Address by the Former Prime Minister Shri Atal Bihari Vajpayee at
the Third India-EU Business Summit at Copenhagen
October 9, 2002
Your Excellency, Prime Minister
Rasmussen, Commissioner Likanen,
I thank you for your warm welcome.
It is a great pleasure to be here in this beautiful capital of Denmark to
carry forward the India-EU Summit level dialogue, which we commenced in
Lisbon two years ago. I am delighted that the business summit has also
become an integral part of this dialogue, providing a high-level forum for
networking and in-depth exchange of business experiences.
A basic symmetry in our circumstances and some core values underpin the
India-European Union partnership. We are both global actors in a multi-polar
world. We are large multicultural and multilingual federal entities with
strong regional identities. We value democracy. We recognize the virtues of
consultations and consensus in a multilateral approach. These are the
political values that drive our economic progress and social development.
Our dialogue touches upon major issues of the world. We are partners in
promoting global peace and security. We agree that the pre-eminent
challenges before the international community are poverty alleviation and
The European Union is of great importance to us as India’s largest trading
partner accounting for about quarter of our external trade. It is the
largest overseas investor in India. Much of its investment is in high
Conversely, we believe Europe’s governments and businesses see the immense
potential in India, given the synergies for business collaboration and
The Indian economy has been living up this expectation. It is today the
world’s fourth largest economy. Our annual average growth has been over 5%
since 1980. It is the highest ever achieved over a comparable period by any
democracy in the world. In the first quarter of this fiscal year, our
economic growth has been over 6%.
This is not a mean achievement in an uncertain post-September 11 environment
marked by nervous global markets, rising oil prices and falling commodity
prices. It has been achieved also in the fact of a relentless and sustained
terrorism in parts of our country – masterminded from across our borders and
designed to create political turbulence, economic disruption and social
Our economic fundamentals remain strong. Inflation is in the low single
digit range. Our foreign exchange reserves of over 13 months of import cover
are among the world’s highest. There are encouraging signs of an industrial
recovery. Exports are picking up. Our food reserves of over 60 million tones
have easily offset the shortfall in agricultural production due to the
deficient rainfall this year.
India has one of the fastest growing telecom, insurance, and financial
services markets in the world. Our strengths in IT and biotechnology are
well known. Our laws are transparent. Our judicial system is impartial and
experienced in the ways of a market economy. Our markets and our skilled
work force continue to grow. Our goal is to achieve an average annual growth
rate of 8% over the next five years.
The continued investor confidence in the country is reflected in the highest
ever inflows of foreign direct investment last year. Unlike those in other
countries, our official foreign investment figures do not include reinvested
earnings and overseas commercial borrowings. The International Finance
Corporation has recently pointed out that if these are included, India
attracts about 8 billion dollars of FDI annually – or about 1.7% of its GDP
– which compares favourably with other developing countries.
We often hear critical comments about the pace of our reforms. But remember
that the same sub-continental size and population, which makes India an
attractive market, also accommodates a diversity of perspectives, interests
and needs. There are vast disparities in incomes and living conditions.
A democratically elected government has to be sensitive to these realities.
Public accountability and a social conscience have to govern its actions. It
cannot adopt a shock therapy approach to economic reform. To borrow a
metaphor from an earlier era and a different political context, what we are
trying to implement is economic liberalization with a human face.
Our approach is vindicated by the fact that among the countries which
liberalized their economies in the early 1990s. India alone moved to a
higher growth trajectory without an interim period of recession.
Europe also confronted the reality of its diversity during its debates on
integration, enlargement, single currency, and common foreign and security
policy. You discovered that only a process of consensus with participation
of all the principal stakeholders can generate sustainable policies. You can
therefore understand our perspectives.
It has become the fashion these days to liken economies to real and mythical
creatures like elephants, tigers and dragons. The Indian economy is often
identified with the elephant. I have no problem with the analogy. Elephants
may take time to get all parts of their vast bodies moving foward in unison.
But once they actually start moving, the momentum is very difficult to
divert, slow down, stop or reverse. And when they move the forest shakes.
Of course, some shortcomings still disappoint the expectations of our
overseas business partners. We are moving to rectify them. We are building a
national consensus on labour reforms heeding the needs of both business and
labour. High-priority infrastructure projects are being given special
attention. We know that foreign investors are often vexed by an excess of
procedure, paperwork and bureaucracy. This is not a malaise unique to India.
We are trying to tackle it with a national programme involving e-governance.
India’s growing markets in a liberalizing regime and the European Union’s
thrust for expansion and diversification provide rapidly growing prospects
for India-EU cooperation.
India can benefit from the modern manufacturing technologies developed in
Europe to rejuvenate traditional industries like steel and textiles.
Similarly, there are synergies between our respective small and medium
enterprises. Your technologies can link up with our cost effective human and
other resources. We are enacting a new Intellectual Property Rights regime
in India, which would afford protection to the foreign technology exporter,
fully in line with WTO commitments.
In the social sector, India and EU have cooperated in tackling poverty and
backwardness. We appreciate the EU programmes in India for universalization
of elementary education and improvement of health services among
disadvantaged population groups.
In the knowledge-based industries of the new economy, the EU can leverage
the opportunities, which India can offer. There are also objective factors
encouraging cooperation in services. But for an optimum exploitation of
these opportunities, the EU would have to show the same commitment to free
mobility of skills as it does to free movement of capital and services.
We cannot view cooperation between India and the European Union without
reference to our shared commitment to building a world free of disparities
and with equal opportunities for all nations.
The global economy is facing a prolonged slowdown. This is not merely
because of the cyclical nature of business. Its roots run deeper into the
structural imbalances of the global economy. It is widely accepted that the
most reliable stimulus for sustainable growth of the developed economies is
their constructive engagement with the developing countries. This economic
engagement has to be consistent with the preservation of their environmental
resources, social values and cultural identities.
The underlying philosophy of this form of engagement is not charity. It is
simply enlightened self-interest. Today, the development deficit from the
uneven spread of the benefits of globalization threatens the sustainable
prosperity of the developed countries.
The best minds of India and Europe have proclaimed this vision, but its
realization has eluded us. In the 21st century, we cannot afford the
consequences of failure in this endeavour.
We hope the EU would address the concerns of the developing world on these
matters. A starting point could be the dismantling of the high agricultural
subsides, which greatly harm the growth prospects of developing countries.
We also have a serious problem with non-tariff barriers against developing
country products on ostensible environmental or social concerns. Other
developmental linkages can follow.
Europe has taken an epoch-making step this year by adopting a single
currency. It soon goes in for enlargement. We hope these steps will act as a
stimulus for Europe’s economic growth. We also hope that the consequent
spurt in intra-Europe economic activity will synergize opportunities for its
I thank the Danish Confederation of industries and other organizers of this
Summit meeting for giving me this opportunity to speak to you. The
globalizing world demands a new thrust to the India-EU economic and
commercial partnership. Our governments and businesses should come together
to generate this thrust. India is willing to make this effort.
October 09, 2002