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Intro
Welcome and thanks to the Swiss India Business Forum for invited me to address your guests on the occasion of the celebration of friendship between India and Switzerland. I am also delighted to be here for your General Assembly and wish you many more such successful activities.
It is indeed a very special year for India and Switzerland as 2008 commemorates the 60th anniversary of the Indo - Swiss treaty of Friendship and Establishment. This treaty was signed in 1948, as the Swiss Federal Council dispatched its special envoy, Mr Armin Daeniker, to New Delhi to meet with Jawaharlal Nehru. This event is all the more important that Switzerland was the first country to sign such a treaty with India. It is important to note that Switzerland was also one of the first countries to recognize Independent India a year before.
India & Switzerland
On the occasion of this anniversary a large amount of business, diplomatic and cultural events are being organized and held between both countries…To mention a few:
- Already last year the Media Nord-Sud Association led by my friend Jean-Philippe Rapp held an India Festival. He is now planning to organize a big event in India to celebrate this anniversary.
- On the Political and Business side : 2008 is seeing an official visit of the Federal Councilor, Ms Doris Leuthard, this month with a business delegation to discuss bilateral trade opportunities. And this just after the return of Councilor Calmy Ray from India. Both mentioned that Switzerland has identified India as a country of high priority in its long term strategy.
These events have much to celebrate and built on as cultural and business ties between these two democratic and pluralistic nations have grown deep and serve as example to other nations. Tiny Switzerland and large India have indeed a lot in common such as deep-rooted democratic systems, diverse cultures and languages, market driven economies and a service sector driving both economies.
On the commercial front, here again Swiss companies were pioneers. India and Switzerland in fact had a first commercial contact in 1851 when Salomon and Johann Volkart founded their company Volkart Brothers in Bombay and Winterthur which led to extensive trade exchanges between the two countries.
Today around 150 Swiss companies, through joint ventures and other forms of cooperation are present in India. Some started their activities before India's independence like ABB and many others for the last several decades like Sulzer, Sandoz and many others.
More recently the interest from the Indian side to invest in Switzerland is also rising. India's impressive growth story has increased Indian business presence to Switzerland. Over 25 Indian companies, including the new multinationals such as TATA, BIRLA, Wipro, Infosys and Dr Reddy's laboratories have already set up base in Switzerland. Many more, in fact over 60 companies, are looking to invest in Switzerland over the coming 4 years. The key reasons for their interest are the strategic location of Switzerland in the centre of Europe, long-term stability, legal security, dedicated professional labour force, liberal market conditions, reliable and highly developed financial centres.
On the trade and investment front, tiny Switzerland ranks 9th as largest FDI investor in India and this is growing fast as Swiss direct investment in India over the past 4 months has exceeded the total figure of the last two years. In terms of bilateral trade, the import/export figure reached more than 7 billion SWF in 2005-6. However, imports from India remain very low compared to exports to India (2005-imports at 475 millions whilst exports at over 6 billions).
From my own memories and experience, India's desire to play a larger political and business role globally took shape in the mid 80's. This coincided with late PM Rajiv Gandhi's visit to Geneva in 1984. At the time I was with the World Economic Forum and on the occasion of his visit we organized a business meeting. More than 60 executives came to meet him, among whom many Swiss companies and banks. This was the beginning of a long series of meetings with India in Geneva, but above all a yearly business summit in Delhi which it was very difficult to sell after the first emotional success due to the young and good looking Prime Minister Rajiv Gandhi.
There was little interest from most large business houses until 1992 when economic reforms really took off. Here again, Switzerland, through the World Economic Forum largely contributed to show a different image of India by receiving in Davos an increasing number of Indian entrepreneurs in Davos. They met their worldwide business peers and impressed them by their professionalism and dynamism. Today the WEF has well over 70 members from India.
Europe/Switzerland and India
I have left the World Economic Forum to devote all my time to a not-for-profit Euro-India Association, called the EuroIndia Centre.
On a wider picture Europe and India have a long road to go. Europe in general has ignored India or has not realized that the infamous "huge economic potential" of India will one day be finally realized. To try and improve this situation, Dr Manmohan Singh, together with late former PM of France, Raymond Barre, founded the EuroIndia Centre, of which I am now the Co-President with Mr Jamshyd Godrej. The objective was to recreate the long historical links between the two regions. We, at the Centre, are now mainly focusing on Indian cities which are exploding because of increased urban population, insufficient or outdated infrastructure, lack of planning etc.
The Indian government has launched the JNNURM (Jawaharlal Nehru National Urban Renewal Mission) and the Centre works closely with the Ministry of Urban Development to help the over 60 cities having applied for financial help from the Government of India, on the basis of clearly a defined programme of reforms and detailed project reports, to have the occasion to meet their European counterparts - cities - to exchange expertise and know how in the urban domain. There are enormous opportunities for Swiss companies to partner, particularly through PPP format, with the Indian State governments in sectors such as water and waste management, capacity building, urban transportation, planning, renovation of historical urban heritage etc. I am at your disposal to give you information on the Centre, a not-for-profit association.
Vision, partnerships, opportunities for parties
I would conclude by saying: As we all know, India today is posting highly attractive and merited growth rates. European and International businesses are seizing opportunities across a multi fold of sectors across India. With India's small and medium cap sector representing nearly 70% of India's growth story, SMEs in Europe, and particularly those from Switzerland would stand to benefit the most from doing business in India.
India's recent commitments to focus on its infrastructure shortfall presents infinite demand and opportunities for both public and private partnerships between India and Europe. India's infrastructure spending has been expanding rapidly to catch up and support India's economic growth rates of 9%. An impressive 500 billion USD of investments have been identified by India's government for infrastructure. This represents 40 billion USD a year and requires international investment and expertise.
Switzerland in particular - has an important role to play as a source of niche high technology applications which are always on high demand in emerging economies.
Finally a few notes of recipe for a Swiss (or any foreign) investor):
Key advantages in India: skilled manpower, overall English speaking population, competitive labour costs, availability of raw material, large domestic markets allowing economies of scale.
Important to note that the following are key:
- Early entry and ability to stay invested is crucial
- Have a strong understanding of Indian market
- Focus on quality (Indians only want the latest and the best)
- Build proximity to the customer
- Sometime a solution provider approach is needed (training, productivity improvement)
- Establish a friendly relationship with your Indian counterparts very quickly, as empathy is key to do business with India.
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Colette Mathur
Co-President
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