Trade is key for Indian prime minister visit

The visit by Narendra Modi, the business reforming prime minister who was elected last year, will be first by an Indian prime minister since 1956.

The visit is one of major importance and offers an extensive opportunity for Ireland to reposition itself with one of the largest and fastest growing economies globally.

The World Bank in its recent release upgraded its GDP forecast for India to 7.5% in 2015, making it the fastest growing economy globally. It is expected to retain that status for the forecast period to 2017.

Its currency, the rupee, has also been one of the most stable internationally in recent years.

Trade and investment relationships between Ireland and India have been very sluggish in recent years, with exports last year falling by 18% and very little by way of inward investment from Indian business, which has been investing heavily internationally.

For a country with long cultural ties with India, Ireland is at an early stage in the development of its economic ties with India.

To put it into context, exports to India last year were below our exports to Portugal. Irish governments in recent years have focused heavily on building trading relationships with China, to the detriment of other large and growing Asian economies such as India.

A quick look at the trade mission count alone over the past decade shows China as the predominant country visited.

But activity in the market is growing. Enterprise Ireland is already working with over 70 Irish companies who are established exporters to India.

And over 30 of these companies, ranging from construction services to pharmaceutical, medical devices, software and IT, as well as education, have their own offices in India.

A further 100 Irish companies are working with Enterprise Ireland in the early stages of selling into this market.

One major area that Ireland can offer co-operative assistance to India, and help build trading relationships, is the pharmaceutical products sector. The recent trade huff between India and the EU was sparked by the EU in May of this year when it banned around 700 Indian produced pharmaceutical products.

This resulted in the Indian prime minister’s office cancelling a meeting with the EU trade commissioner to discuss restarting the talks on the free trade accord, stalled since 2012. The EU maintains there were flaws in the clinical tests by India’s testing centre.

The Indian government believes the move by the EU is a trade protection measure.

The pharmaceutical sector is Ireland’s largest export sector, accounting for over €50 billion in exports last year which placed Ireland as the seventh largest exporter of pharmaceuticals globally.

It is therefore a sector that Irish regulatory, government and business interests share a major stake in.

The Government could offer Mr Modi a forum or “think-tank” comprising executives pharma companies, both branded and generic, Irish medicines board officials, scientists and researchers to review the issues and interface with the EU officials on this matter of high importance to India.

Hence, the resolution of the spat may not be easily achieved, but we are ideally placed to provide an independent resolution mechanism.

The whiskey market is another sector where a trade spat with the EU has effectively closed off the largest global market, India consumes about half of the world’s whiskey.

The EU does not recognise Indian whiskey as it is made from molasses, and hence cannot be sold in the EU as a whiskey. With no immediate solution in sight, this could also be a useful area for our diplomats to engage with the Indian delegation.

India has also been identified as a priority market for international students in Ireland’s education strategy, “Investing in Global Relationships”.

Education is the key focus of two trade missions planned for India this year. Indian students spend an estimated €900m in further education abroad each year.

Irish universities have been targeting this market, which currently is dominated by the UK universities.

Plenty for Enda Kenny to discuss with Narendra Modi.

John Whelan is a leading international trade consultant


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