Committee on International Trade NOTICE TO MEMBERS

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1 EUROPEAN PARLIAMT Committee on International Trade NOTICE TO MEMBERS Subject: Report of the delegation of the Committee on International Trade to India (Delhi, Pune and Mumbai) on October 2013 (28 October-1 November 2013, including travelling days) CM\ doc PE v01-00 United in diversity

2 Summary A delegation of the INTA Committee visited India (Delhi, Pune and Mumbai) from 29 to 31 October The delegation was led by INTA Vice Chairman Pawel Zalewski (EPP) and comprised the INTA Standing Rapporteur for relations with India, Maria Badia i Cutchet (S&D), INTA Members Ines Vaidere (EPP), Niccolo Rinaldi (ALDE), David Campbell- Bannermann (ECR) as well as Member of the European Parliament's delegation for relations with India, Anthea Mcintyre (ECR). The primary purpose of this delegation visit was to gain first hand information from the Indian government, Parliament representatives and various stakeholders (including economic operators and Civil Society) on the remaining gaps for reaching a political agreement on an EU-India free trade agreement and on India's position - as a key player - in the final round of negotiations leading toward the 9th WTO Ministerial meeting in Bali at the beginning of December. At the same time, the delegation conveyed the European Parliament's expectations regarding a possible EU-India trade agreement as well as the work of the WTO as expressed in recent resolutions, notably the EP resolution on state of play in the EU-India Free Trade Agreement negotiations of 11 May 2011 and the EP resolution on the state of play on the Doha Development Agenda and preparations for the Ninth Ministerial Conference (as voted in INTA on 14 October The delegation met with Members of the Standing Committee on Commerce of the Indian Parliament as well as with a wide variety of stakeholders of the EU-India Free Trade Agreement ranging from NGOs working on access to medicines and fight against child labour to European and Indian businessmen, Indian trade associations (such as the Cotton and Textile Export Promotion Council) and representatives of leading Indian and European companies. Main issues discussed were India's IPR regime, market opening of the automotive sector, India`s role in the WTO, India`s fight against child labour (and a possible sustainable development chapter of the trade agreement) as well as the general business climate in India. The visit included a field trip to Pune were the INTA delegation had meetings with high representatives of a leading Indian and a leading European car manufacturer, in order to discuss the issue of liberalising car and car-parts sector, which is one of the main challenges for concluding the Free Trade Agreement (FTA). PE v /12 CM\ doc

3 Details DELHI Tuesday, 29 October 2013 Briefing by EU Delegation in Delhi with Mr Pavel SVITIL, Deputy Head of Delegation, and Maurizio CELLINI, Head of Trade section The visit started with the INTA delegation being briefed by the Deputy Head of Delegation, Mr Svitil, on the overall state of the political relations with India and the head of the trade section, Mr Cellini, on the commercial relations with India and the ongoing negotiations on an EU-India Free Trade Agreement. Mr Svitil highlighted the importance for India of the food security debate in the WTO, and, in this context, mentioned the anti-us rhetoric in the Indian media as well as a general hostile climate to free trade in India. He also explained that the EU has difficulties to be perceived and to be understood by Indian decision-makers as the government for various reasons favors bilateral relations with key EU countries. Meeting with EU Member States Ambassadors and/or Trade Counsellors The meeting was followed by a discussion with EU Member States Ambassadors and Trade Counselors of EU Member States. More than half of EU Member States were represented at this meeting (Bulgaria, Belgium, Cyprus, Czech Republic, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Slovenia and Romania). The discussions with the Members of the delegation underlined the complexity of the country, the strong role of the Ministry of External Affairs in all relations with representatives from other countries (as well as the Ministry's resource limitations being very small in terms of staff for a country of the size of India) and touched upon varying perception of the different Member States on the possibility to conclude a FTA between India and the EU. Meeting with the Secretary-General of Centre for International Trade, Economics & Environment (CUTS) Mr Pradeep Mehta The INTA delegation had an exchange of views with Mr Pradeep Mehta, an experienced trade-policy analyst, who was part of the panelists for the report commissioned by the former WTO Director-General, Pascal Lamy, on "the future of trade". He mentioned in his presentation a variety of reasons, why the negotiations on the EU-India FTA are not moving forward: (1) India considers that it has not benefitted from previously signed bilateral trade agreements, such as the one with Thailand, which explains the cautious and rather negative stance of Parliamentarians and media coverage concerning an EU-India trade agreement. (2) India embarked on a "looking East" policy. He outlined also the importance for India to maintain its patent law - fully in line with TRIPS commitments - and referred to the multilateral negotiations on investment in the context of the OECD. Furthermore, the discussions touched upon India's position in the WTO negotiations, whereby the question of subsidies for the agricultural sector is key ("food security bill"). India requests CM\ doc 3/12 PE v01-00

4 a solution, which is valid longer than the currently proposed two years "peace clause". In his arguments, he stressed that the need to put emphasis on the potential consumer benefits of trade agreements, and he referred to the recent Indian legislation on education. Regarding a possible conclusion of the TTIP between the EU and USA, he voiced strong skepticism about its feasibility. Working lunch with civil society (NGOs) on combating child labour, access to medicines and fair trade At the meeting a broad variety of civil society representatives were present working mainly on combating child labour and access to medicine issues (such as "Medecins sans frontières" (MSF), "Butterflies", ILO Subregional Office for South Asia, Institute of Social Science Society, Fair Trade Forum, Global March against child labour, Center for Education and Communication, Asian center for human rights, child labour, juvenile justice and child rights, Delhi network of positive people, Global Health Advocates India, "Shakti Vahini" (child labour and trafficking). The discussions with the Members of the Delegation provided valuable insight about the challenges to combat child labour in India, notably remaining legal gaps to be addressed, ministerial coordination problems, and issues related to understanding and enforcing of existing legislation. The debate on fair trade touched upon about the situation in rural areas and farmers in the country. As regards access to medicine, MSF presented its concerns regarding certain draft provisions of the IPR chapter of the trade agreement, while some other NGO called for a complete deletion of the chapter. Members stressed in their discussions the importance for the European Parliament of a sound and ambitious sustainable development chapter in a possible trade agreement and the work carried out on "access to medicine" by a specific working group in the European Parliament established on this matter. Meeting with the Standing Committee of Commerce of the Indian Parliament The INTA delegation was received by a large number of Members of the Standing Committee of Commerce, composed of Members of the Upper (Rajya) and Lower (Lok) House of the Indian Parliament. The meeting, chaired by Mr Rangasayee Ramakrishna, touched upon a variety of issues concerning a possible FTA between India and the EU. Members of the Indian Parliament highlighted their preferences for investment over trade to stimulate the Indian economy, while Members of the INTA Delegation pledged to pass the pending legislation on insurance, which constitutes a pre-requisite for the EU to advance negotiations on market opening of the services sector. Members of the INTA delegation dispelled some misconceptions about the EU and its policies, while the Members of the Indian Parliament shared their views on the WTO negotiations. High Tea with European and Indian business representatives (including FICCI, CII and EBTC) Representatives of European companies in India (as well as the European Business and Trade Council, EGTC) shared their view on the on-going negotiations for a FTA between the EU and India, mostly expressing some kind of optimism that an agreement could be reached. Many representatives underscored positive economic developments in India, such as a PE v /12 CM\ doc

5 booming food belt due to higher prices for agricultural goods and a flourishing pharmaceutical industry. The discussions with the business community also pointed to the need for India to attract more FDI and the lack of understanding of media and business people of the importance of the EU for India. The need to fasten public procurement procedures as well as India s efforts in the domain of energy efficiency were also touched upon in the debate between Members of the INTA delegation and the business representatives from various sectors (car-parts, telecoms, aviation, pharmaceutical etc ). Wednesday, 30 October 2013 Visit of the TATA automotive plant in Pune PUNE The INTA delegation was received at the Pune automotive plant, where it got a comprehensive insight of the history and development of the TATA Group, which is closely linked to the development of an independent Indian nation. TATA Motors is one of the leading Indian car makers, and owns also the famous British brands of Jaguar and Land Rover as well as Daewoo trucks. Members of the INTA delegation learnt that the import-content of the cars and utility vehicles is very low (ranging from 2-3%). While the group managed to put the British brands of Jaguar and Land Rover back on a growth path production of its own cars TATA in India is down as the company is hit even more severely than most of its competitors by slower growth in the automotive sector in the recent years. The INTA delegation was taken on a guided tour through the production site, where it did not only got an insight into the production methods of the company, but also an explanation of the exemplary social benefits and achievements the TATA Motors provides. The visit was followed up with a working lunch with a senior plant manager, where many aspects of a possible FTA were discussed more in depth. Visit of the VW automotive plant in Pune After the working lunch at TATA Motors, the INTA delegation headed to the VW plant in Pune, which constitutes one of the largest FDI in India by a European company in recent years. A detailed presentation on the Indian car market, the development of the Volkswagen Group in India and tariffs for cars and car-parts, which affect VW production in India directly, were given to the Members of the INTA delegation. The representatives of Volkswagen India stressed that they were openly supporting an FTA with the EU (as this would allow bringing their production costs down in India). Members of the INTA delegation were also informed about the difficulties to export from Pune to other regions as an important part of the production is dedicated to exports due to infrastructure deficiencies. Discussions focused on the challenges to set-up a plant in India, labour costs as well as competitiveness of Volkswagen production in Europe compared to India. Following the presentation and debate, Members were given a short tour of the plant learning more about the production methods and VW s efforts to train and maintain skilled labour. CM\ doc 5/12 PE v01-00

6 MUMBAI Thursday, 31 October 2013 Ceremony for the victims of 26/11 Mumbai Attacks The INTA delegation held a short ceremony to commemorate the victims of the Mumbai attack at the Taj Mahal Palace Hotel. The terrorist attack, in which many people died (including in this hotel), occurred during the last visit of an INTA delegation to India. Participants signed a guest book in memory of the victims. Meeting with the TATA chief economist The INTA delegation was received by TATA s chief economist, Dr. Siddhartha Roy, who informed the INTA delegation about the particular structure of the company (1/3 of the profits going to a social welfare trust) as well of the varieties of business activities of the group ranging from airlines, automotive, food, hotels to telecoms. Asked about the company s position on a possible FTA between the EU and India, the chief economist explained that there was no TATA group position on a possible FTA, so he informed the INTA delegation about the official position regarding the negotiations of the Indian government. The discussions with Members focused on a possible bridging role TATA as an Indian company, which is operating globally, could play and the difficulties the company is facing regarding visas for its workers (and the lack of single EU-wide working permit). Dr. Roy pledged for "harvesting the early birds" in a FTA by focusing on the part, where the EU and Indian economy are complementary. In his view, more difficult parts could be left to be agreed upon later. Meeting with the Strategic Foresight Group Following the meeting with the TATA Group, the INTA delegation headed north of Mumbai to meet with Dr. S. Waslekar, President of the Strategic Foresight Group (SFG), a think tank and policy advisory body. Dr. Waslekar reported on the activities of the SFG and put the ongoing trade negotiations into perspective of India's foreign policy and its aspirations to become a "great power". He gave his view on how the EU is perceived in India, thereby, stressing a lack of understanding of the EU and a media perception (due to the euro crises) of a weakening EU. Meeting with the Indian Pharmaceutical Alliance The programme continued with a meeting with the Indian Pharmaceutical Alliance, chaired by Mr D.G. Shah, Secretary General of the Alliance. The Indian Pharmaceutical Alliance represents 60% of the Indian pharmaceutical industry. The representatives gave a presentation about the development of the Indian pharmaceutical industry, in particular its export growth and its strong investment activities, followed by a detailed description of the regulatory environment for protecting intellectual property rights (IPR) in India and globally. The PE v /12 CM\ doc

7 Alliance reported on the strong IPR regime in India, in particular the very prudent use of compulsory licensing. Members of the INTA delegation underscored in the discussions that they are not only aware of, but also themselves active on the issue of "access to medicines". In this context, Members stressed that the EU has no intention to change Indian patent law through concluding an FTA with India. The Alliance highlighted the need to be better informed by the Indian government on the current negotiating texts, in particular concerning IPR, and informed about an on-going court procedure to get access to the negotiation documents. Meeting with Members of the Cotton Textile Export Promotion Council The INTA delegation met with a large delegation of representatives of the Indian Cotton Textile and Export Promotion Council. The representatives of the Indian Cotton Textile and Export Promotion Council outlined their positive attitude towards a possible FTA with the EU and showed an interest in its rapid conclusion. They also mentioned an increasing interest in India for EU clothing, which means that an FTA would clearly be a win-win situation for the EU and Indian textile sector based on reciprocal full duty elimination. The discussions with Members of the INTA Delegation focused on the sustainable development chapter of a possible FTA and counterfeiting in India. Concerning a sustainable development chapter the representatives of the Indian Cotton and Textile Council claimed that India is following all ILO conventions on labour rights and child labour in the cotton sector is not a major issue. In this context, they referred to a lack of skilled tailors as people increasingly preferred "white collar jobs", so, in their view, wages in the sector most increase to retain skilled labour, whereby strong trade unions can play a positive role in this process. The debate touched also upon the GSP+ preferences to be granted to Pakistan soon. Working dinner with representatives of European industry At the end of the programme, the INTA delegation met with representatives of European industries to discuss EU-India trade relations. The business representatives reported on the remaining gaps to reach an agreement and the lack of outspoken and large support by Indian business in favour of a possible FTA. During the exchange of views, the participants discussed the currently difficult business climate in India and a possible impact of the elections on bringing forward an economic reform agenda. The discussions showed that all participants seemed to agree that the prospects of concluding a FTA within the next months are very low, however, efforts to boost EU-India trade relations should continue. CM\ doc 7/12 PE v01-00

8 PROGRAMME of the Delegation Visit to India (Delhi-Pune-Mumbai) 28 October - 1 November 2013 DELHI Check-in at Monday, 28 October Individual arrival of Members (from various destinations) Preparatory meeting between EP INTA Secretariat and the EU Delegation for India Venue: Taj Mahal Hotel 1 Mansingh Road New Delhi HOTEL: Taj Mahal Hotel 1 Mansingh Road New Delhi Tuesday, 29 October Meeting in hotel lobby and bus transfer (Coach No.DL1PC 4897, Driver: Mr.Balkishan, ) Briefing by EU Delegation in Delhi, Mr. Pavel SVITIL: Deputy Head of Delegation Mr. Maurizio CELLINI: Head of Economic and Commercial Affairs Mrs Anne MARCHAL: Head of Political and Public Affairs Section Venue: EU Delegation 65, Golf Links, New Delhi Meeting with EU Member States Ambassadors and/or Trade Counsellors Venue: EU Delegation 65, Golf Links, New Delhi Meeting with Mr. Pradeep Mehta, Secretary General, CUTS Centre For International Trade, Economics & Environment Venue: EU Delegation 65, Golf Links, New Delhi Working lunch (offered by the EU Delegation) with civil society on "access to medicine" and "fair trade" Venue: EU Delegation 65, Golf Links, New Delhi PE v /12 CM\ doc

9 14.30 Bus transfer to next meeting Meeting with the members of the Standing Committee on Commerce of the Indian Parliament (INTA Delegation + Mr. Pavel SVITIL: Deputy Head of Delegation, Mr. Maurizio CELLINI: Head of Economic and Commercial Affairs) Venue: Room n. 63, first floor Parliament House, New Delhi Bus transfer to next meeting "High Tea" with FICCI (Indian Chambers of Commerce), CII (Confederation of Indian Industry), European Business and Technology Center and Trade Unions hosted by EU Deputy Head of Delegation Venue: EU Delegation 65, Golf Links, New Delhi Bus transfer to hotel Taj Mahal Hotel, 1 Mansingh Road Free dinner PUNE Wednesday, 30 October Meeting in the hotel lobby and Hotel shuttle bus to airport 8.30 Internal flight from Delhi to Pune: 9W365 8h30-10h35 (Departure from Terminal 3) Pick-up by rental bus Bus transfer to next meeting Visit of TATA Motor Plants Venue: TATA Motor Plant/Tata Motors Ltd. TELCO ROAD, Near KSB Chowk, Pimpri, Pune :30 Arrival at Works in Pimpri MIDC welcome, tea/coffee, corporate video, introduction 12:00 Plant Visit with explanatory commentary 13:30 Lunch & interaction Bus transfer to next meeting Meeting with the VW India in Pune and visit of the VW plant Venue: Volkswagen India Private Limited, E1, MIDC Industrial Area (Phase III), Village Nigoje Mhalunge, Kharabwadi, Tal: Khed Chakan Pune Contact: Jayesh Sule, Manager - External Affairs, mobile: Arrival of delegation to the Volkswagen India Plant Welcome Presentation by Volkswagen India Address by Chairman of the Committee on INTA CM\ doc 9/12 PE v01-00

10 16.35 Interaction Plant visit Tea Group Photograph Departure to Mumbai ca Check-in at Expected Arrival in Mumbai HOTEL: The Taj Mahal Palace & Tower Apollo Bunder Mumbai MUMBAI Ceremony for the victims of 26/11 Mumbai Attacks Venue: The Taj Mahal Palace & Tower Contact: Ms. Hiral Shah, Mobile: Meeting with Dr. Siddhartha Roy, Economic Advisor - Tata Group Venue: Bombay House 24, Homi Mody Street, Ground Floor, Fort, Mumbai Contact: Ms. Rukshana ( ) Bus transfer to next meeting/lunch Meeting with Dr S. Waslekar, President, Strategic Foresight Group Venue: Marriot Hotel, Juhu beach Contact: Priyanka Bhide, Communications Officer ( ) Bus transfer to next meeting Meeting with Mr. D.G. Shah, Secretary General of the Indian Pharmaceutical Alliance on pharmaceutical industry in India, access to medicine and generics production Venue: Council of EU Chambers of Commerce in India 3 rd floor Y.B. Chavan Centre, Gen. J. Bhosale Marg, Mumbai Bus transfer to next meeting Meeting with members of the Cotton Textile Export Promotion Council Venue: Malabar, Hotel Trident, Nariman Point, Mumbai , India Contact: Mr. Siddhartha Rajagopal, Executive Director, The Cotton Textiles Export Promotion Council ( ) Arrival of Delegation Introduction of delegates Welcome Address by Shri R.K.Dalmia, Deputy Chairman, Texprocil 16.50: Opening remarks by Mr.Pawel Zalewski, Leader of the EU Delegation Presentation by Texprocil: Indian Textile Industry & Indo-EU Textile Trade Discussion Vote of Thanks, followed by a High Tea PE v /12 CM\ doc

11 18.15 Bus transfer to hotel Working dinner with representatives of European industry, hosted by the European Parliament Venue: Taj Mahal Palace & Tower Contact: Dr. Renu Shome, Chair, Council of EU Chambers of Commerce ( ) Arrival of Guest Welcome Address Mr. Anupam Johri President, The Council of EU Chambers of Commerce in India Address Mr. Paweł Zalewski, Leader of the Delegation and Vice-Chair of the INTA Committee, Group of the European People's Party Remarks: Ms. Maria Badia i Cutchet Standing rapporteur for trade relations with India in the INTA Committee, Group of the Progressive Socialists and Democrats in the European Parliament- Member Discussion Vote of Thanks: Dr Benno Lueke Vice President, The Council of EU Chambers of Commerce Dinner End of official programme Individual departures Friday, 1 November *** CM\ doc 11/12 PE v01-00

12 COMMITTEE ON INTERNATIONAL TRADE DELEGATION TO INDIA (28 October-01 November 2013) LIST OF PARTICIPANTS MEMBERS # LAST NAME FIRST NAME GROUP 1. ZALEWSKI Pawel EPP 2. VAIDERE Inese EPP 3. BADIA I CUTCHET Maria S&D 4. RINALDI Niccolo ALDE 5. CAMPBELL BANNERMAN David ECR 6. MCINTYRE Anthea ECR INTA SECRETARIAT 7. RODAS Alberto INTA Head of Unit 8. LUTZ Felix INTA Administrator AGTS OF POLITICAL GROUPS 9. WILLIAMS Christopher S&D 10. PONDELEK Ursa ALDE 11. MUNGGOVA Jolana ECR PE v /12 CM\ doc