very negative impact on investment flows. What are some sectors of mutual interest you would like to highlight Both India and the EU have an interest in developing sectors that address societal challenges. Areas related to green economy, resource efficiency or how to address climate change offer a number of opportunities for EU and Indian companies to cooperate and expand together. Another important area is digital economy. We see this as an opportunity to leverage traditional sectors but also to generate new businesses that can be more inclusive, flexible and resilient. India still needs to make important investments in infrastructure. This is key to ensure a sustainable economic growth, attract new business and enhance FDI. EU companies can support this effort by bringing new technologies and expertise working in close cooperation with Indian companies.