Kalam visit cements Swiss-Indian relations

Thirty per cent of Indians live on one dollar a day

Indian President APJ Abdul Kalam's visit to Switzerland is being billed as an attempt to boost economic and scientific ties between Bern and New Delhi.

This content was published on May 26, 2005 - 09:40

The Swiss have traditionally benefited most from commercial ties between the two countries, but India is catching up in sectors such as information technology and pharmaceuticals.

In 2004 Swiss exports to India rose by more than 37 per cent to reach SFr1.02 billion ($0.83 billion), while imports rose by just under ten per cent to SFr548 million.

"This pattern of growth is set to continue throughout 2005," said Jacques Derron, economics attaché at the Swiss embassy in the Indian capital.

India, currently Switzerland’s eighth largest trade partner in Asia, is projected to become the world’s fourth-largest economy by 2020.

Investors express confidence that India will continue to offer opportunities to Swiss and other international companies seeking long-term contracts in the country.

Pierre Page, the director of Swiss IT company Teknosoft, is no stranger to the Indian market.

His company has been working in partnership with Indian computing firm Tata Consultancy Services since the beginning of the 1980s.

Page told swissinfo that Switzerland had kept the upper hand in terms of bilateral trade ties for at least two decades. But he believes both countries are now benefiting equally.

"Indian economists are estimating annual growth of eight per cent for the rest of this decade," he said.

"The subcontinent has huge infrastructure needs, so the opportunities for Swiss industrial firms and investors are huge."

Mixed picture

Analysts point out, however, that the benefits of economic growth are a long way from being felt across India.

More than 30 per cent of Indians live on less than one dollar a day, and Switzerland continues to invest more than SFr30 million each year in development-aid projects in the country.

India has been a priority nation for the Swiss Agency for Development and Cooperation since 1961.

But the country’s largest towns and cities – including Delhi, Mumbai and Bangalore – have become important global players in the IT and biotech sectors.

Many of Switzerland’s biggest firms have seen the benefit of outsourcing work in these and other areas to Indian companies.

A survey last year by Swiss television’s consumer-affairs programme Kassensturz found that such household names as Novartis, Swisscom, Swiss Federal Railways and the Swiss Post Office had all outsourced some of their IT activities to India.

And the lure of a country which boasts a population of more than one billion is likely to increase over the next decade.

According to French newspaper Le Monde, every year more than 500,000 newly qualified engineers and 250,000 doctors graduate from Indian universities and schools of higher education.

Science and tourism

But Swiss ties with India are not exclusively business-related. Less than two years ago Switzerland and India signed a bilateral agreement on scientific cooperation.

Kalam’s visit this week to Switzerland’s two Federal Institutes of Technology in Lausanne and Zurich are proof of the importance both countries place on developing scientific-exchange programmes.

Switzerland is also a popular choice for Indian holidaymakers – around 80,000 of them chose to visit the alpine nation in 2004, four times the number of Swiss who made it to India.

Swiss tourist officials recognise that things can only get better: a recent survey found that a majority of Indians think of Switzerland as their ideal destination.

It is estimated that up to 20 per cent of the Indian population can afford to travel abroad.

While many Indians dream of seeing the alpine peaks which form the backdrop of many Bollywood films, Swiss investors are setting their sights on establishing a presence for themselves in the more down-to-earth world of business and commerce.

Derron believes India is becoming more attractive to investors who have previously shied away from attempting to enter the market.

"I have noticed that an increasing number of investors are looking towards India," he said, citing a new Indian intellectual-property law as one example of how the authorities are seeking to make investment conditions as palatable as possible.

"This law... offers much more security to companies looking to penetrate the Indian market and undertake research activities."

Chinese rival

Derron admits that China is also an attractive market for foreign investors, but he believes India has the edge over its Asian rival.

"What we are likely to see is the balance shifting in favour of India."

He points to the high level of written and spoken English as one example of the advantage India enjoys over China.

But Derron admits that business executives also have to be prepared to deal with the often slow pace of Indian bureaucracy.

"If you choose to invest in India," he concludes, "you have to be prepared to do it for the long-term rewards."


Key facts

More than one billion people live in India and about half of the country’s population is younger than 25.
The Indian economy has posted an average growth rate of 6% since 1990.
India is a major exporter of software services and software workers.
Switzerland’s main exports to India are machines and electrical goods.

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