India Scales Swiss Alps Successfully

Spotlight By Professor V. Shivkumar & Dr. Kamal Shivkumar

“India has set a target of 175GW of renewable energy by 2022 out of which 100 GW will be composed of solar energy. Switzerland has a host of advanced renewable energy technologies including hydro-power and battery storage, which can be a game-changer in the development of Smart Villages and Smart Cities in India. The Swiss Vocational Education and Training System is one of the best in the world with even America seeking Swiss know-how in this area.”

India and Switzerland have had cordial and friendly relations since India’s independence. The relationship is based on shared values of democracy, multiculturalism and the rule of law. Independent India’s policy of non-alignment and Switzerland’s traditional policy of neutrality helped to develop a close understanding between the two countries. The Treaty of Friendship between India and Switzerland was forged at New Delhi on August 14, 1948, was ‘one of the first such treaties to be signed by the independent India’. The Treaty provided for the establishment of diplomatic relations between the two countries. In 2008, India and Switzerland celebrated the 60th anniversary of the signing of the Friendship Treaty, ‘an important milestone in the annals of Indo-Swiss bilateral relations’’. In recognition of the growth of multi-faceted bilateral relationship over six decades and to outline the future areas of mutual interest and cooperation, India and Switzerland have become privileged partners.

Indo-Swiss Relations: An Overview

High-level delegations from both countries have paid frequent visits to strengthen bilateral cooperation. The visit of the then-Swiss President, Mr. Flavio Cotti in 1998 was the first ever visit of a Swiss President to India. Later, President of the Swiss Confederation, Mr. Pascal Couchepin, paid a state visit to India in November, 2003. The last high-level visit to India has been that of the Swiss President, Mrs. Micheline Calmy-Rey in November 2007. Moreover, the state visit of the successive Indian presidents to Switzerland such as Dr. A.P.J. Abdul Kalam in May 2005 and Smt. Pratibha Devisingh Patil in October, 2011 also became a highlight in Indo-Swiss relations.

Among the official visits, Dr. S Jaishankar, Foreign Secretary, visited Switzerland in September 2015 and held discussions with Swiss State Secretary for Foreign Affairs, Yves Rosier, on various issues related to bilateral cooperation including the issue of ‘black money’’. Ajit Mohan Sharan, Secretary, Ministry of Sports visited Head Quarters of IOC in Lausanne (Switzerland) in March 2015 for working out the modalities for the proposed meeting of the delegation led by Thomas Bach, President, International Olympic Committee (IOC) with the Hon’ble PM of India on 27 April, 2015 to discuss PM’s vision on developing sports in India. My good old friend, Shri Shaktikanta Das, Revenue Secretary GOI, led an Indian delegation to Switzerland for talks on issues of double taxation and related matters with the Swiss State Secretary for Finance, Jacques de Waterville in 2014 and the dialogue continues between the two government till date (Embassy of India, Bern).

High-level Indian delegations have always participated in the World Economic Forum (WEF) held in Cologny, Geneva since the 1990s. India had the presence of over 100 business and government leaders, led by Finance Minister Arun Jaitley, at the World Economic Forum (WEF) Annual Meeting in Davos and was attended by more than 2,500 participants from across the world, including 40 heads of state.

Besides Jaitley, the Indian delegation also included RBI Governor Raghuram Rajan, Minister of Power Piyush Goyal, Trade and Commerce Minister Nirmala Sitharaman, Minister of State for Finance Jayant Sinha and Andhra Pradesh Chief Minister N Chandrababu Naidu. The purpose of this year meeting was to look into the changing contours of world economy and ‘to build a shared understanding of this change, which is essential if we are to shape our collective future in a way that reflects ultimately that the human being should be at the Centre’ (NDTV Davos report).

The Swiss-India Chamber of Commerce, which was set up in 1985 in Zurich, holds regularly seminars, symposia and meetings to promote investments, trade and business in the respective Countries.

An MoU establishing the ‘Rabindranath Tagore Chair’ on Indian Studies was signed on October 4, 2011. Following the MOU, ICCR has been deputing a Hindi Professor for the Chair. The 4th session of the Chair for semester Jan-June was completed in 2015.

Besides the above, India and Switzerland have signed agreements on Promotion and Protection of Investments, Air Services and Collaboration in Biotechnology, and Cooperation in Disaster Management. Another MoU was signed in February 2012 between the Indian Council of Social Science Research and the University of Lausanne, for institutional cooperation.

Indian Ambassador to Switzerland Ms. Purushothman summed it up nicely. She said: “Switzerland is celebrating 2015-16 as the year of Swiss Innovation in India which opens up fresh opportunities for partnerships in cutting-edge areas. Switzerland ranked No. 1 in the Global Innovation Index for the fourth year in a row and was also ranked as the world’s most competitive economy by the World Economic Forum. India has set a target of 175GW of renewable energy by 2022 out of which 100 GW will be composed of solar energy. Switzerland has a host of advanced renewable energy technologies including in hydro-power and battery storage, which can be a game-changer in the development of Smart Villages and Smart Cities in India. The Swiss Vocational Education and Training system is one of the best in the world with even America seeking Swiss know-how in this area. It is the key to the low unemployment rate in Switzerland as well as its advanced manufacturing capabilities. This is an area where there is enormous possibility for transfer of the know-how and the vocational education ecosystem to India. Further, Switzerland enjoys the second-highest per capita consumption of railway travel in the world and a strong partnership between the countries in the upgradation and development of Indian Railways is another area of existing and potential cooperation. Switzerland has some of the world’s best R&D institutes and technology universities, which can partner with India’s IITs and engineering institutes for mutual benefit.  Indian IT software companies are actively contributing to the next technological frontier through the ‘Internet of Things’. Finally, there is enormous potential for cooperation between the two countries in the tourism sphere such as adoption of a hill state by Switzerland, which we intend to explore in the coming months and years.”

“Swiss capabilities, thus, form a perfect complement to India’s plans to further stimulate and upgrade economic and technological growth through the Make in India, Skill India, Digital India, Smart Cities & Smart Villages, Clean India and Renewable Energy programmes. Enormous opportunities are opening up in India, which is today one of the fastest-growing large economies in the world. India has begun to attract massive FDI inflows following the proactive measures taken to facilitate doing business in India. There are new possibilities for expanding and diversifying cooperation…” she added.

Commercial contacts between India and Switzerland date back to the mid-19th century, when in 1851 the Volkart Trading Co. established its offices in Basel and Mumbai. It expanded its network, diversifying its activities in India, soon becoming the backbone of Switzerland’s economic presence in India. The Indo-Swiss Treaty of Friendship laid the foundation for a strong economic content to the bilateral relationship. Article 3 to 6 of this Treaty secured the ‘most-favoured foreign nation treatment’ to Switzerland. As provided by the treaty itself, it has set the pace for further treaties such as Double Taxation Treaty in November, 1994, followed by Amendment to protocol in 2010, Promotion and Protection of Investment Treaty in July 1997. The first major investment by Swiss companies in India came in the mid-50s. Switzerland is an important trading partner for India outside the EU.

The Swiss-India bilateral trade nearly tripled from $1.6 billion in 2004 to $4.5 billion in 2011. Swiss exports to India have declined in recent years, due to adverse currency rate movements and slowdown in the Indian economy. India’s merchandise exports more than doubled from 2009 to 2014. India exported goods worth CHF 800.1 million in 2009, which grew to CHF 1615.4 in 2014. According to details by the Swiss Customs, bilateral trade was at CHF 3357.4 million in 2014 (calendar year – January to December) showing a decline by 5 percent over 2013, with Swiss exports to India showing a decline by 13.3 percent to a total of CHF 1742 million in 2014 as against CHF 2010 million in 2014.

The major items of Indian exports to Switzerland include textiles and garments, organic chemicals, precious stones and jewellery, dye stuffs, machinery and parts, leather products, shoes and shoe uppers, cotton, plastics, coffee, tea and hand-knotted carpets. Besides bullion, Swiss exports to India consist of pharmaceuticals, machinery, transport equipment, chemical products and watches.

From April 2000 to Sept. 2015, Switzerland FDI into India amounted to approximately $3.18 billion, thus becoming the 10th largest investor and accounting for about 1.2 percent of total FDI in India during this period. As a large part of FDI in India, is routed through other countries, actual Swiss FDI in India is much higher, with overall Swiss investment inflows into India pegged at above $6.8 billion to 2013. More than 220 Swiss companies have a presence in India through their own subsidiaries and joint ventures. Most Swiss multinational companies such as Nestle, ABB, Novartis, Roche UBS and Credit Suisse etc. have their operations in India. As per Swiss government data, Swiss enterprises have created over 1,00,000 jobs in India. On the other hand, about 100 Indian companies invested $1.2 billion in Switzerland between 2012 and 2014, placing it among the top-five European investment destinations and top-ten places globally for Indian investors. Major Indian IT companies including TCS, Infosys, Tech Mahindra, etc. have their offices in Switzerland and provide services to major pharma companies, banks and insurance firms. Recently, Swiss luxury goods firm Lux was taken over by Eureka Forbes and earlier in 2010 M/s. Steiner, a construction company was taken over HCC Ltd. Indian companies in pharma and life science sector are also present. (Embassy of India, Bern)

Indian Diaspora

The International Day of Yoga (IDY) was celebrated on 21 June, 2015 at Waisenhausplatz in the City Centre of Berne and in Culture Centre, Gasometer, Liechtenstein with participation of about 100 and 30 participants respectively. In other Swiss cities such as Zurich, Berne and Baden, mass yoga practices were also held under the aegis of different Yoga school. Apart from many Sri Lankan refugees, who have become part of Switzerland, Indian community also contributes to art, culture, music and dance.

The Indian community in Switzerland comprises approximately 18,000 Indians, including over 6300 persons of Indian origin (Swiss passport holders). Most are professionals in engineering, IT, pharmaceuticals and paramedical fields. Some are deployed in the international organisations. All these people are contributing to the Swiss society, feeling more at home.

Prime Minister’s visit to Switzerland 2016

Prime Minister Modi’s visit to this beautiful land-locked country was long awaited. Narendra Modi landed on the night of 5th June and his tight schedule began from the early hours of the following day that included a meeting with President of Swiss Federation and their delegations, diplomats, the business community, students and the Indian scientists. Though Bern is the capital city of Switzerland, where many Indians and Sri Lankan Tamils live, Geneva is an international hub well-connected for travel. PM Modi after holding extensive discussions with the President of Swiss Federation said: “India and Switzerland also share a commitment to reform international institutions in line with current global realities. We have both agreed to support each other for our respective bids for the non-permanent membership of the UN Security Council. I am also thankful to the President for Switzerland's understanding and support for India's membership of the Nuclear Suppliers Group. Combating the menace of ‘black money’ and tax evasion is also our shared priority. We discussed the need for an early and expeditious exchange of information to bring to justice the tax offenders. An early start to negotiations on the Agreement on Automatic Exchange of Information would be important in this respect.”

He further said: “Strong ties between the people of our two countries are an important base and benchmark of our linkages. Thanks to the Indian film industry, we are very familiar with the enchanting beauty of the Swiss landscapes. But, we are also keen to welcome larger number[s] of Swiss visitors to India. For this, we have opened the facility of e-Tourist Visa for Swiss nationals earlier this year” He assured.

Foreign Secretary Dr. Jaishanker, while briefing the press on the eve of five nations tour of the Prime Minister, clearly outlined the objectives of the PM’s visit to Switzerland. He said among other things: “Switzerland interestingly is our fifth-largest trade partner globally. It is also the 11th largest investor in India. So, if you look at the economic importance of Switzerland, it is not a visit to be underrated. Apart from the direct trade and investment relationships, it is a country with some very significant strengths, particularly in the renewable energy side, [and] in the vocational education side. And we do believe that Prime Minister’s interaction with business leaders, which will take place after his meeting with the President, would encourage Swiss industry to invest more vigorously in India” while answering questions posed by a correspondent citing the Mexican Ambassador to India and his views on NPT, the foreign secretary showed the glittering side of his academic bearing.

While explaining as if to a student in a classroom, the subtle difference between NSG and NPT, he said: “… first of all I think we need to understand some important differences. The NSG is a regime. It is a sort of a flexible arrangement amongst States which is quite different from the NPT, which is a treaty. If you look at the central word in that acronym NSG, it is ‘supplier’. If you look there, it is proliferation. So, I think the objectives are different and I would not really confuse apples for oranges. You asked, do we see problems, or how do we make a case, or what is the expectation, or the reactions. I would put it this way that for the last more than a decade we have been telling the world that a country like India and an economy like India, which is growing will require more energy and we expect for reasons of greenness, cleanness technology that the nuclear component of our energy mix would grow”. Many journalists in Indian are not clear about why Latin American opposes nuclear proliferation; there is a history behind it which one should know!

Earlier the Swiss President Johann Schneider-Amann welcoming the PM summed up the road map of the ongoing relationship between the two countries.

President Schneider-Ammann reiterated Switzerland’s wish to intensify efforts towards a free trade agreement between the EFTA states and India. State Secretary Marie-Gabrielle Ineichen-Fleisch, Director of the State Secretariat for Economic Affairs (SECO) is expected to travel to India soon in this connection. “It is hoped that this will mark a further step towards resuming negotiations, President Schneider-Ammann” explained.

“In addition to economic exchanges, progress has also been made in the education, research and innovation sectors in recent years, as was stressed during the talks. The two countries share a strong interest in vocational education and training’’, he affirmed.

Furthermore, Swiss and Indian institutions are working together on joint research programmes. There is great potential in climate research, clean technology, air pollution control, sustainable urban development and renewable energies. The delegations also discussed financial policy matters. Switzerland and India stressed their shared resolve to take action against tax fraud and tax avoidance and underlined the high quality of their cooperation in this area.

On the whole though, PM Narendra Modi spent less than a day in Geneva but took lots of goodies back home to promote Indo-Swiss relations. It is now left to the officials of the two countries to honestly work towards the progress.

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.