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The 15th
session of the Indo-German Joint Commission on Industrial and Economic Co-operation
was held here on 4th and 5th April 2005.
The German delegation was headed by Mr. Wolfgang Clement, Federal Minister
of Economics and Labour and the Indian delegation by Shri P. Chidambaram,
Union Minister of Finance.
Shri Chidambaram
welcomed the participants to the 15th Session of the Joint Commission
and he expected that this would further strengthen the bilateral economic
ties between the two countries and elaborate on new perspectives of collaboration
in promising fields like biotechnology, food processing and health care.
The following
are the salient features of the Joint
Statement issued at the conclusion of 15th Session of the Indo-German
Joint Commission :-
Shri Chidambaram
emphasized that the new government under the Prime Minister Dr. Manmohan Singh
was committed to continue further economic reforms aimed at sustaining high
and equitable economic growth in future.
The Indian
Minister informed that the Government is committed to liberalise its economy
with a view to improve its attractiveness as a hub for foreign direct investment.
The Indian
Government is committed to increase the competitiveness of Indian industry
and to transform the Indian economy in tune with the demands of globalization. In this context, Government of India attaches
particular importance to the strengthening of small and medium-sized companies.
The Indian
delegation highlighted that EU Regulations such as Registration, Evaluation
and Authorization of Chemicals (REACH) and the Directive on Traditional and
Herbal Medicine will adversely impact India’s trade with EU member countries
including Germany. It suggested that REACH Regulation may be implemented initially
on the most toxic substances and have greater clarity in procedures. It also
requested for recognition of Indian laboratories for testing for REACH.
The Indian
side also drew attention to the difficulties faced by Indian exporters of
agriculture and marine products due to differences in standards and procedures
applied by different countries as also the ever increasing stringency of standards.
Both sides
were in agreement about the key role played by industrial co-operation and
investment for the on-going development of Indo-German economic relations. They linked it with the hope that the decline
in German investment in India can be overcome as India’s economy continues
to grow strongly. Improvement of infrastructure in various fields is one of
the top priorities of the Indian government to which German companies could
make substantial contribution. Both
sides noted that the German investments in India are far below their potential
and could be substantially improved. In the view of both sides, the outlook for co-operation is particularly
promising in the fields of information technology, biotechnology, telecommunications,
electrical engineering, environmental technology, mechanical engineering,
chemicals, pharmaceuticals, food processing and modern technical services.
Both sides
stressed the need for co-operation between the industrial and business enterprises,
especially the small and medium enterprises of the two countries.
The German business representatives stressed their own positive assessment
of India as a partner for business. Especially,
small and medium-sized German firms have demonstrated this by organizing the
“Mittelstand goes to India” in February 2005.
Indian side highlighted the immense potential for co-operation between
German small and medium enterprises and Indian enterprises, especially in
product areas such as auto components, machine and hand tools, toys and pharmaceuticals.
With increasing concern about environmental sustainability, there is a huge
opportunity for strengthening Indo-German green business relations in areas
like auto-components, dye and dye intermediaries, textiles, chemicals, waste
utilization technologies and tapping of business potential arising out of
implementation of existing and future EU environmental directives like Registration,
Evaluation and Authorization of Chemicals (REACH).
The German
side complimented the Indian government to continue the policy of reforms
and to further improve the frame-work conditions for economic co-operation
between India, Germany and Europe. The
German side recognizes that important steps have already been taken in India
in recent years by enlarging the field of application of the automatic route
for FDI.
In view of
the recent policy measures taken by the Government of India, the German side
underlined its interest in deepening the co-operation in these fields of physical
infrastructure in which its expertise is renowned. This could be done in the frame-work of the
discussions to be held in the Working Group on Infrastructure in areas like
roads, power, airports, ports, telecommunication and environmental protection,
where Indian side sees good investment opportunities for foreign investors.
Both sides
saw opportunities for India to study the experience of Germany in production
and use of bio-diesel, in which Germany is a pioneer. It was noted that important technological work is being done in
Germany, from which India could benefit.
Both sides
appreciated the foundation of an Indo-German Science Circle initiated during
the visit of Federal Chancellor Mr. Gerhard Schroder to India in October 2004.
Both sides underlined the importance of increased exchange of scientists
and students for enhancing bilateral economic and scientific co-operation.
In this regard, the Indian side expressed the desire to have greater co-operation
on knowledge and service-based industries, which would encompass information
technology, bio-technology and the entertainment sector in order to give a
further boost to these sectors in the bilateral economic relations between
the two countries.
Both sides
underlined the expectation that the positive trend in bilateral trade witnessed
in 2004 will continue. Nevertheless,
the current level of Indo-German trade in goods and services does not reflect
the capabilities of their enterprises and the potential of bilateral trade
between the two countries.
The Indian
side pointed out that Germany should consider further simplification of business
visa procedures for facilitating the movement of software professionals and
making the official documentation required in Germany bilingual. They emphasized
the need for issuance of family re-union visas expeditiously and also requested
for facilitating early issuance of work permits.
Indian side suggested having an arrangement for avoiding payment of
social security taxes by short-term IT professionals.
German side expects that after coming into force of the new immigration
law with effect from 1st January 2005, these concerns would be
accommodated and the entry of highly qualified foreign professionals into
Germany would be facilitated.
Both the
German and Indian Governments acknowledged that in the coming years, knowledge-based
and infrastructure sectors will play an even more significant role in expanding
bilateral trade and industrial co-operation. These sectors are expected to play a key role
in realizing the announcement made by Chancellor Schroder and Prime Minister
Singh in autumn 2004 to double bilateral trade volume within the next five
years. For this reason, both countries
will promote regular visits of business delegations.
Both sides
identified information technology, bio-technology and nano-technology as promising
areas for future co-operation, which may also include research and development.
The Indian
side informed that the non-agricultural peak tariff rate in India has been
reduced to 15 per cent. in the Budget for the financial year 2005-06. They
pointed to the trend of reduction in import tariffs over the years.
Both sides
had a first exchange of views on the impact of the phasing out of the WTO
Agreement on Textile and Clothing on 31 December 2004. Since this would open up opportunities for
sourcing quality products at competitive rates, both countries would co-operate
to enhance their bilateral trade. The
Indian side requested for full support from the German side on the GSP PLUS
being equitable to India.
The Indian
side raised the difficulties faced by Indian Public Sector Enterprises due
to denial or delay in issue of export licenses by the Federal Office of Economics
and Export Control to German companies supplying specific technology equipments
or material to India. The German side
confirmed its willingness to hold bilateral export control consultations on
expert-level in order to foster better understanding of the German export
control policies.
In conclusion,
the two delegations emphasized the importance of the dialogue both between
government representatives from the two sides and between the business representatives
of the two countries for promoting industrial and economic co-operation between
India and Germany.
BSC/BY/CS-181/05
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15th Indo-German Joint Commission for Industrial and Economic Cooperation meeting concludes
