Communication from the Commission - Developing a Community civil aviation policy towards the Republic of India
Date: 2005-09-05
Institutions: European Commission
Subjects: European Union, India, civil aviation, common transport policy, cooperation policy, economic cooperation, international negotiations, market access

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 5.9.2005 
COM(2005) 409 final 

COMMUNICATION FROM THE COMMISSION 

Developing a Community civil aviation policy towards the Republic of India 

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1. 

1.1 

INTRODUCTION AND SUMMARY 

The  Republic  of  India,  the  world’s  largest  democracy  and  second  most  populous 
nation, is undergoing rapid change and is emerging as an important economic power 
in Asia. After some decades of pursuing its own economic and political path, India is 
increasingly opening up and actively engaging on the world stage. 

Today,  India  is  one  of  the  six  fastest  growing  economies  in  the  world.  India 
represents  a  vibrant  and  rapidly  growing  consumer  market  with  a  fast  increasing 
middle-class already exceeding 250 million inhabitants. Economic forecasts for India 
all point to a continued high level of GDP growth. While India achieved an annual 
economic growth rate averaging 6% during the 1990s, it is currently poised to grow 
even faster at an impressive 8% and above in the coming years. 

1.2 

The Indian economy has clearly benefited from the market-oriented policies pursued 
since the 1990s and reinforced under the current government. India is developing as 
a  key  global  centre  for  outsourcing  for  many  manufacturing  industries  and  service 
companies and Indian industries are becoming internationally competitive. 

The  EU  and  India  already  enjoy  a  close  relationship  based  on  shared  values  and 
goals. Representing nearly one fourth of India’s total trade, the EU is India’s largest 
trading partner and also its main source of foreign direct investment (FDI). 

1.3 

Demand  for  air  transport  in  India  is  increasing  rapidly  both  for  corporate  business 
travel,  international  tourism  (both  foreign  visitors  and  different  Indian  ethnic 
communities living abroad) and domestic travel. 

1.4 

1.5 

The Indian air traffic market is currently among the fastest growing in the world. In 
2004, air traffic in India was reported to have increased by some 25%. With such a 
rapid development in air traffic, serious bottlenecks are occurring in the air transport 
infrastructure both in terms of airport capacity and aircrafts available. 

Market  opening  and  attempts  to  attract  private  and  foreign  capital  to  the  Indian 
aviation market are seen as part of the measures necessary to develop and modernise 
India’s  aviation  sector  in  order  to  meet  increasing  demand  and  consumer 
expectations.  While  the  Indian  aviation  sector  has  long  been  characterised  by  a 
restrictive approach with limited access and strong state control, India has in recent 
years taken decisive steps towards a more open and competitive aviation market. 

Due to its extraordinary growth rates and gradual market opening, India offers new 
business  opportunities  and  a  strong  potential  also  for  growth  for  European  airlines, 
aircraft manufacturers and service providers. 

As a consequence of the “open skies” judgements of the European Court of Justice 
on 5 November 2002, the 22 bilateral agreements between Member States and India 
are  unsustainable  and  need  to  be  amended.  The  Commission  has  been  given  a 
“horizontal” mandate to negotiate with third countries such necessary corrections to 
bilateral agreements.  

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However,  in  view  of  (i)  the  growing  importance  of  the  Indian  aviation  market,  (ii) 
the difficulties encountered by individual Member States in seeking to bring bilateral 
agreements  into  conformity  with  Community  law  even  in  negotiations  where  the 
Indian  authorities  have  requested  and  obtained  significant  additional  traffic  rights 
and  (iii)  the  overall  legal  and  economic  benefits  of  replacing  the  fragmented 
European  approach  in  its  relations  with  India  with  a  comprehensive,  co-ordinated 
and  liberal  approach,  the  Commission  is  of  the  view  that  it  is  now  appropriate  to 
develop  a  wider  range  of  opportunities  between  India  and  the  Community  in  air 
transport. 

This is why India was identified in the Commission’s Communication “Developing 
the agenda for the Community’s external aviation policy”1 as a key target country for 
a Community-wide agreement. Also the Association of European Airlines (AEA) has 
identified  India  as  a  particularly  important  market  in  relation  to  which  a 
comprehensive Community agreement could be justified2. 

In its Conclusions on external aviation relations, the Council has explicitly taken note 
of India as a potential candidate for a future request for comprehensive negotiating 
mandates.3 

1.6 

In India’s response in August 2004 to the European Commission’s Communication 
entitled  “An  EU-India  Strategic  Partnership”4,  India  has  expressed  its  readiness  to 
consider a comprehensive air transport agreement with the EU. 

With  this  Communication,  the  Commission  therefore  recommends  that  the  Council 
authorises  the  Commission  to  negotiate,  on  behalf  of  the  European  Community,  a 
comprehensive  agreement  on  an  Open  Aviation  Area  with  India  combining  market 
opening  with  a  parallel  process  of  regulatory  co-operation  and/or  convergence 
notably in priority areas such as aviation safety, security, environmental protection, 
research and technology and application of competition rules ensuring a level playing 
field and fair and equal conditions for competition.  

Positive exploratory contacts between the Ministry of Civil Aviation of India and the 
services of the European Commission have been made during the first half of 2005, 
which may serve as a good basis for entering into formal negotiations with India. 

THE GROWING IMPORTANCE OF EU-INDIA POLITICAL AND ECONOMIC RELATIONS  

In recent years, the Indian economy has performed impressively well with economic 
growth rates averaging 6% during the 1990s. In 2003, GDP growth in India reached 
8.6%.  

COM(2005) 79 final, dated 11.3.2005 
“Future developments in international air transport to and from the EU: An AEA perspective”, October 
2004 
Council Conclusions of 27 June 2005 on developing the agenda for the Community’s external aviation 
policy. 
COM(2004) 430 final, dated 16.6.2004 

2. 

2.1 

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Representing nearly one fourth of India’s total trade, the EU is India’s largest trading 
partner and also its main source of foreign direct investment. 

EU-India trade grew by 34% between 2003 and 2004 alone. However, India is only 
the  EU’s  12th  largest  trading  partner,  behind  countries  such  as  Taiwan  and  Korea. 
The  EU’s  trade  with  China  in  2004,  for  example,  was  more  than  five  times  bigger 
than trade with India and the EU’s FDI in China was more than 10 times the amount 
of FDI in India. 

These  figures  demonstrate  the  extent  of  the  still  untapped  potential  for  economic 
growth, trade and investment activity in India. 

2.2 

With  its  nearly  1.1  billion  population,  impressive  economic  growth  rates  and 
immense  potential  in  general,  India’s  political  status  in  the  world  is  becoming 
increasingly significant. Intensity in EU-India relations has increased in recent years 
and EU-India summits have been held on an annual basis since 2000. 

In  the  Commission’s  June  2004  Communication  on  “An  EU-India  Strategic 
Partnership”,  the  Commission  proposed  to  further  strengthen  the  political  and 
strategic dimensions of EU-India relations. The Commission proposed a number of 
strategic sectoral dialogues aimed at strengthening the economic partnership between 
the  EU  and  India  including  a  proposal  for  enhancing  co-operation  on  air  transport, 
through the initiation of a dialogue on civil aviation and negotiation of an EU-India 
air transport agreement. 

India’s  response  of  27  August  2004  to  the  Commission’s  Communication  was 
positive. India highlighted its efforts aimed at attracting foreign direct investment in 
the Indian aviation sector and at improving efficiency of airport infrastructure. India 
also expressed its readiness to consider a comprehensive agreement with the EU on 
air  transport  including  in  the  areas  of  market  access,  regulation  and  air  traffic 
management. 

2.3 

At  the  5th  India-EU  Summit  held  on  November  2004  in  The  Hague,  India  and  the 
EU  agreed  to  jointly  elaborate  a  comprehensive  EU-India  Action  Plan  for 
implementing  the  strategic  partnership.  This  Action  Plan  is  currently  under 
preparation. 

3. 

INDIA’S  GROWING  IMPORTANCE  IN  INTERNATIONAL  AVIATION  –  A  MARKET 
PROFILE 

India - an aviation market in rapid growth and transformation 

3.1 

After  a  decade  with  more  moderate  growth  rates  averaging  5%  per  annum,  the 
domestic  aviation  market  in  India  is  booming  as  a  result  of  high  GDP  growth, 
general  higher  income,  a  growing  urban  middle  class  representing  an  important 
potential for tourist travelling, emergence of new entrants including low-cost carriers 
and falling fares. In most recent years the Indian air traffic market has been among 
the  fastest  growing  in  the  world.  In  2004,  air  traffic  in  India  was  reported  to  have 
increased by some 25%. 

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Since 1990, the number of seats available on scheduled non-stop flights between the 
EU and India has increased from 2.6 to 4.4 million in 2004 (+70%).5 As a result of 
recently  agreed  increases  in  traffic  rights,  frequencies  and  available  seats  are 
expected  to  grow  even  faster  in  the  coming  few  years  as  the  new  traffic  rights  are 
being implemented in the market. 

3.2 

Within the recent few years a significant number of new routes have been opened to 
destinations such as Bangalore, Hyderabad, Amritsar, Chennai and Cochin. 

Seven  EU  carriers  currently  fly  passengers  to  India  on  scheduled  routes  while 
currently two Indian carriers (Air India and most recently Jet Airways) fly to Europe. 
In addition, two US carriers carry passengers via Europe to India and back. A total of 
17 city pair routes are now operated between India and the EU. The largest share of 
the non-stop scheduled traffic between the EU and India is with Germany with 32% 
of  the  total  traffic  followed  by  the  UK  (31%),  France  (18%)  and  The  Netherlands 
(9%). 

Of a total number of weekly frequencies between the EU and India of 130 in winter 
2004/2005, Lufthansa and Air India each had a share of 22% while British Airways 
had a share of 15%. 

Looking forward 

3.3 

Future growth rates in Indian air passenger traffic are expected to remain impressive 
in the coming years. The International Air Transport Association, IATA, forecasts an 
average  annual  growth  of  7.8%  in  international  passenger  traffic  to  India  over  the 
period  2004-2008.  IATA  predicts  the  Indian  cargo  market  to  increase  even  faster 
with an annual average growth of 8.4% up to 2008. 

The Centre for Asia Pacific Aviation forecasts total air traffic in India to rise by five 
million  passengers  each  year  over  the  next  ten  years  and  that  India’s  domestic  and 
international  markets  for  the  calendar  year  2004  would  increase  by  up  to  30%  to 
around 20 million passengers each. 

India’s  total  passenger  traffic  is  expected  to  increase  from  approx.  44  million 
passengers  in  2004  to  58  million  passengers  in  2014.6  In  its  2004-2023  Global 
Market Forecast, Airbus is forecasting an average annual growth rate of 6.5% in the 
Western Europe-Indian Sub-continent market over the coming two decades. 

Key market drivers 

3.4 

Historically,  the  Indian  government  has  paid  limited  interest  and  prioritisation  to 
tourism policy. 

However, one of the key drivers in recent international air traffic to and from India 
has  been  tourism.  The  “Incredible  India”  campaign  launched  by  the  Ministry  of 
Tourism  in  2002  has  been  widely  heralded  as  a  major  success.  In  2004,  India 
received  3.4  million  foreign  visitors,  up  23.5%  from  2003.  Arrivals  in  2005  are 

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Source: OAG schedules 
“Asia/Pacific Air Traffic – Growth and Constraints”, Air Transport Action Group (ATAG), 2001 

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expected to surge by up to 30% and the Ministry of Tourism has established a target 
of 40 million foreign tourists visiting India by 2020. 

Also Indian outbound tourism is increasing rapidly and in 2003 soared by some 30% 
to approx. 4.5 million. 

3.5 

Another  expected  key  driver  in  future  demand  for  air  transport  in India  is  fares.  In 
real  terms,  international  fares  have  progressively  fallen  over  the  past  two  decades. 
Such decreases in fares, however, do not appear to have fully materialised in relation 
to  India  as  capacity  constraints  have  driven  fares  to  and  from  India  up  relative  to 
comparable competing destinations in the region. At present, the gap between Indian 
fare levels and competing destinations is reported to be significant. For example, it 
has been reported that a flight to India from Britain or the United States is typically 
around 40% more expensive than a flight to competing destinations such as Thailand 
or Indonesia.  

In  this  context,  it  is  worth  noting  that  following  the  early  2005  “open  skies” 
agreement between the US and India, industry analysts expected considerably lower 
prices to follow from the new agreement. One source expected a 20-30% drop in air 
fares  while  another  expected  current  air  fare  levels  of  1,000-1,500  USD  to  come 
down to around 700 USD over the next 12-18 months as a result of more supply and 
competition. 

Allowing  private  Indian  carriers  to  operate  international  routes  will  increase  the 
competitive  pressures  faced  by  incumbent  carriers.  The  emergence  of  new-comers 
and  low-cost  carriers  on  the  domestic  Indian  market  is  expected  to  have  the  same 
effect within India. 

4. 

KEY TRENDS IN INDIA’S CIVIL AVIATION POLICY 

General policy 

4.1 

4.2 

India’s  civil  aviation  sector  is  undergoing  a  rapid  transformation  these  years.  In 
1990, the Indian government launched a programme of economic liberalisation of air 
transport services which resulted, inter alia, in (i) the announcement of a cargo “open 
skies” policy for international flights; (ii) the permission of non-state owned airlines 
to  enter  the  Indian  market;  and  (iii)  gradual  liberalisation  of  bilateral  air  services 
agreements with third countries. 

The  Indian  government  increasingly  recognises  that  the  aviation  sector  can  be  a 
catalyst of general economic development and in 2003 therefore set up a Committee, 
led by former cabinet secretary Naresh Chandra, to draw up a Road Map as a basis 
for  a  new  national  policy  for  civil  aviation.  It  appears  that  the  current  Indian 
government  continues  to  employ  key  recommendations  of  the  Committee  of 
developing a more open and competitive aviation market in India. 

The report of the Naresh Chandra Committee declared that an integrated approach to 
civil  aviation  is  required,  one  which  is  based  on  the  following  “four  fundamental 
pillars”: 

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•  the introduction of a level playing field for all operators; 

•  increasing private participation and competition by reducing barriers to entry; 

•  adherence  to  stringent  safety  standards  as  well  as  sound  regulatory  oversight  of 

the air transport market; 

•  transparent  institutional  mechanisms  which  provide  for  socially  desirable  but 

uneconomical services. 

4.3 

The Committee’s investigation led to the identification of several overall conclusions 
including the following: 

•  As an immediate priority it looked for a more liberal fiscal regime which would 
include  a  reduction  of  fuel  taxes.  The  government  is  yet  to  adopt  its 
recommendations in this respect. 

•  The committee deemed that airport charges were too high and should be lowered 
and  that  the  supply  of  aviation  fuel  should  be  liberalised  to  allow  additional 
suppliers at airports. 

•  The  Committees’  advocacy  of  the  elimination  of  route  dispersal  rules  seems  to 
have  been  taken  up  by  the  government  in  June  2004  thereby  changing  the  old 
system of mandatory route mix of all operators of routes between major cities and 
“thin” marginal routes to a new system with a levy on private operators allowing 
funding of uneconomical routes (public service obligations). 

•  Similarly,  the  suggestion  that  foreign  equity  investment  (except  from  foreign 

airlines) should be permitted for up to 49% of airlines has been acted upon. 

Market opening and new entrants 

4.4 

At the end of 2004, the Indian government decided to allow privately owned carriers 
fulfilling certain criteria (i.e. having a fleet of at least 20 aircrafts and more than five 
years  of  operating  experience)  to  operate  on  international  routes.  Two  carriers  (Jet 
Airways  and  Air  Sahara)  already  qualify  for  this  and  have  recently  been  granted 
rights from the Indian government to fly to international destinations. 

The  number  of  airlines  providing  services  on  the  domestic  market  is  rapidly 
increasing.  There  are  currently  seven  scheduled  registered  airlines  in  India:  (1)  the 
state-owned  Air  India;  (2)  Indian  Airlines;  (3)  Alliance  Air  (subsidiary  of  Indian 
Airlines);  (4)  Air  Sahara;  (5)  Jet  Airways  (privately  owned);  (6)  Air  Deccan 
(privately  owned  low-cost  carrier);  and  (7)  Blue  Dart  Cargo  (specialised  cargo 
carrier).  

In  2005  alone,  an  additional  five  carriers  are  expected  to  enter  the  Indian  market 
(SpiceJet; Kingfisher Airlines; Air India Express; Indus Airways and Go Air). 

4.5 

The  Indian  government  is  also  continuing  its  policy  of  further  liberalisation  of 
bilateral air services agreements. In December 2004, the Indian government decided 
to  discontinue  the  practice  of  seeking  compensation  under  mandatory  commercial 
agreements between designated companies for imbalances in use of traffic rights. No 
new  air  services  agreements  will  include  such  mandatory  commercial  agreements 

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4.6 

and  existing  mandatory  compensation  agreements  will  be  phased  out  after  a 
maximum of five years. 

As a significant result of the government’s increasingly liberal aviation policy, India 
and the US signed a bilateral “open skies” agreement in April 2005. The agreement 
removes  all  limitations  on  capacity  and  controls  on  competitive  pricing.  The 
designation  provisions  also  remove  all  quantitative  controls  on  market  entry  while, 
however,  retaining  classical  ownership  and  control  restrictions.  In  addition  to 
completely deregulating capacity and access in 3rd, 4th, and 5th freedom markets, the 
new agreement also provides for unrestricted 7th freedom all-cargo services. The new 
agreement is also expected to facilitate the development of new service patterns that 
would  allow  cross-polar  non-stop  services  between  the  US  and  India  that  have  not 
hitherto existed. This will depend on obtaining efficient overflight access to Russian 
airspace. 

India  has  also  agreed  significant  increases  in  traffic  rights  in  recent  bilateral 
agreements with a number of other countries including notably the UK and China. 

Infrastructure bottlenecks 

4.7 

With  the  recent  extremely  high  growth  rates  in  demand  for  air  transport  in  India, 
serious  bottlenecks  are  occurring  in  the  Indian  aviation  infrastructure  notably  in 
terms of airports and aircrafts available. Available airport capacities and services are 
inadequate  with  constraints  both  in  terms  of  runway  capacity,  parking  space  and 
terminal capacities. 

The  Indian  Government  is  seeking  to  attract  private  capital  into  new  partnerships. 
New  green-field  airports  are  being  built  in  Bangalore  and  Hyderabad.  The 
government is selecting strategic partners to become shareholders in the airports of 
Mumbai  and  New  Delhi.  In  March  2005,  the  Indian  Government  invited  financial 
bids  from  nine  pre-qualified  bidders.  A  number  of  established  European  airport 
operators are included in the pre-qualified consortia. 

The  planned  partial  privatisation  of  Air  India  and  Indian  Airlines  has  not  yet 
succeeded  which  has  hampered  modernisation  and  expansion  of  their  fleets  on  a 
commercial  basis  by  private  capital.  The  government  therefore  appears  to  have 
decided to reinforce these airlines and provide sovereign guarantees for purchase of 
aircrafts. 

In  order  to  meet  the  growing  demand  for  air  transport  services  in  India,  massive 
investments in air transport infrastructure are required both in airports, aircrafts, air 
traffic  management  technology  and  supporting  facilities.  The  Indian  Ministry  of 
Civil Aviation expects, for example, that in the next few years nearly €8bn needs to 
be invested in Indian airports. 

In  December  2004,  it  was  reported  that  10  completely  new  airports  were  being 
planned  while  modernisation  of  another  15  airports  was  foreseen  (in  addition  to 
modernisation of the four main airports of Delhi, Mumbai, Calcutta and Chennai). 

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4.8 

4.9 

5. 

5.1 

5.2 

5.3 

Remaining challenges in modernising India’s aviation market 

The Indian government appears determined in implementing a coherent and market-
driven  aviation  policy  based  on  competition  and  equal  treatment.  This  is  very 
encouraging.  The  policy  of  the  Indian  government  continues,  however,  to  be 
criticised domestically for (i) a lack of sufficient transparency at the policy level; (ii) 
slow  decision-making  and  implementation  processes;  (iii)  absence  of  effective 
competition  law;  (iv)  absence  of  an  environment  conducive  to  private  investment; 
and (v) restrictions on direct foreign investment. 

These  concerns  may  be  reflected  in  an  announced  government  policy  White  Paper 
that is expected to be published shortly. 

Technical co-operation 

The  rapid  increase  in  demand  for  air  transport  also  poses  significant  technological 
challenges in relation to safety, security and air traffic management aspects. In this 
context, the EU co-financed “EU-India Civil Aviation Co-operation Project” is being 
seen by the Indian government as a very valuable project. The project started in 2001 
with a currently foreseen duration until end-2006 with a total EU grant of 18 million 
€ in  Community  funding. Both Indian authorities and industry as well as European 
industry have expressed a strong interest in a continuation on a longer-term basis of 
this project or similar co-operation structures. 

CONCLUSIONS:  SUBSTANTIAL  ADDED  VALUE  OF  A  FUTURE  EU-INDIA  AIR 
TRANSPORT AGREEMENT 

Since the 1940s, EU-India relations in civil aviation have been based on bilateral air 
services agreements between individual Member States and India with little, if any, 
coordination at Community level. 22 out of the 25 EU Member States have bilateral 
air services agreements with India (all except the three Baltic states). Most of these 
bilateral agreements are based on single or dual (or in a few cases more) designation 
at Member State level of national carriers which are allowed to operate on routes to 
India. Moreover, traffic rights allowed under the bilateral agreements are also limited 
hence restricting the scope for competition. 

Following  the  judgements  of  the  European  Court  of  Justice  on  5  November  2002, 
existing bilateral air services agreements based on national designation urgently need 
to be amended to restore legal certainty by including Community designation clauses 
permitting designation of any Community air carrier established in a Member State. 

The conduct and outcome of bilateral negotiations in recent months between Member 
States and India have not yet led to the necessary alignment of existing agreements 
with Community law. As a result, bilateral agreements with India remain vulnerable 
to legal challenge. 

However, the Commission’s use of the horizontal mandate in the course of 2005 has 
proven  efficient  in  rendering  more  than  250  bilateral  agreements  compatible  with 
Community law. While India in recent bilateral negotiations with Member States has 
not  been  able  to  immediately  accept  Community  designation,  India  has  committed 

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itself to address this issue with the European Commission in the context of a possible 
future  horizontal  agreement.  Exploratory  talks  have  been  held  with  India  in  recent 
months in this respect and progress has been made. 

Benefits and added value of a Community approach 

5.4 

5.5 

As  the  EU  has  developed  a  strong  Community  dimension  of  its  internal  aviation 
market  it  would  be  logical  and  coherent  to  pursue  this  dimension  also  in  the  EU’s 
external relations. Moreover, the experiences which the EU has gained in this respect 
represent useful references for many third countries. 

There  would  be  significant  economic  benefits  from  an  EU-India  Open  Aviation 
Area.  A  recent  study  commissioned  by  the  European  Commission  has  made  an 
indicative  assessment  of  the  potential  longer-term  economic  benefits  for  both  sides 
involved in a fully liberalised EU-India aviation market, which could be in the order 
of  200  million  €  per  year.  It  is  important  that  negotiations  on  a  possible 
comprehensive agreement are conducted in a spirit which seeks to deliver mutually 
beneficial outcomes. 

Gradual market opening accompanied by regulatory convergence 

5.6 

Obviously, it will be of paramount importance to ensure that opening and integration 
of  markets  is  undertaken  in  a  balanced  manner  that  takes  into  account  other 
important policy objectives and mitigates potential adverse impacts. 

It is therefore important to ensure that the process of market opening is accompanied 
by  a  parallel  process  of  regulatory  co-operation  and/or  gradual  convergence  with 
regard  to  safety,  security,  environmental  and  competition  law  aspects  thereby 
ensuring a level playing field and fair competition based on equal opportunities. 

The way forward 

5.7 

As this Communication has shown, India has embarked on profound changes in its 
civil aviation sector based on gradual market reform and opening. 

Significant efforts will continue to be necessary for the development of the Indian air 
traffic  sector  to  match  the  rapidly  growing  demand  and  increasing  expectations  by 
the  users.  Closer  co-operation  between  the  EU  and  India  would  be  mutually 
beneficial, offer significant new opportunities both for India and the EU and would 
be able to contribute to ensuring an efficient and safe aviation sector. 

Efforts should therefore now be made for air transport to become a key area of closer 
co-operation between the EU and India thus contributing to the Strategic Partnership 
between India and the EU. The Commission therefore considers it important to offer 
India a comprehensive scope for strengthened co-operation in civil aviation. 

Such co-operation must, as first step, address and resolve the legal issues in relation 
to existing bilateral agreements between India and Member States. 

5.8 

However, an agreement with India should not be limited to agreeing on Community 
designation  clauses.  It  should  go  further  and  establish  an  ambitious  framework 
integrating  wider  aviation  issues  such  as  regulatory  co-operation  in  the  fields  of 

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aviation safety, security, air traffic management, technology and research as well as 
“doing-business”  issues  and  industrial  co-operation.  With  respect  to  environmental 
issues,  the  agreement  must  be  consistent  with  the  EU’s  commitment  to  sustainable 
development.  Apart  from  the  economic  benefits  highlighted  above,  the  expected 
growth in air traffic has also unwanted side-effects, notably on air quality and noise 
levels  around  airports  and  through  the  contribution  to  global  climate  change.  It  is 
important that the agreement does not restrict the EU’s ability to apply regulatory or 
economic instruments to mitigate these adverse effects. 

While ambitions should be high, a fully open aviation area with India may take time 
to  develop  and  may  best  be  developed  in  stages  to  allow  a  smooth  transition  and 
market integration based on a gradual implementation of new rules. 

5.9 

The scope of the mandate that the Commission is proposing is outlined in a separate 
Recommendation  to  the  Council,  which  includes  a  proposal  for  negotiating 
directives. 

On  the  basis  of  this,  the  Commission  proposes  the  negotiation  and  conclusion  of  a 
comprehensive  open  aviation  agreement  with  the  Republic  of  India  and  invites  the 
Council  to  authorise  the  Commission  to  enter  into  negotiations  on  behalf  of  the 
European Community on such an agreement. 

The  Commission  will  work  closely  together  with  Member  States  and  all  relevant 
stakeholders  in  further  developing  and  achieving  the  objectives  set  out  in  the 
negotiating directives. 

EN 

11 

   EN