New Delhi: Indian exporters are facing non-
tariff barriers like visa and consular issues in the lucrative
European Union market in spite of growing bilateral trade with
the 27-member economic bloc, a survey has said.
"In spite the growing bilateral trade volume, industry is
unanimous in its opinion that there still exists a discrepancy
between what is projected as an open and uniform regime and
what is experienced by Indian companies during their real life
interaction with the EU," the survey by FICCI said.
Exporters face cumbersome quality testing which increases
the cost and time dimension of Indian companies, it said,
adding that they are also facing the "adverse impact of huge
amount of subsidies enjoyed by EU farmers through free seeds
and fertilisers and a freight subsidy to producers."
In addition, many mid-sized pharmaceutical companies have
been severely hit due to the recent seizure of shipments at
transit ports located in the EU, the chamber added.
"The main impediment in the expansion of services to the
EU were visa and consular issues, non-clarity of taxation and
cross border transaction laws as applicable to Indian service
providers," the survey said.
However, majority of the respondents also said EU is a
very attractive market, owing to factors such as strategic
location, wide consumer base, common visa regime.
Highlighting the problems in doing business with EU,
FICCI said that IT companies face difficulties in obtaining
work permits for their professionals. Moreover, work permits
are still being issued for a particular city only in some of
the EU countries such as Germany.
It further said exporters doing business with more than
one EU country are not able to reap economies of scale by
producing in bulk for both markets.
"This is because the EU countries follow different
standards domestically," it said.
Commercial interaction between Indian and the EU has
grown since 2000 - with current annual trade being 52 billion
Euros, growing by more than three times between 2000 and 2008.
It further said industry is generally optimistic about
India and the EU signing the FTA. However, 60 percent of the
respondents would like to have more information on the direct
impact of the agreement on products they export/import.
Bureau Report
First Published: Sunday, August 02, 2009, 13:44