Belgium is a Federal State composed of two Communities (Flemish and French-speaking), each with its own language and

culture, and 3 regions (The Walloon region, the Flemish region and the Brussels-Capital region) each with its own history. The Federal State retains responsibility for, among others, national defence, justice, finance, social security, public health. The communities have powers related to education and matters involving direct services to individuals (certain aspects of health). The regions have responsibilities in socio-economic matters such as land use planning, housing, employment, energy. There are areas of shared responsibility :economy, transportation environment. As a result of the institutional architecture, the EO policy of the French Community is restricted to the matters it is responsible for, among which the major issues are education, womens participation in decision making,violence against women. The issue of employment (equal pay for equal work for example) can only be dealt with within the Community Public Service. Belgium became independent from the Netherlands in 1830 and was occupied by Germany during World Wars I and II. It has prospered in the past half century as a modern, technologically advanced European state and member of NATO and the EU. Tensions between the Dutch-speaking Flemings of the north and the French-speaking Walloons of the south have led in recent years to constitutional amendments granting these regions formal recognition and autonomy. Social aspects According to NIS report it was computed that Belgian consumer spends most of his money on rent, food, liquor and tobacco and transportation. Compared to 1995 they are now spending less of their income on essential goods such as food, clothing, rent and health care, although food and rent are still the two most important expenses. Other expenditure such as heating, furniture, travelling and financial services remained stable over a period of 5years. The Belgian coast has the greatest appeal and is mainly visited by Belgian tourists (70 %), followed by German tourists (11 %).Belgium plays a central role in the gastronomic life of Western Europe. The Belgian is well-known for their Burgundian lifestyle and they take great pleasure in sharing with their guests. The restaurants are known for their quality and hospitality. Belgians are best approached with the necessary modesty and reserve in making contact.In Belgium they have a lot of respect for authority and the relationship between employer and employee is rather formal. In negotiations it is important to know who you are talking to, because that person isnt necessarily the one that makes the decisions. Belgians usually need some time to think everything through before making a decision. Belgians are very good at making compromises, but this also means that they can be very reserved and dont immediately say what they think. Food is very important in Belgium. A lot of business is conducted at the dinner table.

Legal factors
Belgian law The Belgian civil law system is influenced by English constitutional theory; accepts compulsory ICJ jurisdiction, with reservations. Retail trade legislation regulates consumer protection and other matters such as pricing, special offers, clearance sales, advertising and sales from a distance. Online sales or e-shopping are not regulated in Belgium therefore Belgian Trade Law is applied. This law doesnt apply to purchases from salesmen abroad, in this case the general agreements of the company itself apply.Customs and other duties To simplify documentation, to facilitate trade and to computerise the communications of customs data, the EU has issued the Single Administrative Document (SAD), which is used as export, transit and import declaration. Belgian Customs also apply simplified procedures for goods imported from countries outside the EU which can be transported directly to the premises of the firm and be cleared there. The same facilities also apply to exported goods which can be cleared for export outside the EU on the firm's premises. In some cases an invoice or dispatch note can be substituted for official Customs documents. It is then necessary to establish a monthly listing of all import and export movements. Expertise as a trading nation means also that Belgium is extremely suitable for the temporary storage of goods brought from all over the world and for their world-wide distribution to the customer afterwards. The numerous distribution companies established in Belgium have access to simplified procedures which are flexible and cost reducing. Belgium applies the common external tariff (CET) to products imported from third countries. The creation of the common external tariff by the European Union has resulted in Member States' protection from third countries being standardized and in the creation of a Community preference (as imports from another Member State are not subject to customs duties, by definition they are given more favorable treatment than imports from a third country). VAT on import VAT between EU member countries is based on the 'Destination Principle'. The European exporter will need to obtain the VAT registration number of their customers and quote it on their sales invoices along with their own VAT registration number. Invoices do not have to be printed in the foreign language. The UK exporter will zero rate the goods, and the importer in Belgium will declare the goods on their VAT return form. Excise duty Excise duty applies to spirits and alcoholic products, non-alcoholic drinks, mineral oils and tobacco products. Import restrictions With respect to the import of certain (non-EU) goods into the free circulation of the EU, anti-dumping duties or compensating levies may become due. Furthermore, in some cases

an import license must be filed along with an import declaration as such. For some products, the issuing of import licenses is limited to the amount of import quota that is available. Product requirements As a member of the European Union, Belgium is obliged to include all EU-guidelines concerning product safety and environmental and consumer protection in the national legislation. Products provided with a CE-marking can enter the Belgian market without any problems. Information on the regulations on quality, labeling and packaging of foods are mentioned in the Belgian Food and Drugs Act. To harmonize national measures concerning packaging and packaging waste the European guideline 94/62/EG provides a high level of environmental protection and ensures the functioning of the internal market. The Member States must introduce systems for the return and/or collection of used packaging to attain the following targets: recovery must be 50 % to 60 % and recycling must be 25 % to 45 %, with a minimum of 15 % by weight for each packaging material. Belgian law requires that their consumers are able to understand the labelling on imported goods. All labels should give instructions in the regional language (either Dutch, French or German). Misleading marks are prohibited, and all containers on which an importer or distributor's name is shown must bear a clear indication of their foreign origin. Foodstuffs must show the net weight in metric units on the outside of the wrapper or container, and some must show the importer's name and address or registration number, together with any other markings required by specific legislation. The Belgian law also imposes strict regulations on the indication of the country of origin. Mandatory mentions are: product name, list of ingredients, content, name and address of producer, shelf life, preservation regulations and users instructions, place of origin, percentage of alcohol, genetically engineered or not.

Economic factors
Open economy Belgium is a modern private enterprise economy that has capitalized on its central geographic location, its highly developed transport network, and its diversified industrial and commercial base. Industry is concentrated mainly in the populous Flemish area in the north. With few natural resources, Belgium must import substantial quantities of raw materials and export a large volume of manufactures, making its economy unusually dependent on the state of world markets. About three-quarters of its trade is with other EU countries. Public debt is about 100 % of GDP, and the government has succeeded in balancing its budget. Belgium, together with 11 of its EU partners, began circulating euro currency in January 2002. Economic growth in 2001-2002 dropped sharply due to the global economic slowdown. Prospects for 2003 again depend largely on recovery in the EU and the US

Gross Domestic Product In 2001, Belgium's GDP could be broken down as follows: agriculture 1 % , industry 24%, services 74 %. Belgium can therefore be called a developed economy. Nevertheless, it should not be forgotten that the majority of service activities (in the private sector) are very closely linked to industrial activity. Over a period of 4 years the GDP took a serious dive from 2.7 % in 1999 and 3.7 % in 2000 to 0.8 % in 2001 resulting in 0.7 % in 2002. Inflation Over the last 10 years Belgium has had real economic annual growth of 2.1 %, compared to 2.0 % for the EU as a whole. The average inflation was 1.9 %, compared to 2.8 % for the EU. During the nineties there was a constant low to moderate inflation with an average of 1.2 % (1996-1999). Since 1999 inflation has risen. In 2000 the average inflation was 2.5% with an all-time-high of 3.4 % in September 2000. In 2001 there was again an average inflation of 2.5 %. This rise is due to the high oil prices and the devaluation of the euro. In 2002 inflation gradually dropped to 1.6 % Foreign trade In 2002, the total value of exports was 226.2 billion and of imports 208.7 billion. Even though the share of services in trade relations is growing rapidly, around 70 % of Belgian exports and imports still involve goods. Table 44.1 Primary trading partners of Belgium (2001) Export 2001 Germany 18% France 17% The Netherlands 12% UK 9.6% Import 2001 The Netherlands 18% Germany 17% France 14% UK 8%
Source: CIA

Belgian trade focuses very much on the European market. Half the goods exported by Belgium are sold in neighbouring countries (Germany, France and The Netherlands), while one quarter go to other EU member states. Imports follow the same pattern more or less. The national currency of Belgium is the Euro. The exchange rate was 1.18220 USD per Euro in June 2003. Employment In 2002 there were 375,446 unemployed people looking for a job in Belgium In 2002, Belgium had an unemployment rateof 6.9 %. It is striking that the number of unemployed males rose faster than the number of females. Also unemployment amongst the population under 25 years of age rose faster than general unemployment. Less than 3 % of the

professional population is active in the primary sector, the industrial sector accounts for over 25 % of employment in Belgium, but the strongest sector remains the service sector. Important industries The most important industries in Belgium are: engineering and metal production, motor vehicle assembly, food and beverages processing, chemicals, basic metals, textiles, glass, petroleum and coal. Consumer and retail trade The Belgian retail trade is dominated by foreign companies, especially the food market (supermarkets) and the clothing sector. The Netherlands are well represented in Belgium, but so are France and Germany. Demography Population On the 1st of January 2002 the official population of Belgium was 10.309.725. In 1 year Belgium gained 46.311 inhabitants as a result of migration, regularization and natural growth.

Political factors
Government The official name of Belgium is Kingdom of Belgium. King Albert II has been Head of State since 1993. The capital of Belgium and also of Europe is Brussels. Belgium is a federal parliamentary democracy under a constitutional monarch. The Federal State consists of Parliament and respectively the legislative and the executive power. The 3 regions (the Flemish region, the Walloon region and the region Brussels) and 3 communities (the Flemish, French and German community) all have their own administration and council. The authorities of the Federal State are matters relating to the general interest, such as army, police, justice, social security and public health. The regions are authorised to make decisions on economic policy, but the Federal State guards the economic unity of the country. Administrative divisions Belgium is divided into 10 provinces (Antwerpen, Vlaams-Brabant, Waals-Brabant, Hainaut, Liege, Limburg, Luxemburg, Namur, Oost-Vlaanderen, West-Vlaanderen)

Technological factors
ICT-sector The Belgian ICT-sector includes the hardware and software market, telecommunications and new technologies such as Internet, e-commerce and e-government. Although Belgium is a highly industrialized country at the heart of Europe with a strong services sector, hosting many international institutions and multinational corporations, the information

technology sector was slower in developing in comparison to other EU countries. The liberalization of the telecommunications market in 1998 gave the industry a major boost, and over 40 licensed operators now compete in this market. The expansion of the mobile market is now beyond its peak, and has reached a penetration level comparable to most European countries. Like most eveloped countries, the Belgian ICT sector has been suffering from the downturn that has been affecting the sector world-wide since mid-2000. Nevertheless, the largest local players, in hardware, software and telecoms alike, have managed to cope very well, and in some cases have continued to experience healthy growth and steady profits. Logistics Road network Over the last few years Belgium hasnt invested much in road infrastructure and this has lead to enormous traffic problems in the major cities. The present policy is to maintain and modernise the road network, because it still is the most popular way of transportation. Railways Transportation by railway is conducted by the NMBS Nationale Maatschappij der Belgische Spoorwegen. The investment plan of 1996-2005 of the NMBS provides new investment in quality improvement, a more efficient infrastructure and the maintenance of the railways. The improvement of international connections is one of the most important points of interest. Shipping Belgium has 4 sea ports: Antwerp, Ghent, Seabruges and Ostend and 3 inland ports: Brussels, Lige and Charlerloi. The port of Antwerp is the second largest in Europe and the most important link in the international trade of Belgium. Aviation The most important airport is the national airport Zaventem near Brussels. It ranks eleventh within Europe. Smaller, regional airports are: Antwerp-Deurne, CharlerloiGosselien, also called Brussels South, Lige-Bierset and Ostend Airport. With regional airports freight traffic plays a much larger role than transport of passengers. Supply chain management Thanks to its central location, Belgium serves as a stepping stone to the European Union. Some 65 % of the EU's economic activity is located in an area 1,500 km long and 200 km wide running from Liverpool (UK) to Genoa (Italy). Belgium is located right in the centre of this area and therefore deserves to be called the hub of Europe. Belgiums role as a transit zone is due chiefly to the fact that 20 % of European road traffic is done by Belgian carriers. In addition, Antwerp is Europe's second largest port (after Rotterdam) and one of the 10 largest in the world. India-Belgium Relations

Diplomatic relations between India and Belgium were established in 1948 and our bilateral relations are cordial and friendly. In recent times, Belgium has acknowledged the growing importance of Asia and has emphasized the value of strengthening economic relations with India Bilateral Treaties and Agreements The agreements signed and in force between India and Belgium are as under: Social Security Agreement in November 2006 (came into force in September 2009) Agreement on cooperation in the field of Science & Technology, November 2006 Agreement on Avoidance of Double Taxation (DTAA)- August 1997 Bilateral Investment Protection Agreement (BIPA) signed between India and BLEU in November 1997. Cultural Agreement- September, 1973 Air Services Agreement- April, 1967 Economic and Trade Relations- Belgium has emerged as one of Indias important trading partners in the EU. Trade in gems and jewelry constitutes over 75% of the bilateral trade. It has been our objective to diversify bilateral trade by expanding the trade basket. Some promising areas for diversification are information and communication technology, pharmaceuticals, biotechnology and automotive parts. Indias IT sector is well represented in Belgium, with all the big IT companies having their establishments. Several Indian companies in the chemicals sector have also established offices/warehousing facilities in Belgium, particularly near the port city of Antwerp. Belgian business interests in India cover energy, ports, dredging, construction, banking and finance, electronics and software, chemicals and fertilizers, solar energy and biotechnology. The Customs authorities in India and Belgium agreed in 2007 to establish a pilot project: Customs Secure Trade Lane between Antwerp and Nhava Sheva Ports to facilitate exchange of information which is expected to result in trade facilitation. Science & Technology cooperation- A Belgian satellite was launched by India in 2001. An MOU on cooperation in space technology was signed between the two sides in November 1998. A framework agreement for cooperation in Science and Technology was signed during the visit of Belgian PM to India . The two sides have agreed to cooperate in the areas of Nano Science and Technology, Life Science, Health care and Agro Bio Tech, new energy resources and clear energy, astronomy and astro-physics, environment and global change, transfer of technology and innovations, mobility of researchers and innovators. It was agreed to exchange lists of nationally funded projects for identification of areas of mutual interest and networking of research groups. Mobility among researchers would be supported through call for proposals, first of which to be made in June 2011.Joint workshops are also proposed to be organized , commencing 2012, to facilitate information exchange and enhancing interaction between scientific communities on both sides. Economic Joint Commission Meeting - The 11th round of Economic JCM between India and Belgium- Luxembourg Economic Union (BLEU) took place in Brussels on May 4-

5, 2009 after a gap of eight years. The two sides reviewed the ongoing cooperation and discussed possible cooperation in the fields of transport, iron and steel, diamonds trade, phytosanitary, tourism, biotechnology and pharmaceuticals, ICT, aeronautics; investment and market access matters; financial sectors; science and technology; bilateral social security agreement; Consular matters etc. The meeting provided an excellent opportunity to review the present status of our economic relationship and also to focus on the future areas of bilateral cooperation. The 12th JCM took place in New Delhi on 15 April 2011. Both sides discussed market access issues, cooperation in civil aviation and aerospace sector, renewable energy sector, information technology sector, recognition of certificate of competency of sailors, interest of Belgian businesses in the infrastructure sector, and progress in the revision of Double Tax Avoidance Agreements, Business Events: The Indian Merchants Chamber (IMC) held its annual event India Calling Conference 2009 in Brussels from 30 September - 2 October 2009 in partnership with Belgo-Indian Chamber of Commerce & Industry (BICC&I) and Europe India Chamber of Commerce (EICC). The event was jointly inaugurated by the Minister of Overseas Indian Affairs with the Belgian Foreign Minister on 30 September 2009. The conference was attended by around 100 company representatives from India and similar number from Belgium, and some from other EU States. An India-Belgium business meeting, Brilliant India was organized in Brussels on 9 December, 2010, on the occasion of the visit of our Prime Minister. Leading business persons from both sides participated in the event which was presided by our Commerce and Industry Minister, Shri Anand Sharma and by the Belgian Deputy Prime Minister and |Minister of Foreign Affairs, Mr. Steven Vanackere. Bilateral Trade - Belgium is the second largest trading partner of India in the European Union with annual bilateral trade turnover amounting Euro 10.4 billion in 2010. India is the 5th largest exporter to Belgium (after USA, China, Japan and Russia) and 2nd largest importer of Belgian products in 2010 (after USA). The major items of Indian exports to Belgium are - Precious stones; Textiles and garments; Iron and steel; Chemical products; Mineral products; Organic chemicals; Machinery and Electrical Equipments etc. The major items of Indian imports from Belgium are- Precious stones; Iron and steel; Machinery and mechanical appliances; Chemical products; boilers, machinery and mechanical appliances & parts thereof: Organic chemicals; Plastic and rubber; Plastics and articles thereof; Pharmaceutical products etc. The Indo-Belgian bilateral trade between 2004 and 2010 has increased by 62.5% growing from 6.4 billion euro in 2004 to 10.4 billion euro in 2010. Indian exports to Belgium increased by 63.6%, from 2.2 billion Euro in 2004 to 3.6 billion Euro in 2010. Indian imports from Belgium on the other hand have increased by 61.9% during the same period, growing from 4.2 billion Euro in 2004 to 6.8 billion Euro in 2010. After registering a decline in 2009, bilateral trade has witnessed a significant rebound in 2010, as reflected in the data available for the year 2010. It has increased to 10.4 billion in 2010 from 7.1 billion during 2009, an increase of 46.5%. Indian exports to Belgium during 2010 increased to 3.6 billion from 2.6 during 2009, an increase of 38.5%. The recovery in Belgian exports has also been impressive, increasing by 51% to 6.8 billion in 2010 from 4.5 billion during 2009.

Bilateral Investment- Belgium has emerged as the 23rd largest investor in India worldwide and the 9th largest within the EU but the total FDI in India from Belgium is still relatively small, less than 0.5% of the total. A cumulative figure of FDI inflows from Belgium into India amounts to US $ 327.84 million from April 2000 to April 2010, almost half of which had come from April 2008 to March 2010- (up to March 2008 it was US Dollars 180 million.) In the recent past, Indian investment in Belgium has exceeded investment by Belgian firms in India mainly through several take-overs of Belgian firms by Indian companies. Several Indian companies particularly in the IT and software sector have established base in Belgium to cater to Belgian as well as the European market. Cultural Cooperation- India has a Cultural Agreement with Belgium. Cultural exchange and cooperation takes place on a regular basis between the two countries. Belgium has not forgotten the sacrifices made by thousands of Indian soldiers in Flanders during World War I. To commemorate their memory, an Indian Memorial Pillar was installed along side the Menin Gate in Ieper. A larger and more befitting memorial pillar was re-built and reinstalled at the same site in 2010. The local authorities organize ceremonies at this pillar along side the main Armistice Day celebrations on November 10/11 every year. The Indian Council for Cultural Relations (ICCR) in association with the Centre for Fine Arts (BOZAR) organized an India Festival from October 2006- January 2007. The festival included, inter alia, art, theatre, musical and dance performances, fashion shows and a food festival. Indian Community in Belgium- According to the information received from the local Government the total number of Indians upto 2006 were around 16,132 out of which 10,000 Indian nationals have obtained Belgian citizenship and remaining 6000 are involved in various economic activities. Around 2,500 Indian NRIs/PIOs, based in Antwerp mainly from Gujarat are involved in diamond trade. Their contribution to the trade and commerce of Belgium is widely acknowledged by the Belgian leadership. The proposal for dual nationality for Belgian PIOs/NRIs has been agreed to by GOI. There are around 5001000 Indian students pursuing studies in educational institutions of Belgium.

(CIA, 2003: http://www.cia.gov/cia/publications/factbook/geos/be.html#Intro) (INVEST IN BELGIUM, 2003: http://investinbelgium.fgov.be/trade2.htm) (EUROPA, 2002: http://europa.eu.int/scadplus/leg/en/ lvb / r 11000.htm) (CIA, 2003: http://www.cia.gov/cia/ publications/factbook/geos/be.html #Econ) (CIA, 2003: http://www.cia.gov/cia/publications/factbook/ geos/be.html #Intro)