EU plans agriculture initiative; two-way FDI on upswing

New Delhi, Nov 2 (UNI) The European Union (EU) is working on a major initiative relating to the agricultural sector, which will boost exports from India, even as the two-way flow of Foreign Direct Investment (FDI) is poised for a big leap forward.

Informed sources said that some countries of the EU are backing the agricultural proposal, especially Germany, and pushing with the European Commission in Brussels to bring down subsidies in the farm sector, a bone of contention.

The sources said German companies are making a bee line for investments in India in the fast growing auto and auto ancillaries sector.

They said as many as 100 German companies have drawn up plans to put their money in India and strengthen their hold on the fast growing Indian auto component sector. The other sector where Multinational Companies from Germany are planning to hike their stakes or make fresh investments relates to the pharmaceutical sector.

Mr D Kebschull, Chief Programme Co-ordinator of EU- India Trade and Investment Development Programme(TIDP), however, felt that progress relating to the India- EU Strategic partnership would move forward, though not at the desired pace. This is because the membership of the EU will grow to 27 in the new year, and Europe will be engaged in working out this new relationship. "It will not be fortress Europe, but one which will pay greater attention to a successful transition to an enlarged EU," he said.

Yet, European companies realise the potential of the Indian market and the fast growth of the economy. "They would not like to miss the opportunity that is India," Dr Kebschull remarked.

Asked whether German automotive companies found India a profitable market, Dr Kebschull replied in the affirmative.

He said some of them were planning expansion and those that had low volumes made up in terms of high mark ups.

Dr Kebschull, who for many years now has been involved in promoting trade and investments from India to Germany, said the two-way FDI flow was poised to increase. Many Indian companies were going to Europe and Great Britain has been a preferred destination.

They would find it worthwhile to invest in small and medium companies or enter this segment with fresh projects.

The European companies were planning to setting up maufacturing facilities in India for the local market as well as for exports.

Meanwhile, the European Union Delegation with the Ministry of Commerce has embarked upon a 'Trade and Investment Development Programme (TIDP)', under which Investment Facilitation Desks are being established at four regional centres-- Delhi, Kolkota, Mumbai and Chennai. They will serve as a one-stop point for all EU investors in India and assist them in filing applications and getting necessary approvals. PricewaterhouseCoopers is the consultant to this project.

Mr Amrit Pandurangi, Executive Director, PricewaterhouseCoopers, is of the view that the EU investors need to be fully aware of the advantages and difficulties of investing in India.

Detailed presentations were made yesterday on the occassion of the launch of the facilitiation desks. These related to investment opportunities in the leather, auto components, IT and ITES (IT enabled services) and food processing sectors.

Mr A Sahasranaman of TIDP highlighted the enormous opportunities in the leather sector, particularly for countries of the EU, such as Italy, France and Spain.

Mr A K Taneja of Auto Components Manufacturers Association (ACMA) gave a presentation on the scope for FDI and Joint Ventures in the auto component sector.

Presentations were also made relating to the food processing and agricultural sectors as well as the role played by Software Technology Parks of India.

UNI GS PV VV1603