A3-0098/94

Resolution on economic and trade relations between the European Community and India

The European Parliament,

-having regard to its resolution of 22 January 1988 on cooperation between the EC and India,

-having regard to its resolution of 26 October 1988 on economic relations with the South Asian Association for Regional Cooperation (SAARC),

-having regard to the motion for a resolution by Mr De Clercq and others on economic and trade relations between the EC and India (B3-1075/92),

-having regard to Rule 45 of its Rules of Procedure,

-having regard to the report of the Committee on External Economic Relations (A3-0098/94),

A.whereas India, the second most populous state in the world, is not only the tenth largest industrialized country but also the second largest developing country,

B.having regard to the honourable tradition of democracy in India, which has been able since its independence in 1947 to maintain and strengthen its democratic institutions,

C.respecting the leading role which India has played in the non-aligned movement,

D.concerned at the recent internal disturbances in the Kashmir region and the tense relations between India and Pakistan, and reaffirming its support for a settlement of the Kashmir dispute based on UN resolutions,

E.deeply shocked at the ILO report of March 1993 noting, inter alia, that 15 million people in India, including 5 million children, are working as debt-slaves,

F.having regard to the importance of a stable political situation for the development of economic prosperity both in India itself and in its relations with its trading partners,

G.having regard to the wide-ranging cooperation agreement negotiated between the EC and India in December 1992, though this has not yet entered into force,

H.whereas the EC, as part of its development policy in favour of non-associated developing countries in Latin America and Asia, is continually supporting India's development by means of significant financial contributions,

1.Notes that respect for the principles of democracy and human rights forms the basis, recognized by both sides, for economic and trade cooperation between the EC and India;

2.Welcomes the negotiation of a wide-ranging cooperation agreement on partnership and development between the two parties, intended to replace the agreement concluded in 1981;

3.Calls for the rapid entry into force of this agreement, which will intensify cooperation between the EC and India and extend it to other fields;

4.Is confident in particular that the improvement of investment conditions for foreign investors and the protection of intellectual property which the agreement aims to achieve will constitute positive stimuli for the deepening of mutual economic relations;

5.Notes the decisive importance of the input of private investment capital -in the form of both technology transfers and the transfer of social innovations - alongside public development aid from the EC and other western industrialized nations and international organizations, for the realization of India's economic potential;

6.Urges the Indian Government to make a greater effort to enforce compliance with the ILO conventions in India, particularly those restricting child labour (Nos. 5 and 138) and prohibiting forced labour (Nos. 29 and 105), and to put an end to the inhuman practice of debt-slavery;

7.Stresses the strategic importance of expanding India's infrastructure, which, in the energy, transport and telecommunications sectors, threatens to become a hindrance to economic development;

8.Is therefore confident that liberalization in these sectors, which are mostly under state control, will be a valuable contribution to encouraging foreign investment;

9.Notes with satisfaction that the EC has become India's most important partner in terms both of foreign trade and of direct foreign investment;

10.Welcomes in this connection the unilateral reductions in customs and import duties implemented by India in the past few years, but notes at the same time that the Indian internal market is still protected by unusually high customs barriers;

11.Hopes that the successful conclusion of the GATT negotiations will serve to revive bilateral trading relations, particularly by means of further reductions in customs duties, gradual liberalization of the textile trade, the bilateral opening of the market in services, and the improvement of investment conditions (TRIMs) and protection of intellectual property (TRIPs);

12.Respects India's constructive attitude as a leading representative of the developing countries in the GATT negotiation process;

13.Welcomes the far-reaching economic reforms which began in 1991 in India, aimed at liberalizing and reducing bureaucracy in the Indian economic system, and notes the need to put these reforms into practice at federal state level as well as in regional and local administrations;

14.Acknowledges that the disintegration of the former Soviet Union means that India has lost an important former trade and development partner, thus intensifying the need for economic reform;

15.Welcomes in particular the abolition of compulsory import permits for a variety of goods as well as the partial removal of the state monopoly in foreign trade;

16.Notes with satisfaction that the fundamental economic situation in India has improved considerably, reflected in a fall in inflation and in the national budget deficit and in the stabilization of the balance on current account and of foreign exchange reserves;

17.Urges India to pursue its current course of economic policy reforms, and in particular to improve conditions for foreign investment by the conclusion of investment protection agreements, and to improve the protection of intellectual property by the adoption of effective national legislation;

18.Notes the strategic importance of India as a leading economic and political power in Southern and South-East Asia;

19.Regards the institutional form given to regional cooperation in the South Asian Association for Regional Cooperation (SAARC) as a hopeful step on the way towards the political stabilization and economic development of Southern Asia;

20.Calls on the Commission to give particular attention, in its cooperation with India, to regional cooperation aspects;

21.Instructs its President to forward this resolution to the Commission, the Council, the governments of the Member States and the government and parliament of India.