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The liberalisation process started by the Indian Government in the early nineties is structurally changing the economy and greatly increasing its current and potential growth, heralding a bright and promising future. India offers a wealth of business and investment opportunities that Spanish enterprises wish now to develop.
Spain is one of the world’s leading economies in terms of Foreign Direct Investment (FDI), both received in Spain, as well as Spanish investment abroad. In 2004, gross FDI received in Spain reached Euro 17.8 billion, while gross Spanish FDI invested abroad was Euro 46.7 billion. Due to the remarkable behaviour of the Spanish economy during the last years, Spain has become the 8th country in OECD (Organisation for Economic Co-operation and Development) and one of the leading countries worldwide. However, none of this would have been possible without the important investments made by Spanish companies in order to guarantee their competitiveness, to reach the quality and technological standards required by the EU, to develop international relationships and to participate in international projects, opening up new opportunities.
Though there is a vast opportunity present in either country for a profitable business relationship, and the Indo-Spanish trade has increased more than 30% this year, the knowledge between both countries is still low. There is a lack of awareness in India about the technological expertise and capabilities of this country compared to other European countries such as the Netherlands, Germany or the United Kingdom.
Investment by Spain in India is only a meagre 0.25% of its total investments abroad, especially in sectors such as automotion, energy, electrical materials consultancy and engineering or consumer goods. And the investment of India in Spain is practically non-existent.
In order to change this trend and stimulate Indo-Spanish business, the Spanish government is encouraging the mutual knowledge between Indian and Spanish companies. This awareness raising exercise is undertaken especially for value added sectors such as energy, machinery, transport, manufacturing processes, biotechnology, water treatment, ICT and electronics.
Regarding electronics and ICT sector, there are good cooperation experiences that are increasing the investment and joint projects. In fact, ITSMA (Interactive Technology Software and Media Association based in Bangalore) and GAIA, the Electronics and ICT Association of the Basque Country (an important industrial region located in the North of Spain), have been leading in the past years different initiatives; among them: the organisation of the Indo-European ITC SME Forum, the creation of a Multimedia Accelerator Centre in India, the support to the first Spanish software company that has located its offices in Bangalore, which works in direct cooperation with Indian software companies to develop products oriented to the sheet metal industry, the support to Indian ICT SMEs to enter the European Union, to obtain financial assistance for their R&D efforts, to get the European Seal of Excellence based on the European Management Quality model, etc. At the moment, both entities are organising the SPORTIS Conference (Bangalore, June 2006), the purpose of which is the creation of synergies and a network between the Indian and Spanish ICT sector to develop value-added products/services that respond to the demand and opportunities in the sports field.
Spain is considering India as one of their main objectives in the mid-term. For, India’s population is over 1,000 million and its average economic growth (6%) will place it as the 3rd world economy by 2050. The Spanish Government will spend Euro 20.7 million through 2007 on fostering Spain-India bilateral trade.
Recently GAIA created a Confederation of Electronics and ICT Association (CONETIC) representing 14 regions of Spain, with 1700 company members (aprox. 90% SMEs).
The Spanish electronics and ICT sector exports in 2004 were Euro 1059 million. The companies are very well positioned in areas such as high voltage measurement transformers, CAD/CAM software, regulation and control systems for machine tools (oxygen cutting, plasma, laser, water jet and die casting machines …), the supply of electric and electronic control and engineering equipment for the wing power market, etc.
Spain seeks to invest in India since it is extremely well positioned in software and ICT services and the added advantage of providing English speaking personnel. Therefore, combined with Spain’s strength in the electronics sector, cooperation is possible in a wide range of projects, fuelled with adequate awareness of each other.
It is also time for India to venture into unexplored territory, belonging to EU, which will permit India to access certain funds (wherever eligible) given by the EU for projects abroad.
This is therefore the right time for India and Spain to enter into symbiotic trade relations to herald the New Year.
It is rather heartening to note the other aspects of the Spanish business community. As part of their CSR activities, they have executed various projects here in India. They have funded and assisted extensively in setting up a telecentre in Bidadi, Bangalore rural, called TelNek. TelNek is now a fully operational telecentre.
They have also been partners in project Asia Qual. Asia Qual set up a net of IT centres in Asia and Europe to support the implementation in SMEs of a TQM (Total Quality Management) approach following the European Foundation for Quality Management Model (EFQM Model) of Business Excellence or its national variations. It adopted a very interesting methodology for dissemination of the project. Comics were brought out to make the learning experience an enjoyable one.
Besides, these projects were executed back in the year 2000-2002 and 2002-2005 respectively.
Even before they began business with India, India became a direct benefactor of their goodwill and their CSR policies. It is but inevitable that we should give a warm reception to the Spanish business community that wishes to forge strong business relationships with India.
The author is Secretary General of the Interactive Technology, Software and Media Association
(ITSMA).
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