India-EEC Survey 5: The Uncommon Market

The EEC Commission meeting in one of its sessions in Brussels last year: a powerful fraternity with the largest share of global tradeThe European Parliament, which represents the second largest industrial power in the world, once hailed India as the world's largest democracy. India was the first developing country to set up diplomatic relations with the Community-or the Common Market as it was then called-way back in 1962 and also among the first to enter into a commercial agreement with it. This agreement has been overtaken by time- both India and the EEC have outgrown their earlier roles as fledgling communities seeking a place in the sun-and a new agreement is under negotiation which will take the relationship to new and hopefully brighter horizons.Next only to the United States, the European Community is the second most powerful industrial power in the world, and India, though by all conventional indicators a ''poor'' country, is among the top ten industrial nations. Yet, for reasons due partly to ancient history and partly to the economic compulsions of modern times, the two communities are not as close as they should be. Viewed from the EEC end, New Delhi is just a speck on the map accounting for no more than one per cent of its worldwide trade. For India, however, the EEC is its largest trading partner.The new agreement will almost certainly bring the two communities closer than before but does Europe really wish to take the relationship beyond the narrow commercial and trading confines? What indeed does Europe think of India? Business Editor Jay Dubashi, who wrote this survey, recently travelled down to the EEC headquarters in Brussels and other European capitals including London, the Hague and Rome where he talked to EEC bureaucrats, businessmen, industrialists, bankers, government officials in member states and economists and political scientists in research institutes. His report:Jawaharlal Nehru used to say, before he had to deal with ICS bureaucrats, that the Indian Civil Service was neither Indian nor civil nor much of a service. In the eyes of many Europeans, the European Economic Community (EEC) does not really speak for Europe, deals in any case only a small aspect of its economy and is a long way from being a community. In the cavernous corridors of Berlemont in Brussels, there are differences of opinion even as to what the agency should be called. The French and the Germans, the two founding fathers of the Community, prefer to call it the Common Market, the British with their penchant for acronyms, call it EEC but most of the rest, particularly the smaller members like Belgium and the Netherlands refer to it as the European Community. The high-minded commissioners who represent the member-countries and manage -or attempt to manage -its affairs have learnt to take the Europeanness for granted and refer to it simply as the Community, some of them in such an off-handed way that they could well be referring to a Kibutz or an esoteric religious sect operating from some deep woods outside Brussels.Dakignon: no walls around the EEC The French and the Germans are of course right, for the EEC is first and foremost a market, a vast and growing bazaar for the manufacture and sale of goods and everything else is secondary. It is not of course unusual for a market as vast as the EEC - with a gross domestic product of over Rs 1,600,000 crore, more than 15 times that of India - to invest itself with a - vast array of functions and powers, all of which, however, flow from its pre-eminent position as one of the three, or including Japan, four largest integrated markets in the world. It is only slightly smaller than United States (1978 GNP: Rs 1,710,000 crore) and nearly one-and-a-half times the Soviet bloc and more than twice that of Japan. When such a vast market system falters, as it has tended to do during the 1970s, everything else suffers. The world has changed a great deal during the past decade and, viewed from Brussels, the EEC headquarters. Europe Inc seems to be on the skids, with unemployment at a record level and growth so sluggish as to be almost unnoticeable.It has been a poor year for Europe. The Community was set up in 1956 as a unique experiment in which a group of dedicated nations were to sink their differences and pool their resources in an attempt to take history by the scruff of the neck and reverse what seemed an inevitable decline in their economic and political status. Ten years ago, the goal of a full European union (economic, monetary and political) was confidently set for 1980. The deadline for the union has, however, already passed virtually unnoticed and the Community is in many ways no further forward than it was 10 years ago when it was about to be enlarged, in a surge of great optimism, to embrace Britain, Ireland and Denmark. Roy Jenkins, who retired as Commission president early this month told India Today recently that the lack of progress towards a political union was his one big regret. But, as one senior EEC diplomat put it, God Almighty himself would probably not have succeeded in doing better in a period when the economic crisis made all national governments more inward-looking and also more suspicious of one another's motives.Global Trade: Why should India then be so keen to have a special relationship with EEC. if the Community is only a market technically just a customs union with a common external tariff and nothing else? First, the Community is not only the biggest trading unit of the world with a share of some 40 per cent of world trade, but is also by far the largest trading partner of India accounting for almost a third of India's global trade. In 1979. the EEC supplied nearly 31 per cent of India's imports and took in 27 per cent of our exports. Second, the EEC represents by far the largest export market in the world. Of the nine Common Market countries the 10th member, Greece, joined this year - seven are among the top 10 in terms of both imports and exports. The total imports of West Germany and France together exceeded those of the US and although Japan moved into third place (after US and West Germany) it was only a notch higher than France. Third, Common Market countries are also large exporters, occupying more or less the same places on the list as major importers.EEC Commissioner M. Haferkamp at the inaugration of the Indian Commercial Centre in Brussels: scheme to expand tradeThe implications of all this for India are only too clear. The Common Market countries are heavily dependent on world trade for their economic well-being. Viscount Davignon the EEC commissioner in charge of industry and one of the most dynamic - and some might say, abrasive -personalities in the commission, says: "If we build a wall around the EEC, we shall only be imprisoning ourselves."However, India's share of the EEC market is tiny, less than 0.5 per cent which makes its entire pattern of trading with the EEC a lopsided affair. Moreover, two countries, Britain and West Germany together account for more than half the trade and since India has always had stable trade relations with these countries, the existence of the Common Market does not seem to have made much of a change. There is also little evidence that the EEC has particularly favoured India as far as trade is concerned, for the share of India's EEC trade has not improved all that much since 1973, when Britain joined the market. The share has gone up only marginally from 24 per cent in 1973-74 to 29 per cent in 1978-79, but imports have moved faster than exports. From a purely commercial point of view, India needs the EEC far more than the EEC needs India, though officials in Brussels go out of their way to make the point that the EEC is far more concerned about its trade with India than the bald figures of exports and imports would indicate. As a senior EEC diplomat said: "India is unlike any other country; it is unique. And our relationship with you is also unique."At the same time, EEC officials do not conceal the fact that the Community's relations with 'poor' countries are dictated by its dependence on these countries for supplies of raw materials ranging from coffee to cotton to copper. This dependence is massive upto 90 percent. The Lome Convention, under which 57 former colonies of European (other than British) countries enjoy a 'special' relationship with EEC, is an instrument of the Community's economic diplomacy. "It is an agreement," says an African academic expert, "between the producers of raw materials (the have-nots) and the highly industrialised European countries to ensure that there is an orderliness in the availability and supply of these raw materials. The have-not countries will not resort to economic sabotage to establish a new international economic order."Investments: Since India does not possess the advantages of the Lome Convention states, the EEC's relations with India cannot have the same priority in Brussels as these states command. As for investments, except for Britain and West Germany, no other EEC member has any sizeable amount of investment in India. Even for Britain and Germany investments in India constitute only a small proportion of their total investment overseas and the net inflow of new investments has been declining since the mid '60s.On the face of it, therefore, it would appear that India has little to gain by a special relationship or agreement with the EEC. After all, India's exports to Eastern Europe also accounts for roughly the same percentage as to the EEC (about 21 per cent each in 1974-75). It would, however, be wrong to take the EEC connection lightly. India had been trying since 1970, three years before Britain was admitted into the Community, to conclude a broad commercial cooperation agreement with the EEC covering trade, aid and investment, but the latter's response was not favourable primarily because of French opposition. Although the Indo-EEC commercial agreement of '70 fell short of what India wanted, it provided for a general scheme for trade expansion between India and the Community. The agreement also provided for a high-powered joint commission to sort out trade and economic problems. A new agreement is currently under negotiation which would considerably enlarge the scope of the existing one. Significantly, it would be expanded to cover the development of industry (including coal and steel) as also scientific and technological cooperation, particularly in the field of energy. The model chosen for this agreement is apparently the EEC's agreement with Canada, a major industrial nation.Hindustan Lever's plant at Haldia: from food to chemicals This is perhaps a major hurdle in India's relationship with the developed world - the continuing perception of India abroad as a 'poor' country perpetually on the brink of hunger and starvation, riddled with social distemper and fractured by political instability. Since this is also what most other 'poor' countries suffer from. India is bracketed with them as a basket case. Also, because India's exports to the EEC are negligible, there is virtually no Indian economic presence - let alone any leverage-in Europe. A banker in London was surprised to be told that India was now able to set up nuclear power stations on her own, with only the slenderest assistance from the West. "Did I hear you say nuclear power stations?" the man asked, cupping his ears. He nearly went through the roof when told that India not only designed and constructed its nuclear power stations but was well on its way to setting up a breeder reactor. The EEC has helped the Indian embassy in Brussels set up a trade promotion centre but this is something New Delhi could have done on its own without assistance from the Community or any other agency. These are, after all, small matters - the trade centre has cost less than a crore of rupees- that can and should be taken up by the Indian Government on its own without passing the hat round. "Your people are always asking for this and that, even when they can jolly well do those things themselves," moaned a senior official in London, though, being a Britisher and an old India hand, he made it sound as if it was a purely friendly off-the-cuff complaint.Recession: The fact remains that even within the existing constraints there is considerable scope for increasing India's exports to the EEC. It is not generally recognised, for instance, that while India has often complained of ceilings on imports entering the Community under the General System of Preferences (GSP). the exports have often fallen far short of ceilings. It is true that there are growing protectionist tendencies in the Community, but considering what the European economy has been passing through recently, this was unavoidable. Throughout the '70s the world - Europe and India included - has suffered from a peculiar combination of inflation and recession. At a time of increasing unemployment, people losing their jobs in the declining industries as a result of foreign competition cannot easily be absorbed in other industries. In the EEC as a whole, unemployment stood at more than six million in 1978 and, according to one estimate, between 1978 and 80, nine million more were on the dole. This is more than two-thirds of the total employment in the entire organised sector in India. Under the circumstances, a general liberalisation of trade by the EEC countries (through the abolition of quotas and reduction of tariffs) is unlikely to happen. On a more modest level, India should work for widening the GSP, but even here matters would not be easy. Apart from domestic considerations, the Lome countries would oppose such a thing. It is all very well to talk grandly of the new international economic order but not when one's own house is on tire and there is disorder every where.Immediate trade prospects being what they are time has obviously come for a drastic shift in India's priorities in dealing with the rapidly changing external economic situation. For the first 15 years or so after Independence, New Delhi was more concerned with aid from abroad and went all out to secure it. During the next 15 years, the emphasis was on trade. Between 1960 and 70, exports grew at the rate of 3 per cent per year; between 1970 and 78, the rate nearly doubled to 6 per cent, at a time when most countries were not doing so well. But because of the skewness in the world trade pattern as also the crucial changes that have taken place in India's own industrial sector, the stress during the next phase should be more on industrial and technical cooperation with European and other advanced countries, rather than on traditional trade.The compulsions for such a shift are obvious. The next 20 years will see a major overhauling of the world's industrial structure with a number of high labour-cost countries opting out of labour-intensive industries, with the slack being taken up by those with labour cost advantages. This is already happening to some extent but the pace of the shift will quicken up in the '80s and beyond. For instance, the share of textiles and clothing in the exports of industrialised countries-many of them EEC members -has dropped from 7 per cent to 5 per cent between I960 and 77 while that of the middle-income countries (like South Korea. Hong Kong and Taiwan) has gone up sharply from 4 to 10 per cent. In the case of India, however, it has dropped from 35 to 20 per cent which means that the South East Asian countries are doing the running as far as textiles is concerned and will soon walk away with most of the business. The textile industry in Western Europe is in deep trouble. In Britain, for example, seven out of every 10 shirts sold in the market come from the growing textile industries of Hong Kong, South Korea, the Philippines and Taiwan. In the EEC the impact has been traumatic: the number of cotton spindles in the nine EEC-member countries declined from 30 million to 16 million between 1960 and 76, and a total one million jobs in the textile industry alone just disappeared.The same thing is likely to happen in the automobile industry which is under severe pressure from Japan. Between 1960 and 77, Japan has increased its share of exports of machinery and transport equipment from 23 per cent to 56 per cent, a galloping rate no other country has been able to match on such a grand scale. Japan is now the largest manufacturer of motorcars but there are already signs that the US and EEC car manufacturers are regrouping their forces to fight back by either forming combines or setting up joint ventures, or on the principle, "If you can't beat them, join them", setting up factories in Japan itself with their motor car manufacturers.India's Attitude: How does India propose to meet the coming upheaval in world industry? It cannot just sit back, send delegations of tired officials to Brussels to ask, for a tariff relief here and a quota concession there and be happy with a few thousand tonnes of butter oil collected from the frozen mountains stacked in EEC warehouses. If India is an industrial power, it must behave like one. It should go all out to modernise its fading and outdated industrial establishment with massive imports of technology and finance. And the time of industrial realignment among the major industrial powers is as good as any for a programme of massive industrial modernisation and expansion, with all stops pulled out. It is true that the world is not dying to invest in India, and given the kind of constraints foreign investors would have to operate under, there is no reason why they should. But there are a number of major industrial groups in Europe who would like to establish a presence in this country and they should be encouraged. The EEC is not only one of India's major trading partners but also a potential major supplier of investment technology and development assistance. But foreign business investment has been stagnating for the past 10 to 15 years. The net inflow has been of the order of Rs 25 crore a year, which is trifling. It could easily be pushed up 10 times that much. Since most of it would be in terms of modern plant and machinery, as well as new management techniques, it could do wonders to our flagging industrial economy. The EEC countries are actually investing in industrialised nations like US and Canada -the rich prefer to get together with their own kind - as also in middle-income countries like Brazil. Mexico, Nigeria and Hong Kong. Asked why his company was not interested in investing in India, a Dutch business executive who works for an aircraft manufacturing company in Amsterdam, said: "You may be a free country but not a free market country. We prefer the second lot."Yet there are signs that the Indian market is still a-big magnet. For instance, the French who had kept back all these years, have already come in with a bang, with an aluminium project in Orissa worth over Rs 1,250 crore. The financing of the project involves Asia's largest ever syndicated euro currency loan of US $680 million (nearly Rs 550 crore) which was managed by 21 banks including 12 from EEC member countries. Two European firms -Davy International of Britain and Mannesmann Demag of West Germany - are keenly competing for a stake in the Rs 2,500-crore steel project at Paradip, also in Orissa. A team of British mining equipment workers is currently on a visit to India to try to get a slice of another Rs 2,500 crore for upgrading the coal-mining industry. Up to a quarter of the total spending spread over the next 10 years will go on foreign orders and Britain hopes to win at least a third of these.Power control centres made by Siemens India: a big magnet 'Sanforized' and 'Tebilized' which are both registered trademarks for chemical processes owned by a company-by printing similar-sounding labels. "This campaign of mine has made me unpopular, you could say, among textile mills. Does that mean they should stop supporting me?"The goal of the CERC is to take up the gauntlet on as many fronts as possible, from national to local issues, so that a precedent is set and public awareness created.Detailed Probes: In another recent example of the kinds of cases Shah takes up, the cerc discovered that a popular brand of groundnut oil manufactured in Gujarat was advertised as being specially-enriched by Vitamin A. Since the oil in its natural state contains something like 1,080 lakh international units (IU) of Vitamin A per kilo, was it possible to additionally enrich it with more Vitamin A? Starting with this query. Shah used the services of a research scientist, Dr A.S. Divetia, to test samples of the brand. The various tests cost no more than Rs 600. But six months later, when it was clear that no more than 5.3 IU of Vitamin A per kilo - a very negligible amount-were being added by the manufacturer, the con-trick perpetrated upon thousands of consumers, was clear. Shah threatened to send a legal notice to the manufacturer, but it was not really necessary. The manufacturer, after a few meetings, came crawling to the CERC. Not only were the misleading advertisements withdrawn, but Shah insisted that corrective advertisements apologising to consumers appear over the same space and in the same places in the near future. In the meantime. Shah's research on edible oils came out in the form of bound pamphlet on sampling of common edible oils, testing methods, and possible adulterations.Scores of such bound pamphlets have become a trademark of CERC activities: records of legal wranglings with LIC, Gujarat state departments, the Indian Airlines case, document the research, case-studies and recommendations behind each of the campaigns launched. In some cases, such as the campaign against the inefficiency of the GSEB. The CERC with the aid of a graduate of the Indian Institute of Management in Calcutta and an architectural planner, has conducted village-to-village surveys that give details of losses incurred by consumers because of erratic power breakdowns. The research estimates that the GSEB's power cuts in 25 villages vary from two days a week for 10 hours a day to three days a week for 15 hours a day-which works out to 37.5 per cent of total daytime in the week. Power cuts and voltage fluctuations cause an average loss of Rs 4,500 a year per rural family. Rewinding of motors for pumps due to sudden breakdowns may cost a villager anywhere up to Rs 2,000. Another pamphlet assesses the financial malfunctioning of the gseb and states that there are accounting irregularities to the tune of Rs 421.58 crore in the department according to the accountant general of the state.Misleading textile labels that Shah foughtConsumerist Ethic: Despite the extensive research that he conducts with help from scholars, lawyers and other professional experts, distributing pamphlets bursting with documented revelations is the least of his job. The second stage lies in actually confronting the powers-that-be. As a result, the extensive research on the GSEB has been compressed into a hard-hitting memorandum submitted to the Rajadhyaksha Committee which is considering the functioning of the Indian power supply industry. "Inefficiency, extravagance and wastage in public sector units can only be brought to the surface if consumers and citizens participate in such government-appointed committees. It's the only way government can be made answerable to the people."It is precisely this principle of public accountability, whether by a private manufacturer hoodwinking buyers or a government department depriving a larger public, that is the crux of the consumerist ethic. Yet, for all his resolve and capacity for organisation, can Shah with a small band of activists achieve success on a larger scale? Shah himself is aware of the problem, made more acute by the fact that there is hardly a city or medium-sized town in India where consumer organisations of some kind or other do not already exist. In Bombay alone there are half-a-dozen, one over 50 years old. In Delhi there is the Government-subsidised Indian Federation of Consumer Organisations. Yet there are few who have persisted in championing causes over the years with appreciable success: The Pune-based Akhil Bharatiya Grahak Panchayat has fought rises in milk prices and the Consumer Guidance Society of India is pushing for amendments in food adulteration laws.A groundnut oil container: exaggerated claim Many of these groups lack not only organisation, but what is more important, a wider impact. However, when the CERC sued Indian Airlines in June this year over the increase in air-fares, the issue, though legally undecided and still pending in court, created enough reaction among the airlines 65 lakh passengers to ensure wide media coverage.Seminars: Many of Shah's crusades have this kind of effect, and Shah himself does not soft-pedal the importance of the media for his set-up. At the same time, he is aware that to consolidate a movement he requires not only support from the media-in fact the CERC is planning a special seminar next year to encourage journalists in consumer reporting-but from every group of professionals, from lawyers to social scientists to management experts.As for himself, he travels tirelessly to local clubs and associations in metro cities and small towns to carry on the crusade by talking to people, persuading lawyers to fight his battles for him, attending courts for hearings, knocking on bureaucratic doors for support, pleading before judges for interim relief in cases, canvassing for funds and drumming up media response. In Ahmedabad, the city where his odyssey began, textile magnates and trade unionists speak of him with equal proportions of admiration and awe but owe him their unequivocal support. Manubhai Shah's ethic is simple: he will leave no stone unturned or door unopened for aid for his centre - as long as its activities are not compromised and the ideology behind it established. The way he is going about it, consumerism may become more than a one-town success, and the cerc more than a one-man noise.There is far more scope for raising eurocurrency credits for Indian projects than is realised in New Delhi. Even Communist China is raising such loans, says a Lloyds Bank official in London who has handled quite a few. There is also considerable scope for offshore banking in Europe. Bank of Baroda has such a centre in Brussels and is said to be quite a success.Better Connections: Of the European industrial countries, Britain and West Germany have long connections with India's industry but others are trying hard to get in. Perhaps the most enthusiastic of the lot are the Italians. Italy has a large chunk of public sector enterprises, which are public sector only in name, and operate aggressively as if they were closely held family enterprises watched over benignly by a godfather. The Ansaldo group, one of the largest in Finmeccanica's energy sector, recently won a contract for the supply and erection of a power generation plant for the Ramagundam power station in Andhra Pradesh in the teeth of competition from our own Bharat Heavy Electricals (BHEL). Paolo Ciaccia who heads an Ansaldo subsidiary that will handle the project views the contract only as a beginning of their involvement in India.Another Italian public sector group. ENI (Ente Nazionale Idrocurburi) has been in this country for nearly a quarter of a century and hopes to clock up another quarter. ENI's subsidiary, Snam-Progetti was in the news recently following the snafu over the Thal-Vaishet fertiliser deal but this is unlikely to keep ENI from thrusting ahead. Like a number of other European oil companies including Compagnie Francaise des Petroles of France - it is involved in negotiations with the ONGC on the Bombay High off shore exploration programme and hopes to get a slice of the "oil cake".It is when one works down from the Government to the private sector level that doubts and hesitations creep in. A Unilever official in Rotterdam Unilever is a British-Dutch multinational and has head offices in London as well as Rotterdam-referred proudly to the brand new chemical plant at Haldia put up by his Indian subsidiary, Hindustan Lever. A tall soft-spoken official of Olivetti, Franco Mattirolo who had spent some time in Bombay as a naval officer in 1948 seemed apologetic about their slender connection with India - a technical tie-up with Hindustan Teleprinters - but now that the group has got over its financial worries, it looks forward to a suitable opening in India, provided...Doubts: And talks with industrialists always tend to taper off with a "provided" at the end. What are they worried about, one wonders. Not profits or remittances since India's record in this respect is exceptional. Out of the 50 top subsidiaries of multinationals operating in India, 30 belong to EEC member countries and in 1978-79, the latest year for which figures are available, not a single company made a loss. In fact, some, like Guest Keen Williams, ICI and Metal Box are doing far better than their parent companies in Europe and nearly all of them are expanding. What then are they really worried about? They refer vaguely to the dreaded Foreign Exchange Regulation Act (FERA) and the long drawn-out negotiations with officials and politicians. "Everyone wants to get into the act and the Hies move up and down the corridors and we have to employ a man just to trace them since They have a habit of getting lost in the maze." says a Britisher, whose company specialises in water purification plants and who would very much like to set up shop here. "You are a sucker if you invest in India but a bigger sucker if you don't." says another who has been visiting India for years as a member of business delegations but has not yet been able to "make it."Sponge iron plant at Paloncha in Andhra Pradesh: technology by Lurgi If New Delhi has doubts about the role of foreign capital in the present situation, it should encourage foreign technical collaboration agreements in a big way, with or without equity investment. It is surprising how many Indian entrepreneurs, large or small, are looking for opportunities to make new products or update their existing range with new designs. A manufacturer of automatic shoe-polishing machines working in a small factory in a Hague suburb received 14 enquiries when he put out a small announcement in a trade newsletter which he didn't even know circulated in India. He received enquiries from as far a field as Rajkot in Gujarat and Ranchi in Bihar. He contacted a person in the Indian embassy but could not get much change out of him. He then wrote to all of them, received six replies but the whole business is apparently stuck because the item does not have a high priority in New Delhi, although the Hague man is prepared to buy three-quarters of the production for distribution world-wide. Many foreign companies with products far more complex than shoe-polishing machines would like to enter into technical agreements sale of licences and patents against payment of royalties andor lump sum fees on a more long-term basis.New Delhi is concentrating its attention on the new agreement with the Commission but it may not be wise to depend too much on it. According to the Brussels grapevine. India wants to include a new clause in the agreement calling for a mutual effort to prepare and implement a time-bound programme for restructuring European industry. The Community apparently cannot accept such a condition, as adjustments which mearis mainly closing down of old factories and switching over to new products -are governed by free market compulsions. No European government can ask a company to close shop, or even to drop a particular product line and take up another one. When the steel industry ran into trouble last year and steel companies began to lose money. Viscount Davignon invoked the 'manifest crisis' clause of the Coal and Steel Community to advise the Council to slap production quotas on the entire steel industry, a step that was strongly resented by German and Italian steel manufacturers. But if the European industry as a whole runs into more rough weather, the EEC may be tempted to take more such steps which, in principle, run counter to the free market philosophy but are often inevitable. If this happens, there is a very real danger that the EEC may under pressure from individual member-states, impose all kinds of restrictions on the manufacturing sector which may then end up, like textiles, in the vortex of EEC politics. Colonial Fear: What perhaps holds India back from going the whole hog into a deeper relationship with Europe is the old colonial fear that such an association might open the gates for the return of the old imperialists in another garb. This would be a pity, for there is a great deal that India can receive from Europe -and vice versa without feeling that it was always at the receiving end. The last decade has not been a happy time for India and the ruling elite is not as confident as it used to be. But there is no reason why this lack of self-confidence should come in the way of enormous possibilities that lie ahead. Snam Progetti's urea plant in Trombay India is not only the largest functioning political democracy in the world but perhaps the only one in the so-called Third World that has survived tremendous internal strains and external stresses since Independence and is still, like most, if not all member-countries of the EEC, on its feet. It is also like Europe, an open society and since an open society is impossible without an open economy, India, must look outward and get out of what Prof Raff Dahrendorf has called the "Cartel of Anxiety." For over 30 years, it has tried operating a closed-or near-closed-society with controls, restrictions, tariffs and barriers at almost all levels, particularly in the working of the economy. It has not worked. India is still among the poorest countries of the world with more than half the population below subsistence levels, while other countries, many of which took off more or less at the same time have surged forward and left India far behind. Most of them have had a strong and close relationship with Europe and profited a great deal from it. Europe may be passing through a crisis but there are few countries that have done as well as the member-countries of the EEC. But there is also another reason why India and Europe should come closer and nobody put it better than Jean Monet, the father-figure of United Europe and the man who started it all. He told an Indian visitor: "If Western Europe is to play its true part in an interdependent world, it is not enough if it remains oriented towards the Atlantic and the Mediterranean. It must become a partner in the activities of traditionally civilised societies in India (and China) which are also repositories of intrinsic cultural and intellectual strength." To which one can only add, Amen.Published By: AtMigration Published On: Oct 1, 2014 15:25 IST--- ENDS ---

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India-EEC Survey 5: The Uncommon Market

Next only to the United States, the European Community is the second most powerful industrial power in the world, and India, though by all conventional indicators a ''poor'' country, is among the top ten industrial nations.

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