A giant that continues to give the spurt. Seventh largest country in the world by extension and sixth global economy, with annual GDP growth around 7%, the commercial and investment attractiveness of India is undeniable. A market of 1,400 million inhabitants in which, among its visible inequalities, a strong middle class consolidates and in which almost everything is to be done, especially in the field of infrastructures.
The Minister of Foreign Affairs, Josep Borrel, was moving this week in official trip to Nueva Dehli to "strengthen relations and facilitate bilateral exchanges" with a country that, in its own words, supposes "a huge opportunity". The importance of "strengthening our ties" with which undoubtedly will be one of the essential actors in the global geoeconomic map in the coming decades accounts for the large institutional delegation that accompanied the minister, and that included the general director of Trade and Inversiones, María Paz Ramos; to the Foreign Affairs, Cristina Serrano; to the general director of CEOE International, Narciso Casado, and the general director of the Chamber of Commerce of Spain, Inmaculada Riera.
"The continuous development and increase of both the population and the industry and commerce of the country make India a commercial ally of maximum interest. Above all, because in recent years India has opened abroad and has strengthened its economic and commercial relations with other Asian giants. Remember that you have signed free trade agreements with South Korea and the Association of Southeast Asian Nations (ASEAN). In addition, it has agreements in force with important regional actors such as China, Japan or Singapore. So the presence in India is a great opportunity. Not only for itself, for what it represents its own market, but also for the option of accessing other Asian countries that are also very interesting for Spanish companies, "underlines Inmaculada Riera, general director of the Chamber of Commerce, on the strategic importance of the Indian market.
The occasions that the development of the new Asian power offers to the Spanish companies are varied. «One of the sectors that continues to offer greater opportunities it is the one of the infrastructures of transport, including roads, railroads, civil aviation, systems of management of the traffic, as well as naval sector, aerospace and of defense ", explains Riera. In fact, one of the objectives of Borrell's trip was to promote the sale of 56 military aircraft of medium transport C-295 of Airbus, whose first 16 units would be manufactured entirely in the multinational's plant in Seville.
The general director of the Chamber of Commerce emphasizes that "the possibilities for smart cities are also growing. The renewable energy sector is also very attractive and, increasingly, the water and environment sector, which are critical areas for the Indian Government and in those that are focusing important investment projects. The automotive industry continues to present a margin of growth and the food sector also offers opportunities for Spanish industry. " Riera also cites other future niches in which "Spanish companies have until now been less present", such as the services sector. Focuses on which to focus a still incipient investment (212 million of stock in 2016) and to equalize a clearly deficit trade balance for Spain: imports from the Asian country (3.880 million in 2017) triple our exports (1,274 million).
And it is that opening a business path in this vast extension of opportunities is not an easy task. Despite the steps for the elimination or reduction of current limitations on foreign investment in areas such as defense, real estate, banking, civil aviation, railway infrastructures and insurance, "There are restrictions on foreign investment in sectors of great importance such as banking and insurance, just to mention a few examples. Likewise, there are numerous non-tariff barriers in the agri-food sectors, as well as high tariffs, in comparison to ours, in the related sectors, for example, with automotive and agri-food. On the other hand, «Make In India», designed to boost industrialization in the country, should not be linked to the regulatory imposition of greater local content in the public procurement market, "explains Narciso Casado, CEOE CEOE International.
Bureaucracy and cultural differences are other difficulties characteristic of the Indian market and make it advisable to seek the support of a local partner. Married recalls that "in many cases thecurrent legislation it leaves no other option to the foreign company than to ally with an Indian company to establish itself in the country ", as, for example, in banking, insurance, generalist distribution …
Opportunity for SMEs
A complexity that hinders the access of SMEs, although Riera believes that they can "benefit from the presence and investment of large Spanish companies, the so-called tractor effect. As was revealed at the last meeting of the CEO'S Spain-India Forum, the commercial and investment relations between both countries suppose a total of 7,000 million dollars, which could pass to 50,000 million in 2022 if the full potential of the sectors was used. Projects of this magnitude can help boost the entry of Spanish SMEs in this market hand in hand with the large companies responsible for developing them, "defends the general director of the Chamber of Commerce.
Allnanar to the SMEs that paved road to the highway of Indian opportunity is precisely one of the objectives of that Forum of CEO'S, constituted in 2016 and integrated by business leaders of both countries. Initiatives that finally put the new global giant on the roadmap of the Spanish company.