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      On  20  December 1993, a Cooperation Agreement  between  the  European
      Union  and  the Republic of India was signed in  Brussels  by  Messrs.
      Willy  CLAES,  as  President of the Council  of  the  European  Union,
      Manuel  MARIN,  Member  of the  European  Commission  responsible  for
      development  cooperation, and Pranab MUKHERJEE, Commerce  Minister  of
      India.

   The main elements of the agreement signed today are the following.

   Respect  for  human  rights and democratic principles is  the  basis  for
   cooperation  between the European Union  and India and it constitutes  an
   essential  element of the Agreement, as stated in its Article 1  in  line
   with  all  cooperation agreements concluded by the  European  Union  with
   third countries.

   The  principal  objective  of the Agreement is  to  enhance  and  develop
   cooperation, focussed in particular on :

   .  facilitation of better mutual understanding and strengthening of  ties
      between the two regions in respect of technical, economic and cultural
      matters;

   .  further  development  and diversification of trade and  investment  in
      their  mutual interest, taking into account their respective  economic
      situations;

   .  building   up  of  India's  economic  capability  to   interact   more
      effectively with the European Union;

   .  acceleration  of the pace of India's economic development,  supporting
      India's  efforts in building up its economic capabilities, by  way  of
      provision  of  resources  and technical assistance  by  the  Community
      within  the framework of its cooperation policies and regulations,  in
      particular to improve the living conditions of the poorer sections  of
      the populations;

   .  development  in  their mutual interest of existing and  new  forms  of
      economic cooperation directed at promoting and facilitating  exchanges
      and  connections  between  their  business  communities,  taking  into
      account   the   implementation   of  Indian   economic   reforms   and
      opportunities   for  the  creation  of  a  suitable  environment   for
      investment;
   .  support  of  environmental protection and  sustainable  management  of
      natural resources.

                                   *   *   *

   Under   the  guidelines  of  the  new  agreement,  European   Union-India
   development  cooperation  will  continue  to  concentrate  on  activities
   helping  poverty alleviation particularly in the rural areas  (more  than
   215 million people live under absolute poverty, out of a total population
   of 845 million).

   Efforts in development cooperation are to be targeted :

   .  in the social sector : primary education and welfare;

   .  in agriculture : marketing and management of irrigation systems;

   .  in  infrastructure :  employment creation in rural towns, rural  water
      supply;

   .  in the sustainment of the environment and wherever appropriate.

                                   *   *   *

   As far as economic cooperation is concerned, European Union assistance is
   aimed at :

   .  promoting industrial competitiveness and market penetration in sectors
      where  mutual  interests  of  European  Union  and  Indian  businesses
      complement each other;

   .  improving  horizontal  aspects such as standards  through  a  national
      accreditation  scheme, technology informations through the setting  up
      of  a  technology  information centre,  and  sustainable  institution-
      building  which  are  linked  with the  above  sectors  or  which  are
      perceived to provide future potential for cooperation and trade;

   .  business  to business cooperation and joint ventures of  the  European
      India  and  Indian  private sector through  the  European  Union-India
      Business Forum and ECIP;

   .  reinforcing  liberalisation  efforts such as  in  maritime  transport,
      facilitating access to business information and a better understanding
      on the implications and opportunities of the unified European Market;

   .  reinforcing energy efficiency and related technology transfer  through
      the EC-India Energy Management Centre;

   .  strengthening the value of tourism as an employment opportunity in the
      form of eco-tourism, including game park and cultural tourism;

   .  assisting  specific industrial sectors of interest such as  automotive
      components and upgrading of automotive, electrical appliances and food
      processing laboratories;

   .  protecting the environmental from industrial pollution;

   .  reinforcing  mutual understanding of respective economic,  social  and
      cultural  environment  as a basis for effective  cooperation,  through
      linkages  of  training and higher education  institutions,  visits  of
      journalists and cultural performances, films, etc.

   BACKGROUND

   Cooperation between the Community and India dates back to the early 1960s
   with  India being one of the first countries to recognise  the  Community
   and establish trade relations.

   The  first EC/India trade agreement of 1973 was replaced by a  commercial
   and economic cooperation agreement in 1982 which has been developed  into
   the new agreement.

   Development  cooperation, initiated in 1976, expanded quickly. Given  its
   size, India soon became the largest recipient of EC aid : since 1976  the
   EC  has  committed over 1.4 billion ECU, all in grants  (94%  development
   aid, 4% humanitarian assistance and 2% economic cooperation).

   The EC is India's largest trading partner, with a share of 25% of India's
   exports and 33% of its imports. Trade is about 1.1 billion ECU a year  in
   both  directions.  The  main  items of India's  exports  to  the  EC  are
   textiles,  yarn fabrics, garments and jute (34%), leather (14%),  carpets
   (6%)  and  engineering  goods (5%). The EC's main exports  to  India  are
   manufactured goods (machinery and transport equipment).

   India  is  ranking  second (after China and now  before  Brazil)  in  the
   utilisation  of  GSP.  Its economy has experienced an  annual  growth  of
   approximately  5.5%  of  GDP  in the 1980s.  The  GDP  breakdown  is  34%
   agriculture,  27%  industry and 39% services. The Indian  economy  has  a
   strong  element  of  duality  :  while  probably  one  of  the  ten  most
   industrialized nations in the world, over one third of GDP comes from the
   rural  sector, which employs three quarters of  the  population.  Because
   land  area under cultivation has effectively reached its physical  limit,
   expansion of agricultural production to meet the needs of the economy and
   of a population growing at 2.1% per annum must come from  intensification
   of production.

   Human  capital is unevenly developed : while over 50% of  the  population
   are  illiterate, there is a large pool of highly qualified  manpower  (10
   million graduates).

   On  26  October  1992,  the Council authorised  the  Commission  to  open
   negotiations  with  India  with a view to concluding  a  new  Cooperation
   Agreement.  Two negotiating sessions took place (16-18 November and  7-11
   December 1992), ending with the initialing of the Agreement.

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