Opening Statement

Foreign Secretary on the visit of Prime Minister Dr. Manmohan Singh to the UK andFinland, between 9-14 October, 2006


Shivshankar Menon:: Ladies and gentlemen, I thought I will brief you on Prime Minister Dr. ManmohanSingh's official visit to the UK and to Finland for bilateral discussions and for the SeventhIndia-EU Summit from the 9th to the 14th.

PM will be in the UK from the 9th to the 11th and will be accompanied by the Commerce and Industry Minister Shri Kamal Nath and the Minister of State for External Affairs Shri Anand Sharma.

In the UK, during the visit Prime Minister will hold summit meeting with the UK Prime Minister Tony Blair. This is the third India-UK summit meeting since the Comprehensive Strategic Partnership between India and the UK was launched in September 2004. In addition, Dr. Gordon Brown, the Chancellor of the Exchequer and the UK Foreign Secretary Ms. Margaret Becket will be among those who would call on the Prime Minister while he is in London.

The focus of discussions during the visit will be on the further expansion of economic linkages, on R&D collaboration and academic exchanges and on cooperation in counter-terrorism and clean energy. These are among the focus areas for consultations and discussions during the visit. There will be other areas as well.

This will be the fifth meeting between the two leaders since 2004. Following PrimeMinister's visit in 2004, Prime Minister participated in the Gleneagles summit in the UK in 2005. Prime Minister Blair visited India for the SixthIndia-EU Summit. We had the India-UK summit a day after that in Udaipur. PM also met the Prime Minister Blair in St. Petersburg earlier this year.

During Prime Minister's September 2004 visit, we had adopted a Joint Declaration which upgraded bilateral relations to Comprehensive Strategic Partnership which listed a whole series of areas for cooperation-" civil nuclear activities; high technology trade; civilian spaceprogrammes; and further developing economic and other relations. We have seen substantial progress in the relationship over the last two years as a result. One of the important areas in this is collaboration in counter terrorism especially in view of recent global developments. For instance, both Delhi and London will be hosting major sporting events �" the Commonwealth Games in 2010 and the Olympics in 2012. So, both countries could, for instance, share information on best practices between our concerned security authorities.

While in the UK, Prime Minister along with the UK Prime Minister will address the India-UK Investment Summit on October 10th which is being organised by the Indo-British Business Partnership Network. The event will also be addressed by Commerce and Industry Minister Shri Kamal Nath and by Mr.Alistair Darling, Secretary of State for Trade and Industry of the UK. About 100 CEOs are expected to attend the event.

The UK is a very important partner for India due to our shared history; a large Indian community of about 1.2 million living in the UK; and the close political and economic linkages. Over 16000 Indian students study in the UK. As you know, there is a strong presence of Indian professional in the IT and other sectors in the UK as well. I just went over the series of high-level exchanges that we have had recently. We see that as continuing in the future.

The UK is our fourth largest global trading partner and the largest in the EU with an annual two-way trade in goods of 5.6 billion pounds and services of 1.8 billion pounds. The UK is also still the largest cumulative investor in India and the fifth largest in India since 1991. In recent years, Indian investments in the UK have grown rapidly and India has emerged as the third largest investor in the UK as well in terms of the number of projects with an estimated investment of over one billion dollars. Another significant indicator of the increasing Indian profile is that nearly 500 Indian companies have offices in the Greater London area.

On the 11th of October, Prime Minister will travel to Cambridge University where he will be conferred anhonorary degree. He will also be meeting members of the Indian community and representatives of the Indian Overseas Congress while he is in London at a reception hosted by our High Commissioner.

After London, Prime Minister will go to Finland, to Helsinki. He will be in Finland from 12th to 14th. On the 12th, he will hold bilateral discussions with the Finnish Prime Minister who, you will recall, had visited India in March 2006. For us Finland is a technologically advanced country with one of the highest per capita growth rates in Europe.

Indian companies have established several links with Finland in high technology areas. Tourism is also another area of promise in our relationship with Finland. Finn Air will be establishing direct flights from Finland to New Delhi from the 30th of October. Our bilateral trade in 2005 was 407 million Euros. We have now seen several Finnish investments in India, Several large Finnish technology companies in India, while Indian companies have also started investing in Finland in the last two years. For instance, Wipro has acquired a company in Finland and so has Sasken Communication Technologies. So, as I said, most of these are in the high-tech area.

Prime Minister will take part in the Seventh India-EU Summit on October 13. This will actually be the fourth summit level interaction that the EU under the Finnish Presidency is undertaking in the last two months because they have just done in September - China, Republic of Korea and ASEAN in which we also participated as a member.

The EU will be represented under the Finnish Presidency by the Prime Minister of Finland Mr.Vanhanen, by the High Representative for Common Foreign Security Policy Dr. Javier Solana, and by President of the European Commission Mr. Jose ManuelBarosso, the European Commissioner of External Relations Mr. BenitoFerreiro-Waldner, and the European Commission of the Trade, Peter Mandelson.

You would recall that the Sixth Summit in New Delhi in September 2005 had seen the adoption of an ambitious Joint Action Programme between India and theEU, the first that we have with any country, to implement the strategic partnership that had been launched at the Fifth Summit at the Hague in November 2004.

India is the sixth country with which the EU has such a strategic partnership, the others being the USA, Canada, Russia, China and Japan. The Joint Action Plan adopted last year provides for strengthening dialogue in consultation mechanisms, for deepening political dialogue and cooperation, for enhancing economic policy dialogue and cooperation, and for developing trade and investment. So, this summit will now review the implementation of the Joint Action Plan.

There has been substantial progress in the implementation of the Joint Action Plan. A high-level trade group was set up, for instance, by the sixthIndia-EU summit under the Joint Action Plan which was supposed to explore ways and means to deepen and widen the bilateral trade and investment relationship. The high-level trade group(HLTG) which was headed by the Commerce Secretary on our side and the Director General of the Trade on the EU side will finalise its report. Its report will be presented to the Seventh Summit. The officials had recommended that a broad-based bilateral trade and investment agreement be negotiated between India and theEU. It is now for the political leadership at the summit to decide on the contents of the recommendation and the rest of the report and on how to take this forward.

For us, as you know, the EU is a very important partner both for the individual EU Member-States and the EU collectively. The EU is home to a very large Indiandiaspora. Taken as a whole, the EU is India's single largest trading partner. One-fifth of our total external trade is with theEU. Bilateral trade has grown steadily between 2001 and 2005 at over ten per cent on average each year to reach 40 billion Euros in 2005. The trend is continuing in 2006. In the first quarter it has increased by about 18 per cent. So, it is quite rapid.

India is now the 11th largest exporter to the EU. We are also important investment partners in both directions, both the EU investment in India and the Indian investment in theEU. The total FDI inflows from the EU into India are about eight billion dollars. It is about 20 per cent of the total FDI flows since 1991. India has also begun to invest in the EU in recent years. In 2003, Indian FDI inflows into the EU were around 600 million Euros as compared to the EU investment inflows into India of about 658 million Euros.

We have had Parliamentary exchanges and all the other normal exchanges that take place between States. The President of the European Parliament was in fact visiting India from the 30th September to the 6th of October. In the last year he has informed us that the European Parliament would be creating a separate delegation to just to look after relations with India.

That is the shape of the three visits. I will be happy to answer any questions that you might have.