Indian businesses based in the U.K. and looking to do business in Europe must be prepared for additional tariffs, customs duties and product specification due to the repercussions of Brexit, according to a Belgian minister.
“If Indian companies are going to Britain, they are arriving in a third country, they are no longer landing in the big internal market of Europe,” Geert Bourgeois, the Minister-President and Foreign Policy Minister of the Flemish government said in an interview. “So they should be aware of this, that to be based there is so far so good, but they are no longer based in the EU. There will be customs and tariff barriers and different product standards. Our ports will be external ports for them.”
‘Wrong for us and them’
“They (the U.K.) will not make a U-turn, they will not come back,” Mr. Bourgeois added. “If I talk to the conservatives or the Labour side, it’s all the same answer: the people have decided. It is wrong for them, it’s wrong for Europe, it’s wrong for us.”
Mr. Bourgeois said that he was more optimistic about the India-EU Free Trade Agreement finally being signed since the high-level negotiators are now meeting to hammer out the details, and added that the policy environment in India was favourable.
“I am now a little bit more hopeful about the FTA because the high-level negotiators are coming together and they [also] feel that over here, the policymakers, ministers, the Prime Minister... they are open for fair trade,” he said. However, the Minister also said that for an agreement to be reached, both parties would have to make concessions, and that there were still some contentious issues to be dealt with.
“There are sectors that are sensitive for each of the parties,” Mr. Bourgeois explained. “Agriculture is very sensitive for India, and India wants Europe to open its market for the labour force.
“We are open [to] it but [only] for high-skilled people. We don’t need unskilled labour. We have a lot of low-skilled people without jobs ourselves, so it’s not interesting to attract people without skills.”
Another sensitive issue was that of investment and arbitration, he said. India-EU could model itself on the Comprehensive Economic and Trade Agreement (CETA) between Canada and Europe, he said.
“I believe we should have a kind of arbitration solution (in the FTA),” Mr. Bourgeois said. “With Canada, we have an international court system in which there are nominated judges from the EU and Canada, and independent judges. It’s also open for other countries. It is a personal wish that we can come to a multilateral investment court with participating judges from various countries, but with very cheap access for SMEs.”
SME interests
“For SMEs, if they have to pay a lot to get their rights, it can be a very serious hurdle for them,” he added. “If Indian companies want to invest in Europe or vice versa, it’s a risk, of course, but you should create at least an environment so that if there is a dispute, you have a system of equal protection. This is also a point of discussion.”
The Minister also said that India could benefit from a technological transfer that would enable it to fully exploit its inland waterways without having to go through the expense and effort of dredging the rivers.
“We have new technologies for our inland waterways,” he said. “We have what we call the pallet shuttle barge, a kind of catamaran, which can transport a lot of goods without having to dredge the waterway because it needs a depth of only six feet to operate in. It can be made in India and could be an enormous opportunity for India to open up the use of its waterways.”
