Acknowledged to be a reliable economic and political partner at European and international levels, Luxembourg forms an integral part of one of the largest economic and monetary areas in the world. With an objective to create a mutual partnership between the small but strong European nation and India in the near future, Federation of Indian Chambers of Commerce and Industries (FICCI) organised a seminar on India-Luxembourg cooperation on 23 April 2007 in New Delhi. Luxembourg’s Minister of Economy and Foreign Trade Mr Jeannot Krecke was the keynote speaker amongst the distinguished members of the Luxembourg delegation at the conference.

In a welcoming address at the onset of the seminar, Mr Vikram Kapur, Senior Executive Committee, FICCI, and President, Atlas Cycles Ltd, mentioned that the event is the result of a growing synergy to the rapidly growing economies of the two countries. With the country’s political and social stability, skilled and multilingual workforce, state-of-the-art infrastructures, excellent connectivity to markets, favourable legal environment and attractive tax climate, Luxembourg offers an exceptional range of assets and opportunities for doing business in Europe and other parts of the world. Over the last twenty-five years Luxembourg’s GDP has grown by an average of approximately five percent in volume.

As it was his third visit to India in the last two years, Mr Krecke defined the conference as a rendezvous full of fascinating and inspiring ideas of India’s trade and economy. On his second visit in March 2006, Mr. Krecke had a fruitful business meeting with Indian Finance Minister Mr P Chidambaram and Commerce and Industry Minister Mr Kamal Nath. “One thing is for sure: India is still as fascinating, inspiring but also, in some aspects, as mystifying to me as it was on the first time that I set foot on Mother India’s soil”, Mr Krecke asserted. Luxembourg has always pursued a pro-active economic development policy, making it possible for the country to become an international financial centre and establishing itself as a prime business location. Recently the Government of Luxembourg has put emphasis on emerging and innovative technology-based activities, as the country is now home to some of the most successful global companies. Working within the framework of the Luxembourg Board of Economic Development, the country’s trade and investment offices around the world have the mission to strengthen global ties. Highlighting the country as a prime location for companies that have successfully expanded its wings in Europe, Mr Krecke stated “Lakshmi Mittal’s only connection with India is that he was born in this great nation, his bold venture brought into light, or maybe even encouraged, a new phenomenon: Indian business going global.”

In fact, Luxembourg’s wealth originated with the discovery of iron ore in the south of the country and resulted in a swift development of powerful steel and iron industries at the global level. Industrial businesses of all sizes in diverse sectors, using modern technologies, joined the traditional heavy industries, mainly as a result of the influx of foreign capital. Diversification of the country’s economy is illustrated by the presence of a wide range of business sectors particularly in the areas of chemical, plastic and synthetic materials, mechanical construction and industrial machinery, processing of ferrous and non-ferrous metals, car industry, precision instruments, electronic supplies, glass industry, and wood processing. Starting in the mid-1970s, Luxembourg’s economy moved from an industrial economy largely dominated by the iron and steel industry to a service economy dominated by financial services. “Luxembourg is a prosperous market of the world,” Mr Krecke stated during his speech at the conference.

With no doubt, the vitality of the Luxembourg market is due to the competences and hardworking mentality of its people. Cross-border thinking, mobility, and cosmopolitan nature of its workforce, of whom one third of it commutes each day from the three neighbouring countries—France, Belgium, and Germany—contribute to the high productivity of the country. Language skills of workforce enable the Luxembourg companies to proudly claim: “We speak the language of our customers”. Concerning the emerging young and hardworking population of India, Mr Krecke said, “A whole sector of the Indian economy made its fortune on generating services for Western users at lower cost and by highly qualified people. India’s high quality educational system, bringing tens of thousands of young graduates and postgraduates to the labour market every year is a precious asset.”

With approximately 150 highly experienced and skilled banking institutions, a successful investment fund industry, and a dynamic insurance sector, Luxembourg has a full range of diversified and innovative financial services. The country’s aim of further diversifying market services has led to the creation and development of businesses in the fields of insurance, transport, commerce, tourism, telecommunications, e-commerce, audiovisual, and company services. These key sectors have grown dynamically in Luxembourg and have also contributed in expanding international trading relations. “India is a traditional destination of our trade mission. India-Luxembourg commercial relation of 1999 was a very fruitful cooperation,” Mr Pierre Gramegna, President of the Luxembourg Chamber of Commerce asserted during his address at the seminar.

As foreign trade is the key accelerator of economic growth in Luxembourg, more than eighty-five percent of the goods and services produced in the country are exported, almost entirely to European markets and other destination like India. “We export to twenty-seven countries all over the world; India is an important part of our export strategy and the export figure doubled last year,” Mr Gramegna said. Referring the role of the Chamber of Commerce of Luxembourg in the international trade and business promotions, Mr Gramegna expressed that chambers of commerce have different functionaries in different countries. “In Luxembourg, membership of the chamber of commerce is obligatory for all self-employed individuals, commercial companies, and branches of foreign companies established in the country and undertaking a commercial, financial or industrial activity”, He pointed out.

Luxembourg’s privileged location in Europe, halfway between London and Paris and halfway between Paris and Frankfurt, has allowed it to access larger economic market relatively developing and expanding foreign relations by having a high-quality logistics centre and by attracting numerous investors wishing to sell their goods and products in the European markets. Cargolux – a leading freight carrier in Europe – has its home base in Luxembourg airport. Cartgolux operates a dense network of regular and direct flights to all continents. With its modern cargo centre, speedy ground handling and excellent air/road/rail/water connections to markets, Luxembourg is a logistical air flight hub par excellence. An important number of qualified handling agents, logistic technicians provide qualify service allowing ‘just-in-time’ access to all European countries. Kuhne & Nagel, Panalpina, and DHL, to name just a few, have chosen Luxembourg as an operating base. “Cargolux is already offering regular flights from Chennai to Luxembourg and will start operating from Delhi this summer. It makes Luxembourg your gateway to the European single market,” Mr Krecke said.

Luxembourg has successfully embraced the IT revolution while strengthening its position in the international arena of the media sector. With its first-class infrastructure and telecommunication network, as well as culture of trust security reflected by an appropriate legal framework, Luxembourg is an ideal place to serve as a global hub for the distribution of digital audiovisual contents. Consequently Luxembourg has become home to the galaxy of the IT sector where Skype, AOL, Amazon, iTunes, Millicom/Tele2, etc. are household names who elected the country as a launch pad for the global market. “The reason why our company set up in Luxembourg is its wonderful internal environment as well as the highest GDP per capita with living standard of the country,” stated Ms Hedda Pahlson-Moller, Managing Director, Evalueserve – a provider of high-quality knowledge services in investment and business research, intellectual property, and market research. According to a recent study conducted by The Economist, Luxembourg enjoys one of the highest standards of living not only in Europe but also among all developed countries in the world. Trade and economic partnership between India and Luxembourg would stimulate a new beginning for both countries in the realm of the world economy.