Final European Union India

8/3/2019 Final European Union India

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EFFECT OF FORMATION OF

EUROPEAN UNION ON INDIAS

FOREIGN TRADE AND INVESTMENTS

Done ByAmita Kachap

Amar KumarVivek Bakshi

Vivek AgarwalAditya Kannan

Malvika Rajesh BhagatSiddharth Sivapurapu

KV Siva Sandeep


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WHAT IS THE EUROPEAN UNION?

Shared values: liberty, democracy, respect

for human rights and fundamental freedoms,and the rule of law.

Largest economic body in the world.

Worlds most successful model for advancingpeace and democracy.

A unique institution Member Statesvoluntarily cede national sovereignty in many

areas to carry out common policies and

governance. Not a super-state to replace existing states,

nor just an organization for internationalcooperation.

Worlds most open market for goods and

commodities from developing countries.

27

7

30

490million

Member States

Combined

population ofEU Member

States

Percent of worldspopulation

Percent ofglobal GDP

55Percent of combinedworldwide OfficialDevelopment Assistance


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EU INDIA EXIM

EU imports from India came to 18.9bn in 2005covering mainly textiles and clothing,agricultural products and chemicals

EU exports to India amounted to 21.1bn, ofwhich the majority was machinery, chemicalproducts and gems and jewellery

Since 2001, bilateral trade between the two hasgrown by 11 % on average

In 2004, India's exports of services to the EUwere valued at 3.8bn, whilst the EU's exports ofservices to India came to 3.2bn


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EU INDIA EXIM Contd.

In 2005-2006, the EU was the main destination ofIndian FDI with one in four dollars invested by anIndian company going to the EU

Indian foreign investment to the EU has increasedfivefold in the last ten years

The EU invested 1.1bn in India in 2004, whichrepresented 1.4% of total EU outflows

EU investment has mainly taken place in the

power/energy, telecommunications and transportsectors

Indian textiles and clothing, a traditional stapleindustry, has significantly benefited from theremoval of textile quotas


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5

Some of the Indian companies in EU


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0

100

200

300

400

500

600

700

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

Imports Exports GDP

TRADEVALUE (BILLIONS, CONSTANT2000 DOLLARS)

Source:United Nations,UN COMTRADE database.

Indias Exports, Imports, and GDP


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0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Exports (from India to EU) Imports (from EU to India)

TRADEVALUE (BILLIONS, CONSTANT2000 DOLLARS)

Note: In 2004, the EU expanded from fifteen to twenty-five countries.Earlier data are for EU-15; post-2004 data are for EU-25.

Source:United Nations,UN COMTRADEdatabase.

The Evolution of India-EU Trade


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Change in Indian Imports and Exports

under Different Trade Agreements

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Doha India-EU FTA India-U.S. FTA India-China FTA

Imports

Exports

CHANGE (BILLIONDOLLARS)


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Top 10 EU investorsFrom August 91 to Sept 05

Country US$ bn

Netherlands 1.95

UK 1.90Germany 1.32

France 0.77

Sweden 0.472

Italy 0.467Denmark 0.15

Belgium 0.14

Cyprus 0.084

Finland 0.043

Breakdown of EUs Trade with

India From August 91 to Sept 05 -EU countries accounted for21.08% of total FDI

Top 10 EU countriesaccounted for 20.54% oftotal FDI

Top 10 EU countriesaccounted for 97.45% of

total investments from theEU


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Country US$ bn

Netherlands 1.95

UK 1.90

Germany 1.32France 0.77

Sweden 0.47

Italy 0.46

Denmark 0.15Belgium 0.14

Cyprus 0.084

Finland 0.043

INDIAS INVESTMENTS IN EU

SECTORS INCLUDE

Science & Technology

Infrastructure

Agriculture

Industry

Business Process Outsourcing

(EasternEurope)


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INDIA EU FTA

EU is Indias largest trade partner

India is EUs 5th largest trade partner outsideEurope

India in talks with EU over an FTA since 2007 Speculation is that it may be finalized by Q1 2012

Last India EU summit held in Brussels on 10th Dec2010

Some opposition too to this proposed FTA as there islack of transparency

Also fear of some domestic industries particularlyautomotive being in danger


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The present condition.

Trade in services

EU services exports to India 2010: 9.8 billion

EU services imports from India 2010: 8.1 billion.

Foreign Direct Investment

EU outward investment to India 2010: 3.0 billion

Indian inward investment to EU 2010: 0.6 billion

EU-India trade has grown impressively and more thandoubled from 28.6billion in 2003 to over 67.9 billion in

2010. Trade in goods

EU goods exports to India 2010: 34.7 billion

EU goods imports from India 2010: 33.2 billion


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Trade Implications

Single set of tariffs, trade rules, andadministrative procedures for and to allmembers

India needs to negotiate with only one interfaceto gain access to 27 different nations India also needs to be more competitive since

the EU has over 30 FTAs worldwide

EU tariffs much lower from an earlier average ofaround 9% to around 3.5% now Dealing with one interface and exporting in

larger quantities, India could exploit economiesof scale on shipments


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Indias trade with EU has the potential to reach awhopping $ 572 billion by 2015 once the FTA withthe 27 Nation bloc is implemented.

The India-EU FTA is likely to be fully implemented

by 2015, when Indias trade in goods with the bloccould be around $ 251 bn and trade in services $321billion.

Going by the Study EU trade would account formore than 25% of the countrys GDP which maygrow up to over 2 trillion dollars if 10% economicgrowth is achieved and maintained.At present itsless than 10%

FUTURE PROSPECTS


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THANK YOU

Final European Union India

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