EU-India Trade and EU-India Trade and Transport IntegrationTransport Integration

Prabir DePrabir De

RIS, New DelhiRIS, New Delhi

TRANSBALTIC CONFERENCE 2010TRANSBALTIC CONFERENCE 2010

17-18 March 2010, Malmö, Sweden17-18 March 2010, Malmö, Sweden

Presentation OutlinePresentation Outline

Introduction Introduction EU – Asia trade EU – Asia trade

EU- India tradeEU- India trade EU-Asia transport linkages EU-Asia transport linkages Trade barriersTrade barriers India infrastructure projects India infrastructure projects Opportunities for Baltic Sea region for Opportunities for Baltic Sea region for

EU– India tradeEU– India trade

Rise of regionalism Rise of regionalism Regional trade agreements (RTAs) have increased by nearly Regional trade agreements (RTAs) have increased by nearly

five-fold over 1990-2008, from 86 in 1990 to 421 in 2008five-fold over 1990-2008, from 86 in 1990 to 421 in 2008 (WTO, 2009)(WTO, 2009)

Among the Asian countries, India leads with the largest Among the Asian countries, India leads with the largest number of FTAs (30), followed by Singapore (26), China and number of FTAs (30), followed by Singapore (26), China and Korea (22 each) and Japan (19). Korea (22 each) and Japan (19).

EU is India’s largest trading partner while India ranks as the EU is India’s largest trading partner while India ranks as the EU’s 10th most important trading partner and that trade in EU’s 10th most important trading partner and that trade in goods more than doubled over 2000-2008 (EUROSTAT 2009). goods more than doubled over 2000-2008 (EUROSTAT 2009).

In 2008, nearly 22% of total India’s exports went to the EU and In 2008, nearly 22% of total India’s exports went to the EU and 18% of India’s total imports came from the EU. 18% of India’s total imports came from the EU.

Top export destinations within the EU were Germany (26%) Top export destinations within the EU were Germany (26%) followed by the United Kingdom (16%) and Belgium (13%). followed by the United Kingdom (16%) and Belgium (13%).

Goods exports have grown at an average of 14% per year, Goods exports have grown at an average of 14% per year, particularly commodities and manufacturing goods. particularly commodities and manufacturing goods.

A large portion of India – EU trade is remained unrealized. A large portion of India – EU trade is remained unrealized. India – EU FTA negotiation has been slow. India – EU FTA negotiation has been slow.

India has high trade potential, India has high trade potential, but largely unrealizedbut largely unrealized

International trade in India is moving below International trade in India is moving below potential potential Global trade in 2006: US$ 350 billionGlobal trade in 2006: US$ 350 billion Global trade potential: US$ 680 billionGlobal trade potential: US$ 680 billion About 48% of trade potential is remained to be About 48% of trade potential is remained to be

realizedrealized Causes of high underutilization of trade are Causes of high underutilization of trade are

mostly economic in nature mostly economic in nature High trade barriers – both visible and invisibleHigh trade barriers – both visible and invisible Poor transportation linksPoor transportation links Inadequate trade facilitation measures Inadequate trade facilitation measures Lack of supply capabilitiesLack of supply capabilities

Poor infrastructure holding Poor infrastructure holding back India’s growthback India’s growth

Infrastructure in South Asian Infrastructure in South Asian countries is largely countries is largely inadequate and generally of inadequate and generally of poor quality.poor quality.

Infrastructure gap in South Infrastructure gap in South Asia in terms of the index Asia in terms of the index widened than narrowed.widened than narrowed.

South Asia’s growth potential South Asia’s growth potential will be realized only if we can will be realized only if we can narrow the infrastructure gap, narrow the infrastructure gap, not only between them but not only between them but also with the global best also with the global best practice. practice.

Laggard areas (pocket of Laggard areas (pocket of deficits) in South Asia need deficits) in South Asia need utmost importance so that utmost importance so that they can enjoy the they can enjoy the opportunities created by opportunities created by regional trade liberalization regional trade liberalization and integration. and integration.

CountriesCountries

19911991 20002000 20062006

IndexIndex RankRank IndexIndex RankRank IndexIndex RankRank

India India 3.483.48 5050 3.953.95 4949 4.494.49 5151

Sri Lanka Sri Lanka 2.572.57 6262 3.183.18 5656 4.354.35 5353

Pakistan Pakistan 2.392.39 6464 2.262.26 6868 2.892.89 6666

Bangladesh Bangladesh 1.831.83 7373 2.122.12 7171 2.52.5 7474

Nepal Nepal 1.291.29 8181 1.371.37 8181 1.381.38 8686

South Asia in Global Infrastructure Rankings: RIS Index

Source: Kumar, N. and P. De (2008), and RIS (2008)

India’s soft infrastructure grew much India’s soft infrastructure grew much faster than hard infrastructurefaster than hard infrastructure

ParticularsParticulars

19911991 20002000 20062006 AAGR (%)AAGR (%)

1991-20061991-2006

Railways length (1000 km) Railways length (1000 km) 62.4662.46 62.7662.76 63.4763.47 0.130.13

Road length (million km) Road length (million km) 2.352.35 3.323.32 3.853.85 5.325.32

Fixed line and mobile phone subscribers Fixed line and mobile phone subscribers (per 1,000 people) (per 1,000 people) 77 3636 128128 150.35150.35

Air freight (million tons per km) Air freight (million tons per km) 493.10493.10 547.65547.65 773.22773.22 4.734.73

Air passengers carried (million)Air passengers carried (million) 10.7210.72 17.3017.30 27.5327.53 13.0713.07

Air transport, registered carrier departures Air transport, registered carrier departures worldwide (million)worldwide (million) 0.120.12 0.200.20 0.330.33 14.8914.89

Container port traffic (million TEUs) Container port traffic (million TEUs) 0.150.15 2.452.45 4.944.94 266.01266.01

Electric power consumption (kWh per Electric power consumption (kWh per capita) capita) 295.02295.02 402.02402.02 457.32457.32 4.584.58

Electric power consumption (kWh) Electric power consumption (kWh) 255.65255.65 408.42408.42 493.78493.78 7.767.76 Note: AAGR – Annual Average Growth Rate (%)Source: World Development Indicators CD ROM 2009, World Bank

India needs huge investment in India needs huge investment in physical infrastructure developmentphysical infrastructure development

Supply side bottleneck Supply side bottleneck – Country’s – Country’s investment in pinvestment in physical infrastructure is very hysical infrastructure is very low - 4.86% of GDP in 2004-05low - 4.86% of GDP in 2004-05..

‘‘Deficit Deficit EEverywhereverywhere’’ (contrary to ‘India (contrary to ‘India Everywhere’ in Davos)Everywhere’ in Davos)

Shortfall in capacity in port and poor Shortfall in capacity in port and poor performance (avg. 24 box / hour performance (avg. 24 box / hour handling rate; handling rate; avg. avg. 3 days to clear a 3 days to clear a container vessel, 6 days to clear a container vessel, 6 days to clear a export consignment at port)export consignment at port)

Same repeat at airports (DelhiSame repeat at airports (Delhi, , MumbaiMumbai…………))

Planning Commission Planning Commission desired to raise the desired to raise the investments from 4.investments from 4.886% of GDP to 76% of GDP to 7.5.5% in % in the 11th Five Year Plan (the 11th Five Year Plan (FYP)FYP) period. period.

Requirement is Requirement is US$ 320 billionUS$ 320 billion, estimated , estimated by by Planning Commission, Planning Commission, during the 11th during the 11th FYP (2007-2011)FYP (2007-2011)

Infrastructure is the critical element to Infrastructure is the critical element to India’sIndia’s growth. growth.

YearYear PublicPublic PrivatePrivate TotalTotal

   (%)(%) (%)(%) (%)(%)

1991-921991-92 4.004.00 1.401.40 5.405.40

1995-961995-96 3.203.20 1.101.10 4.304.30

2001-022001-02 3.103.10 1.701.70 4.804.80

2004-052004-05 3.103.10 1.761.76 4.864.86

Investment in Infrastructure as Percent of GDP

EU’s Trade with Asia EU’s Trade with Asia Growing FastGrowing Fast

EU (25) trade with China (2008)EU (25) trade with China (2008)

Product*Product* Product NameProduct Name ExportExport Share**Share** ImportImport Share**Share**

(US$ bln.)(US$ bln.) (%)(%) (US$ bln.)(US$ bln.) (%)(%)

TotalTotal All CommoditiesAll Commodities 113.51113.51 1.981.98 384.718384.718 6.4776.477

00 Food and live animalsFood and live animals 1.351.35 0.380.38 5.4575.457 1.4271.427

11 Beverages and tobaccoBeverages and tobacco 0.610.61 0.820.82 0.1270.127 0.2370.237

22 Crude materials, inedible, except Crude materials, inedible, except 7.437.43 5.265.26 4.1764.176 2.0542.054

33 Mineral fuels, lubricants and relatMineral fuels, lubricants and relat 0.270.27 0.080.08 1.5391.539 0.1780.178

44 Animal and vegetable oils, fats andAnimal and vegetable oils, fats and 0.070.07 0.330.33 0.0590.059 0.2070.207

55 Chemicals and related products, n.eChemicals and related products, n.e 12.2212.22 1.431.43 13.75613.756 1.8561.856

66 Manufactured goods classified chiefManufactured goods classified chief 13.2513.25 1.501.50 55.58255.582 6.6706.670

77 Machinery and transport equipmentMachinery and transport equipment 67.4667.46 3.143.14 172.080172.080 9.1999.199

88 Miscellaneous manufactured articlesMiscellaneous manufactured articles 7.647.64 1.291.29 130.138130.138 20.05920.059

99 Commodities and transactions not clCommodities and transactions not cl 3.103.10 0.990.99 1.2581.258 0.4040.404

*SITC revision 4 ** Share in total trade

Source: UNCOMTRADE

EU (25) trade with Indonesia (2008)EU (25) trade with Indonesia (2008)

Product*Product* Product NameProduct Name ExportExport Share**Share** ImportImport Share**Share**

(US$ bln.)(US$ bln.) (%)(%) (US$ bln.)(US$ bln.) (%)(%)

TotalTotal All CommoditiesAll Commodities 8.638.63 0.150.15 21.57421.574 0.3630.363

00 Food and live animalsFood and live animals 0.360.36 0.100.10 1.5331.533 0.4010.401

11 Beverages and tobaccoBeverages and tobacco 0.030.03 0.040.04 0.1290.129 0.2400.240

22 Crude materials, inedible, except fCrude materials, inedible, except f 0.470.47 0.330.33 2.2282.228 1.0961.096

33 Mineral fuels, lubricants and relatMineral fuels, lubricants and relat 0.020.02 0.000.00 2.0602.060 0.2380.238

44 Animal and vegetable oils, fats andAnimal and vegetable oils, fats and 0.010.01 0.050.05 2.8482.848 10.01610.016

55 Chemicals and related products, n.eChemicals and related products, n.e 1.541.54 0.180.18 0.8500.850 0.1150.115

66 Manufactured goods classified chiefManufactured goods classified chief 1.081.08 0.120.12 2.6192.619 0.3140.314

77 Machinery and transport equipmentMachinery and transport equipment 4.374.37 0.200.20 3.3553.355 0.1790.179

88 Miscellaneous manufactured articlesMiscellaneous manufactured articles 0.390.39 0.070.07 5.8085.808 0.8950.895

99 Commodities and transactions not clCommodities and transactions not cl 0.350.35 0.110.11 0.0480.048 0.0150.015

** Share in total trade*SITC revision 4

Source: UNCOMTRADE

EU (25) trade with India (2008)EU (25) trade with India (2008)Product*Product* Product NameProduct Name ExportExport Share**Share** ImportImport Share**Share**

(US$ bln.)(US$ bln.) (%)(%) (US$ bln.)(US$ bln.) (%)(%)

TotalTotal All CommoditiesAll Commodities 45.6245.62 0.800.80 44.75644.756 0.7530.753

00 Food and live animalsFood and live animals 0.160.16 0.040.04 2.7552.755 0.7210.721

11 Beverages and tobaccoBeverages and tobacco 0.100.10 0.140.14 0.1320.132 0.2470.247

22 Crude materials, inedible, except fCrude materials, inedible, except f 1.911.91 1.361.36 1.1721.172 0.5770.577

33 Mineral fuels, lubricants and relatMineral fuels, lubricants and relat 0.290.29 0.080.08 3.3513.351 0.3860.386

44 Animal and vegetable oils, fats andAnimal and vegetable oils, fats and 0.020.02 0.090.09 0.3170.317 1.1151.115

55 Chemicals and related products, n.eChemicals and related products, n.e 4.364.36 0.510.51 4.8544.854 0.6550.655

66 Manufactured goods classified chiefManufactured goods classified chief 14.1514.15 1.611.61 12.65912.659 1.5191.519

77 Machinery and transport equipmentMachinery and transport equipment 20.1020.10 0.940.94 7.1617.161 0.3830.383

88 Miscellaneous manufactured articlesMiscellaneous manufactured articles 2.982.98 0.500.50 12.05612.056 1.8581.858

99 Commodities and transactions not clCommodities and transactions not cl 1.481.48 0.480.48 0.2690.269 0.0860.086

Source: UNCOMTRADE

** Share in total trade*SITC revision 4 ** Share in total trade*SITC revision 4

Source: UNCOMTRADE

** Share in total trade*SITC revision 4

EU (25) trade with Japan (2008)EU (25) trade with Japan (2008)Product*Product* Product NameProduct Name ExportExport Share**Share** ImportImport Share**Share**

(US$ bln.)(US$ bln.) (%)(%) (US$ bln.)(US$ bln.) (%)(%)

TotalTotal All CommoditiesAll Commodities 61.1661.16 1.071.07 129.758129.758 2.1842.184

00 Food and live animalsFood and live animals 3.663.66 1.031.03 0.1740.174 0.0450.045

11 Beverages and tobaccoBeverages and tobacco 2.052.05 2.772.77 0.0200.020 0.0370.037

22 Crude materials, inedible, except fCrude materials, inedible, except f 1.641.64 1.161.16 0.9760.976 0.4800.480

33 Mineral fuels, lubricants and relatMineral fuels, lubricants and relat 0.740.74 0.210.21 0.9420.942 0.1090.109

44 Animal and vegetable oils, fats andAnimal and vegetable oils, fats and 0.230.23 1.071.07 0.0270.027 0.0960.096

55 Chemicals and related products, n.eChemicals and related products, n.e 13.0813.08 1.531.53 10.09110.091 1.3611.361

66 Manufactured goods classified chiefManufactured goods classified chief 5.715.71 0.650.65 7.9817.981 0.9580.958

77 Machinery and transport equipmentMachinery and transport equipment 21.4821.48 1.001.00 94.07494.074 5.0295.029

88 Miscellaneous manufactured articlesMiscellaneous manufactured articles 10.4110.41 1.761.76 14.70014.700 2.2662.266

99 Commodities and transactions not clCommodities and transactions not cl 1.491.49 0.480.48 0.5060.506 0.1620.162

Source: UNCOMTRADE

** Share in total trade*SITC revision 4

Source: UNCOMTRADE

*SITC revision 4 ** Share in total trade

Source: UNCOMTRADE

*SITC revision 4

EU (25) trade with Korea (2008)EU (25) trade with Korea (2008)Product*Product* Product NameProduct Name ExportExport Share**Share** ImportImport Share**Share**

(US$ bln.)(US$ bln.) (%)(%) (US$ bln.)(US$ bln.) (%)(%)

TotalTotal All CommoditiesAll Commodities 37.2937.29 0.650.65 61.86761.867 1.0421.042

00 Food and live animalsFood and live animals 0.910.91 0.260.26 0.1640.164 0.0430.043

11 Beverages and tobaccoBeverages and tobacco 0.470.47 0.630.63 0.0230.023 0.0430.043

22 Crude materials, inedible, except fCrude materials, inedible, except f 0.770.77 0.540.54 0.6130.613 0.3020.302

33 Mineral fuels, lubricants and relatMineral fuels, lubricants and relat 0.720.72 0.210.21 2.1952.195 0.2530.253

44 Animal and vegetable oils, fats andAnimal and vegetable oils, fats and 0.090.09 0.430.43 0.0010.001 0.0050.005

55 Chemicals and related products, n.eChemicals and related products, n.e 6.076.07 0.710.71 2.4542.454 0.3310.331

66 Manufactured goods classified chiefManufactured goods classified chief 4.504.50 0.510.51 6.1756.175 0.7410.741

77 Machinery and transport equipmentMachinery and transport equipment 17.9717.97 0.840.84 46.00046.000 2.4592.459

88 Miscellaneous manufactured articlesMiscellaneous manufactured articles 3.983.98 0.670.67 4.0614.061 0.6260.626

99 Commodities and transactions not clCommodities and transactions not cl 1.681.68 0.540.54 0.1600.160 0.0510.051

** Share in total trade

Source: UNCOMTRADE

*SITC revision 4 ** Share in total trade*SITC revision 4

Source: UNCOMTRADE

** Share in total trade*SITC revision 4

EU (25) trade with Malaysia (2008)EU (25) trade with Malaysia (2008)Product*Product* Product NameProduct Name ExportExport Share**Share** ImportImport Share**Share**

(US$ bln.)(US$ bln.) (%)(%) (US$ bln.)(US$ bln.) (%)(%)

TotalTotal All CommoditiesAll Commodities 16.7816.78 0.290.29 28.14028.140 0.4740.474

00 Food and live animalsFood and live animals 0.380.38 0.110.11 0.6190.619 0.1620.162

11 Beverages and tobaccoBeverages and tobacco 0.110.11 0.140.14 0.0040.004 0.0080.008

22 Crude materials, inedible, except fCrude materials, inedible, except f 0.430.43 0.310.31 1.5191.519 0.7470.747

33 Mineral fuels, lubricants and relatMineral fuels, lubricants and relat 0.080.08 0.020.02 0.4020.402 0.0460.046

44 Animal and vegetable oils, fats andAnimal and vegetable oils, fats and 0.010.01 0.040.04 1.9531.953 6.8696.869

55 Chemicals and related products, n.eChemicals and related products, n.e 1.501.50 0.180.18 0.9950.995 0.1340.134

66 Manufactured goods classified chiefManufactured goods classified chief 1.661.66 0.190.19 1.5151.515 0.1820.182

77 Machinery and transport equipmentMachinery and transport equipment 10.9710.97 0.510.51 17.59017.590 0.9400.940

88 Miscellaneous manufactured articlesMiscellaneous manufactured articles 1.201.20 0.200.20 3.3673.367 0.5190.519

99 Commodities and transactions not clCommodities and transactions not cl 0.400.40 0.130.13 0.1400.140 0.0450.045

Source: UNCOMTRADE

** Share in total trade*SITC revision 4 ** Share in total trade*SITC revision 4

Source: UNCOMTRADE

** Share in total trade*SITC revision 4

EU (25) trade with Thailand (2008)EU (25) trade with Thailand (2008)

Product*Product* Product NameProduct Name ExportExport Share**Share** ImportImport Share**Share**

(US$ bln.)(US$ bln.) (%)(%) (US$ bln.)(US$ bln.) (%)(%)

TotalTotal All CommoditiesAll Commodities 12.2212.22 0.210.21 28.62928.629 0.4820.482

00 Food and live animalsFood and live animals 0.520.52 0.150.15 3.6863.686 0.9640.964

11 Beverages and tobaccoBeverages and tobacco 0.120.12 0.170.17 0.0520.052 0.0960.096

22 Crude materials, inedible, except fCrude materials, inedible, except f 0.460.46 0.330.33 0.9620.962 0.4730.473

33 Mineral fuels, lubricants and relatMineral fuels, lubricants and relat 0.050.05 0.010.01 0.2510.251 0.0290.029

44 Animal and vegetable oils, fats andAnimal and vegetable oils, fats and 0.020.02 0.080.08 0.1470.147 0.5160.516

55 Chemicals and related products, n.eChemicals and related products, n.e 2.262.26 0.260.26 1.1171.117 0.1510.151

66 Manufactured goods classified chiefManufactured goods classified chief 2.052.05 0.230.23 2.5192.519 0.3020.302

77 Machinery and transport equipmentMachinery and transport equipment 5.415.41 0.250.25 13.85913.859 0.7410.741

88 Miscellaneous manufactured articlesMiscellaneous manufactured articles 0.900.90 0.150.15 5.8885.888 0.9080.908

99 Commodities and transactions not clCommodities and transactions not cl 0.380.38 0.120.12 0.1220.122 0.0390.039

Source: UNCOMTRADE

** Share in total trade*SITC revision 4

Transport costs outweigh Transport costs outweigh tariff in EU-Asia tradetariff in EU-Asia trade

Transport costs outweigh tariff Transport costs outweigh tariff in EU-Asia tradein EU-Asia trade

ExporterExporter 1981-19901981-1990 19911991 1991-20001991-2000 20012001 2001-20082001-2008 2007#2007#

Transport Transport cost (%)*cost (%)*

Tariff Tariff (%)**(%)**

Transport Transport cost (%)*cost (%)*

Tariff Tariff (%)**(%)**

Transport Transport cost (%)*cost (%)*

Tariff Tariff (%)**(%)**

ChinaChina 22.68622.686 13.58013.580 44.13144.131 7.0707.070 27.89827.898 6.3606.360

IndiaIndia 22.71522.715 13.50013.500 19.35419.354 7.0707.070 12.23712.237 6.7206.720

IndonesiaIndonesia 17.61317.613 12.56012.560 17.25717.257 7.7607.760 25.02325.023 7.1707.170

JapanJapan 8.1928.192 12.63012.630 10.54110.541 5.6705.670 7.8027.802 5.0305.030

MalaysiaMalaysia 9.4139.413 14.60014.600 11.48311.483 5.5805.580 18.99418.994 5.2805.280

ThailandThailand 8.8648.864 14.34014.340 5.5595.559 7.6007.600 10.53510.535 6.9806.980

Importer: European Union (27)

*Ad-valorem (as % of import value), simple average, calculated based on DOTS, IMF

** Simple average tariff, sourced from WITS, World Bank

Source: Author

#Averaged over 2003-2007

India has high trade India has high trade potential with EUpotential with EU

India’s trade potential with EU India’s trade potential with EU (contd.)(contd.)

PartnerPartner

2008*2008* 20082008 20092009 20102010 20112011 20122012 20132013 20142014 AAGRAAGR##

(US$ billion)(US$ billion) (%)(%)

AUSTRIAAUSTRIA 1.081.08 1.401.40 1.281.28 1.481.48 1.671.67 1.931.93 2.262.26 2.642.64 14.7314.73

BELGIUM-BELGIUM-LUXEMBOURGLUXEMBOURG 9.579.57 25.7425.74 23.7523.75 27.5027.50 31.4931.49 36.4136.41 42.5542.55 49.6449.64 15.4715.47

BULGARIABULGARIA 0.150.15 0.410.41 0.370.37 0.410.41 0.470.47 0.570.57 0.720.72 0.890.89 19.7119.71

CYPRUSCYPRUS 0.350.35 0.000.00 0.000.00 0.000.00 0.000.00 0.000.00 0.000.00 0.000.00 20.4420.44

DENMARKDENMARK 1.031.03 2.212.21 2.032.03 2.402.40 2.782.78 3.303.30 3.943.94 4.644.64 18.3018.30

ESTONIAESTONIA 0.070.07 0.100.10 0.070.07 0.080.08 0.090.09 0.100.10 0.130.13 0.150.15 9.349.34

FINLANDFINLAND 1.401.40 1.991.99 1.781.78 2.072.07 2.402.40 2.812.81 3.333.33 3.943.94 16.3316.33

FRANCEFRANCE 8.038.03 13.0513.05 12.1612.16 14.1114.11 16.1716.17 18.8018.80 22.0722.07 25.7825.78 16.2716.27

GERMANYGERMANY 17.2817.28 26.1926.19 23.1223.12 26.3626.36 29.5129.51 33.5533.55 38.5138.51 44.0044.00 11.3411.34

GREECEGREECE 0.880.88 1.541.54 1.491.49 1.721.72 1.951.95 2.252.25 2.632.63 3.053.05 16.4616.46

HUNGARYHUNGARY 0.550.55 0.650.65 0.500.50 0.600.60 0.710.71 0.870.87 1.051.05 1.271.27 15.8415.84

IRELANDIRELAND 0.650.65 1.391.39 1.171.17 1.281.28 1.421.42 1.641.64 1.911.91 2.202.20 9.819.81

(Gravity model)

India’s trade potential with EUIndia’s trade potential with EUPartnerPartner 2008*2008* 20082008 20092009 20102010 20112011 20122012 20132013 20142014 AAGR#AAGR#

ITALYITALY 8.028.02 14.2514.25 12.9812.98 15.0215.02 16.9216.92 19.4119.41 22.5322.53 26.1826.18 13.9613.96

LATVIALATVIA 0.150.15 0.260.26 0.180.18 0.170.17 0.190.19 0.230.23 0.270.27 0.330.33 4.324.32

LITHUANIALITHUANIA 0.490.49 0.180.18 0.130.13 0.140.14 0.160.16 0.190.19 0.230.23 0.270.27 8.418.41

MALTAMALTA 0.090.09 0.200.20 0.190.19 0.220.22 0.250.25 0.300.30 0.360.36 0.430.43 19.3319.33

NETHERLANDSNETHERLANDS 7.907.90 10.6810.68 9.699.69 11.2611.26 12.7112.71 14.6214.62 17.0417.04 19.8819.88 14.3714.37

POLANDPOLAND 0.740.74 1.691.69 1.321.32 1.491.49 1.751.75 2.092.09 2.542.54 3.093.09 13.8413.84

PORTUGALPORTUGAL 0.500.50 0.950.95 0.860.86 1.001.00 1.121.12 1.291.29 1.501.50 1.731.73 13.6113.61

ROMANIAROMANIA 0.780.78 1.761.76 1.381.38 1.591.59 1.981.98 2.682.68 3.613.61 4.734.73 28.0928.09

SLOVAK REPUBLICSLOVAK REPUBLIC 0.080.08 0.000.00 0.000.00 0.000.00 0.000.00 0.000.00 0.010.01 0.010.01 24.5824.58

SLOVENIASLOVENIA 0.220.22 0.000.00 0.000.00 0.000.00 0.000.00 0.000.00 0.010.01 0.010.01 19.5519.55

SPAINSPAIN 3.423.42 7.167.16 6.486.48 7.367.36 8.228.22 9.369.36 10.8110.81 12.5112.51 12.4612.46

SWEDENSWEDEN 2.542.54 3.703.70 3.033.03 3.763.76 4.544.54 5.475.47 6.586.58 7.887.88 18.8618.86

UNITED KINGDOMUNITED KINGDOM 12.2012.20 27.2927.29 22.0022.00 26.4126.41 31.1131.11 37.3637.36 45.2345.23 54.6954.69 16.7316.73

EU (25)EU (25) 78.1678.16142.7142.7

88125.9125.9

66146.4146.4

44 167.64167.64195.2195.2

77229.8229.8

11269.9269.9

44 14.8414.84Notes: *Actual trade. #Average annual growth rate

Source: De, Prabir, (2010), South Asia: Trade Integration after the Global Financial Crisis, Mimeo, World Bank, Washington, D.C

India offers high investment opportunities in infrastructure

Telecom, Tourism, SEZs & Townships, Supporting Urban Infrastructure, Water & Sanitation, State & Rural Roads, Logistics etc.Source: Planning Commission, Government of India

SectorsSectors Anticipated Anticipated Investment in 10Investment in 10thth FYP (2002-2007)FYP (2002-2007)

Projected Investment Projected Investment in 11in 11thth FYP (2007- FYP (2007-

2011)2011)

Percentage Percentage Change Change

US$ billionUS$ billion %%

ElectricityElectricity 70.570.5 150.4150.4 111.3111.3

Roads and bridgesRoads and bridges 31.731.7 76.176.1 140.1140.1

TelecomTelecom 22.522.5 65.165.1 189.3189.3

RailwaysRailways 20.320.3 62.262.2 206.4206.4

IrrigationIrrigation 32.132.1 53.153.1 65.465.4

Water and sanitationWater and sanitation 15.615.6 48.648.6 211.5211.5

PortsPorts 1.31.3 18.018.0 1284.61284.6

AirportsAirports 2.12.1 8.58.5 304.8304.8

StorageStorage 2.32.3 5.55.5 139.1139.1

GasGas 2.12.1 5.05.0 138.1138.1

TotalTotal 200.5200.5 492.5492.5 145.6145.6

Delhi – Mumbai Industrial Corridor Delhi – Mumbai Industrial Corridor (DMIC)(DMIC)

Dedicated Freight CorridorsDedicated Freight Corridors

SPV - India Infrastructure SPV - India Infrastructure Finance Company LimitedFinance Company Limited

Lack of long term debt in capital marketsLack of long term debt in capital markets

SPV to provide long term debt to viable infrastructure SPV to provide long term debt to viable infrastructure projects projects Direct lending to PPP and public sector projects Direct lending to PPP and public sector projects Refinance for private projectsRefinance for private projects

Funds to be raised from domestic and external markets on Funds to be raised from domestic and external markets on strength of government guaranteesstrength of government guarantees

Reliance on lead bank for appraisal and lending operationsReliance on lead bank for appraisal and lending operations

Guarantee limit of Rs.100 billion for first year of operationGuarantee limit of Rs.100 billion for first year of operation

India’s Overland Connectivity India’s Overland Connectivity with East Asiawith East Asia

India – Myanmar-India – Myanmar-Thailand Trilateral Thailand Trilateral HighwayHighway

India – Myanmar – India – Myanmar – Thailand – Vietnam Thailand – Vietnam Railway Cooperation: Railway Cooperation: Delhi – Hanoi Delhi – Hanoi Railway Link Railway Link

Afghanistan – Afghanistan – Pakistan – India – Pakistan – India – Bangladesh – Bangladesh – Myanmar (APIBM) Myanmar (APIBM) Transport CorridorTransport Corridor

Potential Transport Hubs in South Asia

Afghanistan

Pakistan India

Bangladesh

Sri LankaMaritime

Hub

Nepal Bhutan

Towards West Asia / Europe

Towards Southeast / East Asia & Pacific

Myanmar

Maldives

Towards Middle East

Towards Central Asia

Overland

Maritime

China

Opportunities for Baltic Sea Opportunities for Baltic Sea region for EU– India traderegion for EU– India trade

EU- India investment towards production / EU- India investment towards production / services networks holds the key services networks holds the key Baltic sea region has to increase its FDI in IndiaBaltic sea region has to increase its FDI in India India – Germany partnership a successful caseIndia – Germany partnership a successful case

Removal of trade barriersRemoval of trade barriers Higher trade costs impede trade flows between India Higher trade costs impede trade flows between India

and EUand EU

Opening of Asia – Europe overland connectivityOpening of Asia – Europe overland connectivity Extending Asian Highway / Trans-Asian Railway Extending Asian Highway / Trans-Asian Railway

Thank youThank you

For further information, please contactFor further information, please contactPrabir De, PhDPrabir De, PhD

FellowFellowResearch and Information System for Developing Countries (RIS)Research and Information System for Developing Countries (RIS)

India Habitat CentreIndia Habitat CentreLodhi RoadLodhi Road

New Delhi, IndiaNew Delhi, IndiaTel. (+91-11) 2468 2177Tel. (+91-11) 2468 2177Fax. (+91-11) 2468 2174Fax. (+91-11) 2468 2174

Email: Email: prabirde@ris.org.inprabirde@ris.org.in prabirde@hotmail.comprabirde@hotmail.com

Web: Web: www.ris.org.inwww.ris.org.in