“We are in favour of the proposed India-EU FTA” March 2018 issue

H. E. Jan Luykx, Ambassador, Kingdom of Belgium to India

“We are in favour of the proposed India-EU FTA”

He doesn’t need subtitles while watching Bollywood films as, by his own admission, he fairly understands some bit of the language. Perhaps diversity then, as he puts it, is not just the essence of the Belgian economy. In a candid talk with The Dollar Business, Ambassador of the Kingdom of Belgium to India Jan Luykx, discusses why India assumes a significant position as a trading partner

Interview by Neha Dewan | The Dollar Business

TDB: Not surprisingly, the top three trading partners of Belgium are European countries. How important then is India in Belgium’s scheme of things?

India's exports to BelgiumJan Luykx (JL): India is, in terms of client, for Belgium, I think in the 10th position and in terms of us as a client for India, in the 17th position, which is pretty good. And even within EU, we are the second most important trading partner of India after Germany. So, it is a very good position. As far as the top three partners being European countries is concerned, you need to understand that intra-EU trade is something very different. EU is an internal market, which means there are no borders whatsoever and there is complete free flow of goods and services. So, it is normal that three of our neighbours – Germany, France and Netherlands – and across the channel UK are our most important trading partners. They are just next door and because there are no real borders, trade flows quite easily. Now, if you look at extra-European trade, Asia is about 10% of our global trade. Within that 10%, India is a major trading partner, perhaps the most important trading partner in Asia after China and Japan. And there is no reason to believe this position won’t go further up, particularly considering that the Indian economy is growing.    

TDB: Belgium, being less than 1/100th of India in both size and population, exports substantially more goods and services than India. Tell us the secret behind this.

JL: There is no secret – everybody knows we are a very open economy. That is the reason. Our economy has been much more open than India’s since the 19th century. In that sense, we are way ahead in terms of importing and exporting goods. Our exports and imports are 150% of our GDP. Foreign trade is the essence of our economy.  

"Our economy has been much more open than the Indian economy since early 19th century"

TDB: India-Belgium trade has almost always been in favour of Belgium. Do you expect India to impose trade barriers as the new government tries to rein in the spiraling trade deficit?

JL: We haven’t seen any indication that India would be doing that. India is a member of the WTO, just like EU and so, I think any type of import restrictions would be talked about in the international context first. At least, as far as I am concerned, I haven’t seen any specific measure by the Indian government in this direction. There has been a tendency, but then we do have a trade surplus with many countries in the world because we are export oriented. I am sure for India it is more important to, in general, export more goods and services, whether it is to Belgium or to EU or to US. So I don’t think, you can really make this country specific – this is more of a structural issue. Again in that sense, since the Indian economy is growing at a healthy rate, exports are probably going to increase, including those to Belgium.

TDB: Belgium imports refined petroleum oil in massive quantities and India’s top export is diesel oil. Why then does Belgium not import much of it from India?

JL: Our economy is private-sector driven. The government doesn’t interfere in what companies buy or don’t buy. So, I guess it is a matter of availability and pricing. We don’t have regulations on this – it is an EU competence.

Belgian-exports-and-imports-TheDollarBusinessTDB: In what way are you trying to improve trade ties between India and Belgium?

JL: We are trying to know each other better. We try to show what Belgium is all about. That’s important. Secondly, we try to help companies, who want to sell in India, to come and find their way around. We also try to stimulate investment. We try to do it in both directions because investment attracts trade. So, the more companies invest, the more trade exchanges take place. At present, there are about 160 Belgian companies active in India and there are about 80 Indian companies present in Belgium. That, in itself, will also structurally increase bilateral trade. It is also important for us to remain competitive in the global context. When we are in India we focus on India, but of course in Brussels they focus on the world, because they want to be able to export everywhere. It’s clear that a lot of Belgian companies are interested in India and the Indian market because of its size. This is why more and more of them are coming. It will also open the door a little further for foreign trade.

Belgian exports and imports are worth over 150% of the country’s GDP and trade has been an integral part of policymaking for decades

India-Belgium merchandise trade-TheDollarBusiness

TDB: As a founding member of EU and being its headquarter, tell us when do you think India-EU FTA can really become a reality.

JL: I believe, for some time, there was a lull in negotiations. There is a new government here, which was reviewing all existing FTAs. And I guess, this review has finished and we have to see the results of that. I think, new decisions will be taken on the basis of that review. Also, in Europe, there is a new European Commission that has just started functioning. We have a new trade commissioner as well. So, we are expecting to see some movement in the future. FTA is certainly a good thing to have – we are in favour of it.

Belgium's top trading partners-TheDollarBusiness

TDB: What potential do you see between India and Belgium when it comes to academic exchange?

JL: There are two sides of academic exchange. On one side there is cooperation between universities, exchange of academics and working on certain projects. On the other side is the education market. In Belgium, practically all are post-graduates and the courses are in English. Recently, we had the European educational fair in India and the representatives were happy that they got a lot of queries, which showed that students were very interested. We know there is a lot of potential for Indian students to come and study in Belgium. Also, the cost of education in Belgium is much lower than that in other Anglo-Saxon countries. We have high-quality universities in all fields – engineering, science, business, multiple sciences etc. So, I think the potential for more Indian students to come is absolutely there. There are few instances of the reverse as well, of students from Belgium coming to study in India. I, myself, have done an M. Phil at Delhi University in the 1980s.

TDB: At present, the diamond sector is the largest component of our bilateral trade, with many Indian nationals engaged in diamond trade in Antwerp. What other areas do you think hold promise as far as trade is concerned?

JL: We have a very strong position in the chemicals and pharmaceutical sector. Then there is processed foods, fruits and vegetables. There are also quite a number of new and growing sectors such as renewable energy, logistics, infrastructure, agro-food and aerospace. One should also note that the services sector accounts for almost 70% of our GDP. We are the logistics heartland in Europe.

TDB: Belgium is known to have expertise in certain areas of science and technology. What are the possibilities of cooperation in this area?

JL: The government here is focusing a lot on smart cities and the Clean Ganga project. We have a lot of technologies available in terms of environment and water treatment. We try to talk to people and tell them we have this. We tell them we have universities or organisations that are active in these fields. We are in continuous contact and are in the process of identifying who is busy with what. Our job is to identify the right people, so that things can get moving. We are facilitators.  

" ‘Make in India’ is an ambitious project and we are looking forward to it "

TDB: Are you trying to promote Belgium as a tourist destination among Indians? Are you also looking at tie ups with Bollywood filmmakers, which a few other European nations have already done?

JL: The beginning part of the recent movie PK has been shot in Bruges in Belgium. This wasn’t a tie up. It was a one off. We certainly hope that more people will come after this. I have spoken to Mr. Hirani (PK’s director) and he is very happy to have shot in Belgium. I have seen the movie myself as well. We had gone for a special screening. There were no subtitles, but I know a bit of Hindi to be able to follow a movie. It was actually quite a fun movie! We now have a vehicle to promote film making in Belgium. We have a tax shelter for making movies and a lot of film companies are now coming forward. Even though we are quite built up country, we still have some nice nature, hills, forests and river. So, it’s a good combination. There is another factor that impacts the number of Indians visiting Belgium – the commemoration of the start of the World War I. The World War I started basically in Belgium, when we were invaded in August 1914. Tens of thousands of Indian troops had then come to fight with the allies against the invaders. Some of the major battles at the beginning of the war were fought on Belgian soil. Thousands of Indian soldiers died over there. So, there is also a special arch that has been built called The Menin Gate. A lot of visitors come to see this place, commemorate the war and also their ancestors who fought the war.

TDB: What hopes do you have from the Modi government in boosting Indo-Belgian trade relations?

JL: I think the hopes for trade are related to the general picture too. From what PM Modi has said, it is one of his main aims to improve the business climate in India. In that sense, whatever he will achieve, will be positive for trade in general. So, we are very optimistic. We expect to see steps being taken to make it easy to do business in India and make things more efficient. It’s all very positive. ‘Make in India’ is a very ambitious programme and we are really looking forward to it.