In an interview to CNBC-TV18, Hahn elaborated that the primary focus during his visit to India was to promote EU bonds as a viable investment option for Indian investors. Launched three years ago, these bonds are part of the EU’s broader strategy to finance the recovery and resilience of the European economy.
Hahn stated, “The RBI is the key player in India, and their opinion is decisive for investors. He underscored the EU bond’s attractiveness by highlighting its AAA rating, sustainable nature, and competitive yields, making it a safe and profitable addition to any investment portfolio. Hahn believes that a strong endorsement from India’s financial institutions could significantly boost interest in EU bonds, benefiting both economies by diversifying investment opportunities and promoting cross-border financial collaboration.
The India-EU Free Trade Agreement has been a long-standing goal, with negotiations taking place over several years. Hahn acknowledged the complexity of such talks but remains optimistic about progress, especially as both India and the EU have recently begun new parliamentary cycles.
With strong political commitment from leaders like Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen, Hahn expressed confidence that the next India-EU summit, likely to take place in the first half of 2025, would be pivotal. “We are aiming for a very comprehensive free trade agreement because we are talking about a potential joint market of 2 billion people,” he noted.
Hahn also touched on the EU’s substantial presence in India, where around 6,000 European companies are already active, providing 2 million direct jobs and 5 million indirect jobs. However, he believes there is still room for improvement, particularly when comparing EU investments in India to those in other emerging markets like Brazil and China.
Below is the excerpt of the interview.
Q: What can the RBI and the Finance Ministry of India do when it comes to greater interest in investing in EU bonds? What is the kind of support that you’re looking out for?
Hahn: The core purpose of my visit in particular is to promote the so-called EU bonds, a new product which we have since three years in order to finance the recovery and resilience of the European economy and to strengthen the European single market. We are looking also for investors from outside Europe.
RBI is the key player here in the market and their opinion is decisive for investors to invest or not to invest. For instance, to say that the EU bond is an attractive financial product, because we have AAA, we have very attractive yields, it’s safe therefore, it’s sustainable, it’s successful, it contributes to a diversification of a portfolio. So if this message is passed by the key responsible institutions of India, it’s certainly extremely supportive and conducive.
Q: About the India-EU FTA talks, which have been on for some time, what do you think is the progress right now, and where are we really headed in terms of concluding this deal?
Hahn: Such negotiations are, by definition, a very complex one, and that’s why it takes time. But I think we have now an excellent opportunity because in India, but also in Europe, a new parliamentary cycle has just started for another five years. There’s a strong commitment of Prime Minister Modi, Commission President Ursula von der Leyen. It’s always important that there’s also a top-down injection of energy, and that’s why I’m deeply convinced that, in particular, the next EU-Indian summit in most likely the first half of next year will be again a very important point for taking stock about the negotiations. What we are aiming is to have a very comprehensive free trade agreement because we are talking about a potential joint market of 2 billion people.
Q: About EU presence in India right now in terms of the number of companies present, the kind of investments, job creation and areas which you would be most interested in as far as the Indian economy goes?
Hahn: In general, one could say already today around 6,000 European companies are active in India. We provide 2 million jobs and indirectly 5 million jobs, but indeed more could be done. If I look for instance at investments in Brazil, its three times more, China two times more. Having in mind the potential of India, there is certainly space for improvement.
Q: In terms of job creation, what are the kind of opportunities that you see are there between EU and India right now and what could happen in the next few years because this is a priority for the Indian government?
Hahn: I think one very important area where we are also very much aligned in our efforts is the actions and measures against climate change. For us, the Europeans, the financing of the green transition is very important. That’s why we have committed ourselves to spend around one third of our budget, which is altogether two trillion for seven years, to finance the green transition. And by the way, that is also the reason why we are issuing EU Green Bonds.
Currently we have already issued around 65 billion EU Green Bonds and the goal is around 200 billion EU Green Bonds and this is about financing green technology, green business and I think here we share the same interests.
It’s not by chance that very recently the European Investment Bank provided a 1 billion euro loan to India for precisely the setup of a blue hydrogen plant which is in particular providing hydrogen for instance for the steel industry but we are doing also something in water purification, water treatment, underground lines, smart cities, everything which is extremely important for India and for improvement of the environment, reduction of CO2 emissions.
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