Global Times - Indian exporters face non-tariff barriers in EU trade

Indian exporters face non-tariff barriers in EU trade

Source: Xinhua
[15:59 August 03 2009]
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India's exporters are facing non-tariff barriers like visa and consular issues in the lucrative European Union (EU) market in spite of growing bilateral trade with the 27-member economic bloc, especially in the pharma and IT sectors, the president of a leading Indian commerce and industry federation said Monday.

Harsh Pati Singhania, President of the high profile Federation of Indian Chambers of Commerce and Industry (FICCI), said in an interview that Indian exporters face the adverse impact of the huge amount of subsidies enjoyed by EU farmers through free seeds and fertilizers and a freight subsidy to producers.

"In particular, many middle-sized India pharma companies have been severely hit due to the recent seizure of shipments at transit ports located in the EU. Moreover, the exporters face cumbersome quality testing which increases the cost for Indian companies," he added.

The EU being the strategic trade and Investment partner for India, commercial interaction between the two nations has grown exponentially since 2000. The current annual trade is 52 billion euros approximately and growing by more than three times between 2000 and 2008.

Coming to the IT sector, Singhania said that "Indian companies face difficulties in obtaining work permits for their professionals. While issuing work permits can take time, delays are rarely appreciated by clients in the EU who sign time-bound contracts and expect timely delivery."

"The main impediment in the expansion of services to the EU are visa and consular issues, and non-clarity of taxation and cross-border transaction laws as applicable to Indian service providers," he said.

But he said a majority of Indian exporters feel that the EU is a very attractive market and they are planning to expand trade with it in the next two years either by way of exploring new markets within the EU, setting up distribution centers or tie-up with existing market players to have a wider reach in the existing and new markets.

The FICCI president also said that in spite of the growing bilateral trade volume, the industry is unanimous in its opinion that there still exists a discrepancy between what is projected and what is experienced by Indian companies in the EU.