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India is the 8th largest exporter to the EU

The European Union EU and India are committed to further increase their trade flows Monique Pariat Deputy Director General of DG Agriculture and Rural Development European Commission talks about government intervention to further strengthen India-EU trade relations

Monique Pariat
European Commission
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What transformations have you witnessed in Indian agriculture sector over the last decade?
Agriculture remains one of the most critical sectors in India as it provides employment to over 50 percent of the population. The Indian agriculture has transformed significantly during the last decade and enjoys a significant footprint in global agricultural production of many commodities. Post liberalisation, India has witnessed a structural change in the composition of the sector by diversifying the agricultural base to horticulture, livestock, fisheries and non-farm sector to meet the immense opportunities in domestic as well as export markets. India’s agricultural exports have increased steadily, from 5 percent in 1990 to 16 percent in 2012, creating incredible opportunities in the agri-value chain – especially in the food processing sector. Further, modernisation of Indian agriculture has been witnessed during the last 10 years and the regulatory environment is changing to stimulate private sector participation in addressing the critical challenges in agri-value chains.

How do you view the EU- India trade relations strengthening further?
With regard to EU-India, agricultural imports from India to the EU have been increasing over the past few years and stand at about € 2.7 billion. India supplies most of total EU imports of basmati rice, while other major Indian agricultural goods entering EU markets include coffee, tea, fruit and nuts, vegetables, spices and marine products. The EU is currently a modest partner for India in agricultural trade, but one with a big potential. EU exports to India over the last decade have been oscillating around € 250-300 million. As the current figures of agri-food trade balance between EU and India show, there is a big margin for improvement for EU exports to India in this sector.

In 2013, EU imports of goods originating from India represented 2.2 percent of total imports. This makes India the 8th largest exporter to the EU. There are certainly margins for India to increase its exports share to the EU particularly if the announced economic reforms will be translated into a higher output in manufacturing and in overall important gains in productivity.

However it is true that – because of import duties and import regulations – some products are out of reach in terms of price, or are simply not available to Indian consumers. I do think it is our mutual duty towards consumers to make sure that they are able to get hold of and enjoy EU produce at a fair price. And of course the same goes for EU consumers who want to enjoy Indian produce. We hope the bilateral FTA (BTAI) will ease the flow of food produce between the EU and India by reducing import tariffs and cutting any unnecessary red tape. The best opportunity to increase its share of EU trade will be with the conclusion and implementation of an ambitious bilateral free trade agreement.

The EU has recently launched its ‘Taste of Europe’ campaign in India. What insights have you gained about Indian consumer and how are they evolving?
International cuisines are increasingly available in India and these restaurants are doing a great job of introducing Indian consumers to the global palette. Also with many Indians travelling to Europe and being exposed to new tastes, there is increasing demand for authentic European products and ingredients in India. Moreover, all over the world consumers are increasingly interested in the quality of food and in the circumstances of its production. This is valid for India, as well.

Some European countries are currently facing slowdown. Do you witness any dip in the imports by the EU?
The EU is the first trading partner of India. Total bilateral trade in goods has increased enormously between 2003 and 2013, passing from € 28 billion/year to € 72 billion/year. If we add trade in services, the total bilateral trade is in the range of 100 billion per annum. While in 2012 and 2013 the upward trend in trade growth has stalled, we do believe that with the stabilization of the economic situation in Europe and the resumption of robust growth rates in India, EU-India trade will also continue on an upward trend in the coming years.

What’s your take on the Indian import regulations and procedures? What kind of government intervention would you like to see in India?

India, like any other country, has an ambitious set of import regulations and standards. It is in India's interest as well as in the exporters' interest to streamline custom procedures and adopt measures to facilitate trade. In this respect, we have to remind that EU and India are engaged in negotiations for a bilateral Free Trade Agreement. Once concluded, this agreement will open new business opportunities both for EU and Indian companies and it will be major boost to EU-India trade. We know that the new Indian government has important plans in this respect, and we hope that they will be implemented swiftly.

India has certain challenges specific to regulations and procedures, food safety norms and labelling. How can these be addressed?
It is important to have a balance between, on the one side, the right to regulate food safety, establish appropriate labelling requirements and the general interest in protecting the consumers and, on the other side, the potential damages that, in some occasions, such requirements may have on trade flows in creating unnecessary trade barriers. In our view it is essential to have a constant dialogue on such issues and address them in an open and constructive atmosphere. The EU and India have established a network of bilateral committees and working groups where this kind of topic can be discussed and solutions proposed.

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