PU B LISHED SIncE 199 6 No. 270 /2018 :: www.polishmarket.com.pl
special edition
POLAND INDIA Partnership for Future
• BETTING ON COAL TECHNOLOGIES • INDIAN STUDENTS PICK POLISH UNIVERSITIES • POLISH COMPANIES THRIVE IN INDIA • INDIAN INVESTMENT IN POLAND PICKS UP
“With INDIA we should think big” Marek Magierowski, Undersecretary of state, Ministry of foreign affairs
godai.pl
POLISH
special edition
PUBLISHED SINCE 1996
MARKET
ECONOMIC MAGAZINE
PRESTIGE. QUALITY. PROMOTION.
P O L I S H M A R K E T. C O M . P L
June 2014 polish market
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CONTENTS
4. Adam Burakowski, Ambassador of Poland to India: GREAT BILATERAL RELATIONS
14. ECONOMIC RELATIONS BETWEEN POLAND
5. Marek Magierowski, Deputy Minister for Economic Diplomacy, America Policy and Asia Policy at the Ministry of Foreign Affairs: WITH INDIA WE SHOULD THINK BIG
16. SPOTLIGHT ON POLISH-INDIAN RELATIONS
6. Grzegorz Tobiszowski, Deputy Minister of Energy: SILESIA – WEST BENGAL PARTNERSHIP
18. LODZ SEZ: FORGING BUSINESS LINKS WITH
8. Marcin Ociepa, Deputy Minister for Enterprise
19. INDIA AND WEST POMERANIA – HAND IN
AND INDIA
17. PRESIDENT VISITS A PLANT OF ONE OF THE LARGEST POLISH INVESTORS TO INDIA
INDIA
and Technology: WHY SHOULD INDIAN STUDENTS PICK POLISH UNIVERSITIES?
HAND
20. Mariusz Łuszczewski, President of Western
9. EDUCATION: UNTAPPED BUSINESS OPPORTUNITIES FOR POLAND AND INDIA
Pomeranian-Indian Chamber of Commerce: GATEWAY TO EUROPEAN MARKETS
11. Tomasz Pisula, President of the Polish
22. Anna Kalata, Vice-President of Indo-Polish
12. J.J. Singh, President of Indo-Polish
24. Marcin Grzymiszewski, Vice President
Investment and Trade Agency: POLAND HAS TECHNOLOGICAL POTENTIAL
Chamber of Commerce: A WIDE ARRAY OF BUSINESS IDEAS
Chamber of Commerce: POLAND AND INDIA: OPPORTUNITIES GALORE
of MS Global: HELPING POLISH SMEs BUILD RELATIONSHIPS IN INDIA
Photos on issue: www.shutterstock.com
SPECIAL EDITION
Publisher: Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o. (RYNEK POLSKI Publishers Co. Ltd.) President: Krystyna Woźniak-Trzosek Vice - Presidents: Błażej Grabowski, Grażyna Jaskuła Address: ul. Elektoralna 13, 00-137 Warszawa, Poland Phone (+48 22) 620 31 42, 652 95 77 Fax (+48 22) 620 31 37 E-mail: info@polishmarket.com.pl Editor-in-Chief: Krystyna Woźniak-Trzosek Deputy Editor-in-Chief: Ewelina Janczylik-Foryś redakcja@polishmarket.com.pl Marcin Haber m.haber@polishmarket.com.pl
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Magazing Editor: Rafał Kiepuszewski Writers/Editors: Maciej Proliński, Jan Sosna, Janusz Korzeń, Jerzy Bojanowicz, Janusz Turakiewicz, Translation: Sylwia Wesołowska-Betkier, Rafał Kiepuszewski, Agit Contributors: Agnieszka Turakiewicz Graphic design: Godai Studio Agnieszka Andrzejczak, Joanna Wiktoria Grabowska Sales: Phone (+48 22) 620 38 34, 654 95 77 Marketing Manager: Magdalena Koprowicz m.koprowicz@polishmarket.com.pl
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Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o. Nr KRS 0000080385, Sąd Rejonowy dla m.st. Warszawy XII Wydział Gospodarczy Kapitał zakładowy 80.000,- zł. REGON 011915685, NIP 526-11-62-572 Published articles represent the authors’ personal views only. The Editor and Publisher disclaim any responsibility or liability for their contents. Unsolicited material will not be returned. The editors reserve the right to edit the material for length and content. The editors accept no responsibility whatsoever for the content of advertising material. Reproduction of any material from this magazine requires prior written permission from the Publisher.
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Building solid economic relations I
t is a safe bet that India’s economy will become the global hit of 2018. A foretaste of that was the tremendous interest in Indian Prime Minister Narendra Modi’s inaugural address at the Davos economic conference. Just one month later, the Global Business Summit in New Delhi, whose stars were Donald Trump Jr. and Steve Wozniak, was dubbed a new Davos. If you believe that hard facts matter the most in economic terms, India’s economy will not disappoint you in the slightest. Since Narendra Modi became Prime Minister, it has grown at a rate of over 7% per annum. What it means in practice is that next year its size will have grown by a third compared to 2014. In GDP terms, the US, China and Japan will continue to top the list, but Germany, at No. 4, will have India breathing down its neck. India itself is very optimistic. It wants to become the world’s third largest economy by 2025. According to economists, these goals are based on solid foundations. India’s best asset is the size and demographic makeup of its population: one in two of its 1.3 billion inhabitants are under 25. India also has the world’s single biggest group of English speakers. Two thirds of its work force may still be employed in agriculture, but migration to cities and the booming education system promise to be the chief long-term growth engines, as long as there is enough investment in new work places. Another factor that works in India’s favour is the opening up to the world of its huge manufacturing base and its consumer goods sector. The value of the Indian retail sector amounts to USD 750-800 billion. Not surprisingly, once India abandoned its former self-sufficiency model, its market has attracted a huge interest of world business. This open-door policy leaves plenty of room for more intensive contacts. In fact, there is a lot to build on. In the past, Poland made inroads into India, and the other way round, already beginning in the 1960s. The two countries forged close diplomatic relations and a lot of common ground for fruitful economic co-operation was found, which lasted until the late 1980s. Following a decline in the 1990s, for the past few years, renewed efforts have been made to develop the contacts once again. The “Make in India” programme launched by the Indian government prompted the Polish government to come up with its own GO INDIA initiative. India is one of Poland’s most important nonEuropean trade partners. It ranks fifth next to China, the US, Korea and Japan. Polish-Indian two-way trade and bilateral investment are picking up. Polish exports to India mostly include electrical engineering, chemical and metallurgical products, while imports from India are mainly textiles and accessories, followed by chemical and electrical engineering products. Direct capital investment on both sides looks very promising indeed. India is second only to Singapore in terms of Polish FDIs in Asia. The list of Indian investment projects in Poland keeps growing, and plenty of very realistic projects are in the pipeline. Polish plans include supplies and investments in the defence industry, coal mining, extraction of other fuels and minerals, exports of food and agricultural products and renewable energy. Offers of co-operation have been extended in the IT and ITC, biotechnology and medical sectors on top of existing contracts in these areas. So what are the chances for long-term success? The vast difference in potentials between Poland, a nation of 38 million people, and India, with its population of 1.3 billion, is definitely there. One way to bridge it would be to follow the lead of the Visegrad Group – Japan platform and the China – Central and Eastern Europe initiative. The fact that Polish and Indian economic diplomacy is intensifying, as evidenced in the growing number of senior-level bilateral visits, is definitely very encouraging. Krystyna Woźniak-Trzosek Editor-in-Chief President Rynek Polski Publishers Co. Ltd.
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GREAT BILATERAL
RELATIONS Adam Burakowski,
Ambassador of Poland to India
P
oland and India enjoy great bilateral relations with trade and investment being important pillars of our successful cooperation. 2017 brought a rise in mutual trade by approximately 16% reaching almost USD 3.2 billion. Polish exports to India in 2017 rose by approximately 10% year-on-year and imports by around 15% respectively. India has become the number one Asian market for Polish direct investments, while Poland is the main destination for Indian FDI in Central Europe. One can observe an ever rising mutual interest to tap opportunities in both countries. The Polish side recognizes the potential for manufacturing in India and has a wide array of technologies at its disposal. Indian counterparts are attracted to Poland by, inter alia, skilled work-force and geography – Poland’s location in the heart of Europe. Cooperation between both central and state governments aims to strengthen the potential of business cooperation by the creation of legal infrastructure as in the recent case where Polish phytosanitary certificates for apples, poultry and other products were recognized by the Government of India. Polish entrepreneurs are well aware of the high demand for innovative solutions in India, whatever the company’s area of activity. This has been the key to their growth and success. Their example, together with the ever improving conditions for doing business in India and the fast growth of its economy, would attract new investments from Poland, especially in the crucial sectors of food processing, water and wastewater management, renewables, modern urban transportation, clean coal technologies, services and many others. For the last 25 years in a row Poland has been able to sustain a positive GDP growth rate. Some of its positive economic indicators - GDP growth of 4.6% in 2017 as reported by Statistics Poland (GUS), inflation at approximately 2%, low unemployment rate, etc. - are a good reflection of the condition of the Polish economy, and create favourable conditions for investors and traders. During the last dozen years the average income in Poland has doubled. Interestingly, Poland is becoming a new important destination for Indians not only from a purely business perspective. 2016 saw
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the number of Indian students at Polish universities more than double in comparison to 2015, a trend that was, no doubt, replicated in 2017. Indian culture and cuisine also gain their ground. Our mutual endeavours receive a significant and valuable support from partners who promote and facilitate contacts between the business and other stakeholders engaged. •
INTERESTINGLY, POLAND IS BECOMING A NEW IMPORTANT DESTINATION FOR INDIANS NOT ONLY FROM A PURELY BUSINESS PERSPECTIVE. 2016 SAW THE NUMBER OF INDIAN STUDENTS AT POLISH UNIVERSITIES MORE THAN DOUBLE IN COMPARISON TO 2015, A TREND THAT WAS, NO DOUBT, REPLICATED IN 2017.
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WITH INDIA WE SHOULD THINK BIG
In the following message written for “Polish Market”, Marek Magierowski, Deputy Minister for Economic Diplomacy, America Policy and Asia Policy at the Ministry of Foreign Affairs, takes stock of Polish-Indian economic relations and looks forward to the future.
A
fter almost three decades since the fall of communism in Poland and nearly 15 years of our country’s membership in the EU we have reached a stage where expansion to relatively more distant (both literally and figuratively) markets as India seems indispensable for upholding the fast pace of our economic growth. Poland has always considered its relations with India as privileged ones and through the years we have developed strong political, economic and cultural links among the two countries. It is therefore more than obvious that a special panel discussions dedicated to India became an integral component of each edition of the European Economic Congress in Katowice, a leading annual economic venue in Central-East Europe. The growing interest in deepening our relations with India is reflected by more and more representatives of the Polish Government, regions and business sectors taking part in important venues and meetings there. This year I got impressed by the high level of discussion and the range of its international impact at the latest edition of the Bengal Global Business Summit in Kolkata. It is perhaps worth mentioning that our link with Bengal goes back to 1933 when Netaji Subhas Chandra Bose paid a visit to Poland and held important meetings at our Ministry of Foreign Affairs thus somehow initiating our cooperation long before India became independent. Strengthening our cooperation with West Bengal, as well as with other regional entities of India, becomes a more and more important feature of our bilateral economic relations with the country. Considering the size and scale of India’s federal states we find the regional dimension as an effective level for shaping a tailored and more target- focused economic cooperation. Products and services from Poland have been long present on the Indian market but only in limited and narrowly defined areas. In any case our traditional customers in India may have noticed to what extent the range of products and services we offer has changed in time -both in quality and variety. Capitalizing on our experience and expertise we would like to see Polish companies participating in important infrastructural projects like the transformation of the Indian mining industry, making it more efficient, safe and environmentally-friendly. Poland has a lot to offer not only in traditional sectors but also in advanced, innovative cutting-edge technological solutions. The Made in Poland products in such areas as IT, mining or high-quality consumer durables should perfectly match India’s needs. Poland – as India – is more and more focused on research and development of new technologies, seeing them as a paramount leverage to exponentially lift
the competitiveness and economic growth of the country. Why don’t we think about strengthening our cooperation in that field? We could start with projects aimed at exchanging good practices in developing start-up ecosystems. I firmly believe that there is enormous but still unrealized potential for cooperation between Poland and India, and our goal at the Ministry of Foreign Affairs is to facilitate Polish-Indian exchange with the aim of tapping it. The foremost obstacle that needs to be overcome should be strengthening the image of our country in India as an origin of many cutting-edge innovative solutions, as it will undoubtedly boost concrete cooperation between Polish and Indian companies. This is all of course much easier said than done. Without closing ranks between public administration and the private sector, and elaborating a comprehensive line of Polish products and services intended for India, comprising solutions to particular challenges India is facing, the chances of a considerable increase of our presence there are limited. It is often said that India is not a country but a continent which probably best reflects the complexity and potential gains both hindering and providing an incentive for everyone who sets off on the challenging journey to the Indian market. But the main point I would like to make here is the following: with India we should definitely think big because this country, with its enormous economic heft, growing political clout and rich tradition, deserves it. Why should we not explore ways in which our most innovative IT companies could contribute to India’s impressive programme of building a biometric database or new payment systems for non-banked individuals? Why could we not seek methods for our mining companies to help India tap its vast coal reserves by building what is called intelligent mines? Why should we not try to approach the Indian upper-middle class with our exquisite products ranging from furniture, exclusive beauty & cosmetics to luxurious yachts, so that they could enjoy the same quality for a lower price compared to many other Western European wares? What is certain is that we should not be afraid of setting ambitious goals and making them reality. Wishing you a fruitful discussion and lots of inspiring moments in Silesia, Marek Magierowski Deputy Minister for Economic Diplomacy, America Policy and Asia Policy polish market
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SILESIA –
WEST BENGAL PARTNERSHIP
Photo courtesy of the Ministry of Energy
An agreement with West Bengal which was signed at the Bengal Global Business congress in Kolkata in January opens up fresh avenues of economic and trade co-operation for Silesia, Deputy Minister of Energy Grzegorz Tobiszowski told the Polish News Agency.
A
letter of intent on co-operation between the province of Silesia and the Indian state of West Bengal was signed by Deputy Minister of Energy Grzegorz Tobiszowski and local officials during the Bengal Global Business Summit, which was held January 16-17. Speaking to the Polish News Agency Minister Tobiszowski said that the two regions have highly developed mechanical engineering industries which work for the benefit of the mining industry. They also have longstanding experience in mining for fuels. The agreement provides for collaboration in the development of the mining industry, innovative technologies, as well as higher and vocational education in the field of energy. It also constitutes a solid foundation for the implementation of joint business undertakings, science projects and the exchange of knowhow and experiences. Minister Tobiszowski described Silesia as one of the most important industrial regions in Central and Eastern Europe. “It is a coal basin where the extraction of fuels dominates, along with metallurgy, the energy industry and mechanical engineering. Thanks to its solid economic foundations, Silesia faces bright development opportunities when it comes to innovative technologies, science and education, both on the vocational and tertiary level,” he said. “This is why it has great potential to develop economic co-operation with major foreign partners,” Minister Tobiszowski noted. Just like in the Silesia Province in Poland, well-developed industries also form the basis of the West Bengal economy, Grzegorz Tobiszowski noted. He pointed to the region’s high economic growth dynamics over the past few years. “The signing of the agreement providing for co-operation between the two regions
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presents business opportunities for Polish companies and entrepreneurs who are interested in entering promising new markets,” Tobiszowski said. He descrided the agreement as another step in building long-term economic relations between Poland and India. The Undersecretary of State at the Polish Ministry of Foreign Affairs observed that the energy sector plays a significant role in boosting Poland’s economic development. “We hope that it translates into business opportunities for Polish entrepreneurs,” he said during the Partner Country seminar at the Bengal Global Business Summit 2018. According to Grzegorz Tobiszowski, the visit to India, which follows up on a previous round of talks in India last November, will result in steady and active co-operation between the two countries and entrepreneurs. During the seminar, the Jastrzębska Spółka Węglowa coal mining company, the KGHM metallurgical giant and PeBeKa, presented their offers. Business opportunities and challenges currently faced by the energy sector in Poland were also outlined by representatives of the Central Mining Institute and the Polish Development Fund. A spokesperson for the Ministry of Energy informed that during his visit to India, Minister Tobiszowski met with representatives of Indian industry including India Coal LTD and companies form the energy sector. He also visited the Polish pavilion at the Bengal Global Business Summit. The Polish delegation to the summit included entrepreneurs, local government officials from the Silesia Province, representatives of higher learning institutions, including the University of Silesia, members of the Regional Chamber of Commerce and Industry in Katowice and of the Polish-Indian Chamber of Commerce. •
WHY SHOULD INDIAN STUDENTS PICK POLISH UNIVERSITIES?
In the following article Marcin Ociepa, Deputy Minister for Enterprise and Technology, outlines the potential of Polish higher learning institutions in attracting students from India.
I
ndia has recognised Poland as an attractive location to study within the European educational domain. Numerous higher-education institutions have welcomed students from that country. The “Perspektywy” Foundation has estimated that there are approx. 3 thousand Indian students in Poland (which accounts for 4.1% of the total number of international students in Poland, with a growth rate of 37%). For Polish higher-education institutions, it is an opportunity to fill places on courses which have not been selected by Polish students. Moreover, Indian students are willing to enrol on, among others, demanding technical university courses at all three educational levels. It is clear that to the majority of the students Poland is becoming a gateway to the more affluent western world. We are beginning to experience a shortage of both unskilled and highly-qualified staff, while India will soon hold 25% of the global workforce potential. Our role as the Government, and the role of Polish universities, is to foster the proper intellectual potential of the young people invited to study in Poland. It is a well-known fact that large western countries, where the best universities in the world are often located, do not ignore international students, because a long time ago they faced the phenomenon of a drop in the birth rate. Closing higher-education institutions because of an insufficient number of students would weaken the scientific and technological potential of these countries. It should be noted that the academic potential of each country consists of the sum of all the academic institutions’ potential. For this reason, there are over half a million foreign students attending courses in Germany and the UK. In Poland, the share is still ten times lower. There is no doubt that we need to open up the door of Polish higher-education institutions to foreign students. This is one of the objectives of the reform called the Constitution for Science formulated by the Minister of Science and Higher Education and Deputy Prime Minister Jarosław Gowin, and this is the direction outlined by the Conference of Rectors of Academic Schools in Poland (CRASP), first and foremost by the CRASP international-affairs committee.
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The initiatives of higher-education institutions are of great importance here. One example is the CRASP and “Perspektywy” Foundation Academic Fair held in Gujarat, the second most industrialised state in India, Ghandi’s home state. The Government has recognised the efforts aimed at expanding the educational programme for Indian students proposed by CRASP, the Conference of Rectors of Polish Universities of Technology (CRPUT), and each higher-education institution individually. The duty of our consular entities is to make sure that young people who decide to study in Poland meet the requirements for staying in the Schengen zone. Where do young people from India choose to study? The vast majority prefer Warsaw-based higher-education institutions (765 students). The largest group has chosen the Warsaw University of Technology (339), a technical higher-education institution with many of Poland’s most prestigious fields of study, which make the University one of the most demanding institutions, with a vast scientific and technological potential. 110 Indian students, a third of the number at the Warsaw University of Technology, attend courses at the Vistula University, while the prestigious nonpublic Koźmiński University has been chosen by 44 students from India. The Warsaw School of Economics (SGH) has attracted 25 Indian nationals so far, while the proposal of the Medical University of Warsaw has appealed to only 8. The second major academic centre, where relatively a large number of Indian nationals study, is Gdańsk (186). 123 students have chosen the Gdańsk University of Technology, which comes as no surprise (data from GUS - Statistics Poland, and the “Perspektywy” Foundation). The Opole University of Technology is also planning to admit students from India in the near future. The special course programme will mostly be addressed to future mechanical engineers. Young Indians come to Poland with ambitious goals, choosing high-ranking technical higher-education institutions. This proves that the Polish academic potential has become attractive for a country where half the population is under 35. The fact that they choose demanding technical fields of study shows that these young people come to Poland to gain professional qualifications, • which is likely to provide them with a better future.
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EDUCATION:
UNTAPPED BUSINESS OPPORTUNITIES FOR POLAND AND INDIA Pradeep Kumar, Ph.D., President of the Indo-European Education Foundation in Warsaw, writes that according to his Foundation’s estimates more and more Indian secondary school leavers will be keen to study in foreign universities, in the near future. This, he believes, might provide a solution for Polish universities, which are experiencing declining enrolment due to negative demographic trends at home.
H
igher education in Poland as well as in India is undergoing considerable changes based on global demands and national requirements. Indian government plans are in place to transform the sector over the next 5 years. With over 600 million people under the age of 25, pressure is growing on the Indian government to expand the system of higher education. It is expected that in the next 5 years, 40 million students will be seeking higher education in India, where it seems difficult to accommodate this demand. Meanwhile, Poland is introducing many changes in order to attract foreign students to Polish universities for the sake of their survival and continued existence due to unfavourable demographic trends. This applies especially to private universities. Many Polish universities are not getting enough students to run their courses, which is also affecting educational quality. Poland and India could do well by creating a bridge for academic collaboration to address each other’s needs and requirements. According to recent data, growing numbers of young people from India show interest in the Polish education system. In 2014, there was a total number of 227 Indian students in Poland, which increased to 896 in 2016 (www.studyinpoland.pl/ en/index.php/news/43-over-57-119-international-students-inpoland), 3,000 in 2017 and the figure is expected to cross the 5,000 level by 2019. The latter estimate was made by the author on the basis of his experiences as an academic working with the Polish and Indian higher education systems.
It is not only about the growing size of India’s middle class but also changing dynamism of household incomes in Indian society. The above figure shows that by 2022, about 40-45 million Indian households will be in a position to spend USD 5,000 - 20,000 for their children’s higher education, bearing in mind that more than 50% of the country’s population is under the age of 25. By 2020, India will have one of the youngest populations in the world, with an average age of 29 years. The above comparative data shows that there is plenty of room for Polish universities and Indian students to fulfil each other’s needs based on the supply and demand model. While the lack of universities in India will force its students to go abroad for higher education, foreign universities are bringing changes in their courses to make them more attractive to get well qualified students. In line with recent changes introduced by the All India Medical Council in New Delhi, “any student who completes his/her bachelor degrees or equivalent degrees to MBBS, either from Indian medical universities or abroad are subject to pass eligibility test (conducted by AIMC) in order to get license to start practice in Indian hospitals”. Considering that, in the past, graduates of India’s medical universities did not need to pass this test, and will now be required to do so, they are likely to be more ready to go abroad for their medical studies, including Polish universities. On their part, universities in Poland could do well with Indian students who will pay full tuition • fees. polish market
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INDIAN MARKET FOR HIGHER EDUCATION • Total population of India 1.35 billion; • Largest education system in the world in terms of the number of institutions and largest in terms of the number of students; • Over 600 million people below the age of 25; • Over 32% of the 1.35 billion population is in the age group 0- 14; • The number of people in India needing primary and secondary education alone exceeds the entire population of the USA; • As per today, India has 26 million students enrolled in tertiary education. By illustration, it would need another 800 universities and over 40,000 colleges in the next eight years to provide the planned additional 14 million places; • By 2023, India needs 40 million university places; • By 2025, India needs 500 million skilled workers; • Institutions offering a degree and diplomas: 50,774; • Universities in India: 760
• The health care sector is one of the fastest growing sectors in India (at a rate of 15% per annum) and is expected to reach the value of USD 250 billion by 2020. • With public investment of USD 60 billion, it has become one of the high priority sectors for development; • Medical Universities/ Colleges teaching medical courses (MBBS): 479, www.mciindia.org/ActivitiWebClient/ informationdesk/listofCollegesTeachingMBBS; • The capacity to accommodate: total number of students 60,845 per year; • Very tough entrance examinations to get admission to medical courses. Donations encouraged to secure a place at a medical university; • Many students are not admitted - even after their 3-4 years of preparation for medical studies.
POLISH HIGHER EDUCATION MARKET • • • • • •
MEDICAL EDUCATION IN POLAND
Total population 38.14 million; Total number of universities 501; Government funded universities 131; Private Universities 326; Total number of students enrolled 1.5 million; International students 57,119;
• Total number of medical universities offering MBBS/MS studies 11; • Capacity to accommodate total students 127,318 per year; • Too few candidates; • Financially weak to start English teaching programmes; • Well-equipped, high tech institutions ; • Low tuition fee EUR 7,000 – 12,000 a year.
Income factor: growing Indian middle class Household income
No. of households (2012)
No. of households (2022)
Over USD 20,000
2.5 million
7m
USD10,000 – 20,000
4m
19m
USD 5,000 – 10,000
34 m
81m
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POLAND HAS TECHNOLOGICAL
POTENTIAL
Tomasz Pisula, President of the Polish Investment and Trade Agency, talks to "Polish Market". The Polish Investment and Trade Agency is currently developing a network of Foreign Trade Offices. What criteria are applied in the selection of new locations? Above all, we do our best to follow current business trends. We take note of where Polish firms operate and what markets they look at. We talk to entrepreneurs about the markets they find interesting. Not so much help is needed wherever Polish firms are doing well by themselves and where they have been active for some time. But support is needed in those markets where the potential is growing and where international competition is becoming fierce. In these places either no diplomatic activity was undertaken before, or more frequently, the first attempts were made to open a government credit line or to sign international agreements. A good case in point is CETA, the free trade agreement between the European Union and Canada. We try to aggregate all these factors, and on their basis, to map new directions together with the government side. Apart from countries which have always been important economically to our companies, we mainly focus on developing countries where a demographic explosion is taking place. These are usually countries where less advanced, reasonably priced but reliable technologies are in demand. They are attractive markets for Polish companies. PM
PM
What value do Foreign Trade Offices present to the potential foreign investor? What are their responsibilities in terms of attracting foreign capital?
Attracting foreign capital to Poland remains part of our mission and it will be one of the responsibilities of Foreign Trade Offices, especially in countries or regions of the world whose economies are well-developed. However, the offices’ primary goal is to assist Polish investors in their foreign expansion. When we know that a Polish firm tries to set up a plant or purchase an existing company abroad, we do our best to help it in its undertakings. We provide information about good business opportunities outside Poland, we help to verify the credibility of partners, we offer advice on the choice of location. I have personally taken part in negotiations which followed business leads our Trade Offices came up with. We have extended our assistance to investment projects in Singapore, Malaysia, Vietnam, and most recently in Germany. We have provided considerable amounts of information and business analyses to companies which planned to invest in Mexico, the US and in East African markets. I would like to stress that we are talking not just about simple exports but also complex investment activities outside Poland. A Foreign Trade Office is now being set up in Kiev. What plans does the Polish Investment and Trade Agency have for co-operation with Ukraine? In the near future we will be launching an office in Kiev. We are also planning to open one in Minsk in Belarus. Many Polish companies are interested in securing manpower from Eastern Europe, building their plants there and outsourcing part of their business services to PM
optimise costs. Trading with Russia and the Far East via Ukraine and Belarus is also important. In Poland there are companies which do it very successfully. In what way is Poland’s perception abroad changing? Are we successful in persuading foreign investors that Poland is moving away from its former role as a country of cheap manpower to become a country which is open to innovation? One good example is the fact that Silicon Valley investors have started arriving in Poland. They openly say that Poland has world-class technological talent. Add to that the fact that the time difference between Poland and the US, especially the East Coast, is very beneficial. Poland is famous for its very high work culture, which west European or US firms are unlikely to find for instance in India. Interestingly, in the Silicon Valley there are too many investors and too few projects to invest in. In Central European countries, including Poland, there are too many projects but there is too little money, especially for the middle stage of company development, what is commonly known as start-ups. There are sufficient resources to finance the first stages of a project – there is talk about an amount of USD 500 million. But problems arise during product development, scaling and market launch. It is precisely at this stage that serious US investors become partners in promising projects or base their companies in Poland. To answer the question whether Poland has technological potential, I can definitely say that it does. • PM
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POLAND AND INDIA: OPPORTUNITIES GALORE The Indo-Polish Chamber of Commerce and Industry has been actively fostering business relations between the two countries for more than a decade. In an interview with “Polish Market”, the Chamber’s President J.J. Singh discusses present undertakings and outlines a vision of future relations.
Would you say that Poland and India are fully tapping the potential of bilateral co-operation? In what areas do you think it could be developed? Trade between the two countries stands at a little below USD 3 billion at present, year-over-year trade in 2017 increased by 15%, but there is still a lot of potential which can be developed. Both sides have exchanged a number of visits on important trade and business occasions such as in the beginning of 2018 where a strong business delegation from Poland under the Ministry of Foreign Affairs economic division and the Ministry of Energy attended the Bengal Global Business Summit. It was a good platform for companies from the energy sector to explore opportunities in the mining sector (coal extraction, combating issues with methane gas and further training programmes for deep mining.) A memorandum of understanding was signed between the Polish province of Silesia and West Bengal to expand business and trade cooperation between the two regions. A team at the Polish Ministry of Energy under the guidance of Deputy Minister Grzegorz Tobiszowski is working on joint efforts of Polish energy companies to provide a comprehensive product range for the Indian PM
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UNDER THE MAKE IN INDIA PROGRAMME WE HAVE IDENTIFIED CERTAIN SECTORS WHERE POLISH BUSINESS CAN GAIN A FOOTHOLD BESIDES THE ENERGY SECTOR. THERE ARE IMMENSE OPPORTUNITIES IN FOOD PROCESSING , IT, CHEMICAL INDUSTRY, MEDICAL EQUIPMENT, AUTOMOBILE, DEFENCE AND PHARMA INDUSTRIES, PORTS, RAILWAYS, RENEWABLE ENERGY, THERMAL POWER AND TEXTILE/ GARMENTS INDUSTRY
mining sector. We strongly believe that this will produce results in this important sector for both sides. A delegation of the Polish Ministry of Agriculture participated in the AHHAR food fair in New Delhi in March and there should be a continuation of such visits to enhance and capitalise on the changing landscape and opportunities in India. There will be a delegation from Punjab in May 2018 to explore the opportunities in Poland for various sectors involving investments and joint ventures. Our chamber is there to advise and assist any governmental and business institutions to develop trade and cooperation. Poland is in the process of transforming its economy to move from a mid-level development phase to an innovation and new technology-driven economy. India is doing a lot to promote itself as a place where foreign companies can bring in new technologies as part of the Make in India initiative. These two facts make Poland and India ideal partners, don’t they? We have been extensively involved in promoting the Make In India Programme in Poland and there are various other programmes, including Digital India, Smart Cities and Start up India. We are planning to send a delegation to the Smart Cities convention in India in May together with the Polish Chamber of Commerce. Under the Make In India programme we have identified certain sectors where Polish business can gain a foothold besides the energy sector. There are immense opportunities in food processing , IT, chemical industry, medical equipment, automobile, defence and pharma industries, ports, railways, renewable energy, thermal power and textile/garments industry. With possibilities of up to 100% direct investment in the above mentioned sectors, foreign investors have control over their intellectual property and resources. Investors can get access not only to the Indian market but also to markets of the neighbouring countries. We have to make sure that the message gets through to Polish business and that Polish government programmes help Polish business to expand beyond Europe. PM
Who are your Chamber’s members? In what way do you offer them a helping hand in bridging the two different legal systems, mentalities and cultures? The majority of the founding members are Indian businesses registered as legal entities in Poland and various Polish companies dealing with the Indian market. For a decade now the Chamber has been playing an important role in successfully promoting and bringing business and industries from both countries closer to each other. We are collaborating with the Polish administration in creating awareness through an exchange of business delegations, seminars and roadshows to tackle issues related to legal and cultural differences where our member companies play an important role. PM
How do you see your Chamber’s future role in fostering the development of business contacts between the two countries? The Chamber will continue to follow the successful road map laid out for the last decade in promoting businesses in both countries. We need to make sure that the momentum of contact and cooperation will increase further with the participation of business and administration in various important events promoting trade and business. We need to underline that for Poland, India has proved to be a worthwhile partner for years and the future can be fruitful for both countries if business exchanges and investments are intensified by making the existing platform stronger with the cooperation of the Chamber and administration on both sides. • PM
Contact: www.ipcci.pl; jjsingh@ipcci.pl polish market
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ECONOMIC RELATIONS BETWEEN POLAND AND INDIA Let us take a closer look at the latest facts and figures concerning Polish-Indian economic relations. The following report was compiled by M. Konarski of the Ministry of Enterprise and Technology. The following trends and phenomena can be observed in Polish exports to the Indian market: • Products of the electromechanical industry have for years occupied the top place among Polish exports to India, although the volume of these exports is subject to fluctuations and a slight drop of 3% was recorded last year. In 2017, Poland exported to India USD 273.4 million worth of electromechanical products, which accounted for slightly over 37% of the overall value of Polish exports to India. Engines, turbines and telecom equipment were the primary exports. • Mineral products, especially coke and semicoke made from coal, were in second place among Polish exports to India in 2017. The value of coke and semicoke exports rose 114% from USD87.6 million in 2016 to USD187.8 million in 2017. All in all, Poland exported USD190.2 million worth of mineral products, which accounted for 25.8% of its overall exports to India in 2017. • Products of the chemical industry remained in third place among Polish exports to the Indian market. After a significant drop in 2015, the value of these exports has been growing steadily. It increased from USD76.3 million in 2015 to USD102.6 million in 2017. Products of the chemical industry accounted for 13.9% of Polish exports to India in 2017. • Metallurgical industry products, which were in second place among Polish exports to India in the years 2014-2016, moved down to fourth place. The value of these exports decreased from USD142.7 million in 2014 to USD87.2 million in 2017, or by nearly 39%. Products of the metallurgical industry accounted for 11.8% of Polish exports to India in 2017. The following trends and phenomena were observed in Polish imports from India: • Products of the chemical industry have for years remained in first place among goods imported to Poland from India. The value of these imports has grown consistently – from USD507 million in 2014 to USD865 million in 2017. Last year, chemical products accounted for 35.7% of Polish imports from India.
• Light industry products are in second place among Polish imports from India. After a slight drop in 2015, the value of these imports has been growing steadily – from USD434.3 million in 2015 to USD589.3 million in 2017. Last year, products of the light industry accounted for 24.3% of the overall value of Polish imports from India. • Products of the electromechanical industry are in third place among goods imported to Poland from India. Imports of these products have seen a steady increase – from USD245.2 million in 2014 to USD347.5 million in 2017. Last year, products of the electromechanical industry represented 14.3% of Polish imports from India.
INVESTMENT COOPERATION In 2016, India was the prime location for Polish direct investment in Asia. According to National Bank of Poland (NBP) data, at the end of 2016, the cumulative value of Polish direct investment in India reached PLN984.7 million. And the value of Polish direct investment brought to India in 2016 alone was PLN17.4 million. Some of the Polish companies which have achieved success on the Indian market are: • Toruńskie Zakłady Materiałów Opatrunkowych SA – the largest Polish investor in India, present on the market since 2002. The company manufactures and sells hygiene products for women and children under the brands Bella, Bella Baby Happy and Bella Cotton, and absorbent products for adults under the brand Seni; • Polmor Sp. z o.o., present on the Indian market since 2009, has a plant with an Indian partner in Hyderabad to manufacture welded structures for rolling stock; • Can-Pack SA, present on the Indian market since 2009, produces and sells in India cans for drinks; • Obram Sp. z o.o. sells in India process lines for the production of paneer cheese. • Komandor SA launched a furniture plant with an Indian partner in 2011.
Trade between Poland and India in 2014-2017 (in USD million) 2014
2015
2016
2017
CHANGE 2016/2015
CHANGE 2017/2016
TURNOVER
2 274.8
2 211.7
2 769.3
3 160.4
125.2%
114.1%
EXPORTS
552.5
464.6
669.7
736.3
144.1%
109.9%
IMPORTS
1 722.4
1 747.1
2 099.6
2 424.1
120.2%
115.5%
BALANCE
-1 169.9
-1 282.5
-1 430
-1 687.9
X
X
Source: INSIGOS – MPiT
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Exports/Imports between Poland and India
BALANCE
EXPORTS/CHANGE
◄
EXPORTS
◄
IMPORTS
IMPORTS/CHANGE
In 2016, Polish company Solaris Bus & Coach SA signed an agreement with Indian consortium JMB Group on setting up a joint venture company to manufacture electrical and hybrid busses. The prototype of the first bus intended for the Indian market was unveiled in October 2017. As part of cooperation in the mining sector, the AGH University of Science and Technology in Kraków has signed an agreement with Coal India Ltd. on training Indian mining engineers working in mines managed by Coal India. The project is carried out in conjunction with Poland’s mining inspectorate and Famur SA. And in September 2017, Polish software company Billennium Sp. z o.o. opened an office in Mumbai. According to NBP data, at the end of 2016 the cumulative value of Indian direct investment in Poland reached PLN251.4 million, putting India in fifth place among the biggest Asian investors in Poland. In the same year, Indian companies invested in Poland PLN71.3 million. According to Statistics Poland (GUS) estimates, 129 Indian-owned companies operated in Poland at the end of 2016. Most of them, i.e. 103, employed up to nine persons. Three Indian companies with capitals exceeding USD1 million were present on the Polish market. In recent years Indian companies have shown increased interest in the Polish service sector, especially IT services. Among the Indian companies which have opened their offices in Poland are CSS Corporation (Wrocław), HCL Technologies (Kraków), Infosys BPO (Łódź), KPIT Cummins Infosystems (Wrocław), Mphasis (Wrocław), Tata Consultancy Services (Warsaw) and Wipro (Warsaw). The Indian companies present in Poland also include Sharda Group (household textiles), Escorts Group (agricultural tractors), Essel Propack Group (laminated and plastic packaging), Rishabh Instruments (an 85% stake in LZAE Lumel SA, a producer of measuring instruments) and Uflex (packaging films). The statistics do not count Arcelor-Mittal’s investment in Poland as Indian because the company is based in Luxembourg. Arcelor-Mittal Poland is the largest steel producer in Poland. It provides employment to more
than 11,000 workers in six manufacturing sites in the provinces of Śląskie, Małopolskie and Opolskie. The company has invested about PLN6 billion in Poland since 2004.
PROMISING AREAS OF BILATERAL COOPERATION Because of its demographic and economic potential, India is one of the most important actors in the political and economic scene in South Asia and globally. For this reason, the Polish government has chosen India as one of the five promising markets covered by a special promotion programme. Apart from general measures designed to promote the Polish economy, the programme is to provide Polish enterprises, especially small and medium businesses, with instruments for their expansion on the Indian market, in particular in the form of refunding part of their expenditure on promotional activities. Businesses operating in five sectors considered to offer prospects for the expansion of Polish exports – machines and equipment, biotechnology and pharmaceuticals, Polish food specialities, fashion and furniture – have indicated India as one of the non-European markets where intensive promotional activities should be conducted. This enabled the government to properly direct financial support for small and medium businesses from these sectors intending to export their goods and services to India, or invest on this market. The government also continues its Go India promotional project, which is designed to encourage Polish businesses to a more vigorous search for business partners on the Indian market. Additionally, the Ministry of Enterprise and Technology sees potential for bilateral cooperation in the following areas: mining, power industry, defence industry, pharmaceutical and medical equipment industry, foodprocessing industry, environmental protection facilities and technologies, and cooperation between research and development units. •
Trade by product groups in 2016-2017 EXPORTS 2017
IMPORTS 2017
CHEMICAL PRODUCTS
METALLURGICAL PRODUCTS
CERAMICS
AGRI-FOOD PRODUCTS
LIGHT INDUSTRY PRODUCTS
◄
MINERAL PRODUCTS
◄
ELECTROMECHANICAL PRODUCTS
EXPORTS/CHANGE
IMPORTS/CHANGE
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SPOTLIGHT ON POLISHINDIAN RELATIONS T
he 10th European Economic Congress is held at the ‘Spodek’ Arena and International Conference Centre in Katowice on May 14–16 2018. It is the largest economic event in Central Europe. A side-line event will be the 4th European Start-up Days (May 15–16 2018). The achievements of the past nine editions have proved that the European Economic Congress has found its permanent place on the map of the largest economic events in Europe. Over less than a decade, the European economy, and the Polish economy as its part as well, have undergone profound changes. The Congress has consistently pursued its ambition to indicate trends and phenomena that keep changing the image of economic life, including its social context. In 2018, the focus will be on the Congress 10th anniversary, together with a glance into the future to find solutions to new challenges. Polish-Indian economic co-operation will figure prominently during the Congress. The following topics will be tackled during the Poland-India panel.
THE INDIA – POLAND ECONOMIC COOPERATION FORUM • India as one of five promising markets according to Poland’s Ministry of Economic Development • Market entry barriers and opportunities for Polish business • The middle class in India: What goods do consumers seek? • Industries marked by the greatest potential for growth • Investment in the smart modernisation of urban infrastructure • Other types of investment, and public procurement • West Bengal – Poland. Co-operation in the mining industry
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• Prospects of Polish-Indian co-operation in the extractive sector. Legal and concession-related as well as economic conditions for entry to the mining market in India • Polish manufacturers of mining machinery and equipment – their knowledge, customer base and network of relations in India. The administrative and financial support for business • Possibilities of co-operation between the Polish Development Fund and the institutions that finance the development of infrastructure in India • Development of the coal export infrastructure. Partnership in seaport construction • Demethanation of mines and the industrial utilisation of methane – Polish experiences • • Co-operation in the field of safety at mines
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PRESIDENT VISITS A PLANT OF ONE OF THE LARGEST POLISH INVESTORS TO INDIA President of the Republic of Poland Andrzej Duda visited the Plastica plant in Kowalewo Pomorskie, northern Poland, on March 20. Plastica is part of the TZMO Group, which has twice won the Economic Award of the President of Poland. In 2012 it received an award in the Presence on the Global Market category, and in 2016 in the Responsible Business category.
P
lastica was founded in 2004. It belongs to the TZMO Group, a global maker and supplier of hygienic products, cosmetics and medical products and services. Its brands include Bella, Seni, Matopat, Happy, Eva, Dr Max, No1, Tricomed, Optus and CitoNet. The Group includes over 55 companies in Poland and other countries. Between them they provide employment to over 7,600 people.. TZMO SA products are marketed in over 80 countries of Europe, Asia, Africa and in the Americas. The company is present in markets where a third of the world’s population lives. “Your company serves as a model for the development of business in Poland. You can safely say that it is big business,” President Duda told the plant’s crew. The President said the plant made a great impression on him. He noted that, although TZMO was founded in communist Poland, it has operated in a market environment for nearly three decades when a number of similar companies collapsed, while the plant has survived and developed. Andrzej Duda said that the privatisation of the company was carried out in an optimum way, “which has enabled it to develop successfully.” He also praised TZMO’s potential – the Group is now composed of over 56 companies and operates on 18 markets around the world. One of them is Plastica, which according to Andrzej Duda is an ultramodern plant that relies on innovation and development. “Today the company is present practically all over the world. A third of the world’s population is able to buy products of the TZMO Group,” the President said. He noted that TZMO has been among the laureates of the Economic Award of the President of Poland two times already. In 2012 it was granted the prize by the then President Bronisław Komorowski. It received another award in 2016 in the Responsible Business category. Andrzej Duda emphasised that the company’s activities in the sphere of Corporate Social Responsibility were among the reasons why the award went to TZMO. “The company is open toward Man and his needs,” he explained. President Duda said he wished other Polish companies followed TZMO’s example of how to do business. “The company has its roots in Poland, it is ready to meet challenges, it has the capital and skills to successfully enter other markets, it pays growing amounts of tax in Poland and reinvests its profits, it creates new jobs and builds new Polish brands which become internationally recognised. This company is a model when it comes to the development of business in Poland,” Andrzej Duda said. •
Sources: President.pl, TZMO
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LODZ SEZ: FORGING BUSINESS LINKS WITH
I
ndia is an untapped partner for Poland and offers a potential for cooperation with Asia’s third biggest economy, which has based its growth strategy on the development of the modern business services sector catering mainly for external markets. The share of this sector in Indian exports is very high and exceeds 30%. What is more, Indian services exports have been growing at one of the fastest rates in the world. Modern business services are among the most rapidly developing economic sectors in India. Infosys, the largest Indian company operating in the IT/BPO sector, listed on the Nasdaq Stock Market, has been present in the Lodz Special Economic Zone for 10 years now. The Infosys investment in Łódź was a result of efforts taken 13 years ago when the city started to carry out a McKinsey strategy to make the IT/BPO sector one of the pillars of its development. Since that time a dozen or so firms from the sector have become established in Łódź, among them Infosys Poland Sp. z o.o, Ericsson, Deloitte Digital BPO Sp. z o.o., Fujitsu Technology Solutions Sp. z o.o. and Globitel Sp. z o.o.
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INDIA
Most of the companies operate in the Lodz Special Economic Zone. “Attracting these companies to the Zone was possible because it offers good conditions for investment and a favourable climate for the development of the IT/BPO sector,” says Marek Michalik, president of Lodz SEZ, the company which manages the Lodz Special Economic Zone. Łódź offers investors access to well-qualified human resources as local universities turn out 20,000 graduates a year, one fourth of whom have economics degrees and 90% say they have a command of the English language. The Zone also provides 360,000 sq m of modern office space, with monthly rents ranging from EUR11.5 to EUR12.9 per square metre. Another advantage is a welldeveloped start-up ecosystem. “The largest IT/BPO investor in the Zone is Infosys, which still sees a potential in Łódź,” says Agnieszka Sygitowicz, vice-president of Lodz SEZ “Infosys has not only invested in the Zone, but has also decided to reinvest here [two permits, USD14 million invested and 2,500 jobs created – ed.]. Thanks to our direct contact with Indian
business, which wants to recommend the Zone to investors from that country, and having analysed global trends, we have decided to develop business activities on this market.” Last year, Lodz SEZ organized a economic mission to India to establish economic contacts and present the investment potential of the Zone to Indian businesses, especially those active in the IT/BPO sector. President Marek Michalik took part in the Global Entrepreneurship Summit 2017, which was attended by over 1,500 participants from 127 countries. The Lodz SEZ delegation was the only delegation representing a Polish special economic zone at the summit. “While in India we also visited the headquarters of Infosys in Bengaluru. The contacts we have established and the experience gathered helped us in taking the decision to establish cooperation with a representative with extensive experience in attracting global firms to advise the Lodz SEZ Management Board on matters concerning the Indian market. It promises to be an Indian year at the Lodz Special Economic Zone,” says Pres• ident Marek Michalik.
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INDIA AND WEST POMERANIA –
HAND IN HAND
I
ndia is the Poland’s major partner in South Asia. Since the two countries have already developed intensive trade relations, the Polish Ministry of Economy established the Go India Programme to shift them to another level. It is a direct counterpart of the India’s strategy of ‘Make In India’. India provides tremendous opportunities for Polish exporters and investors, since it is a country of ample opportunities, open for the cooperation with Poland. Indian companies have already invested U$3 bn, and some of them are present in West Pomerania. Those companies include Liberty Forging Group, which has bought Barlinekbased Bomet and manufactures agricultural machines, Foresight Plastics & Engineering having its plastics distribution centre in Police, and the Szczecin-based Genpact Group, the global leader in business process outsourcing. ‘I am certain that together with the Western Pomerania-India Chamber of Commerce, we are capable of attracting the Indian business to the West Pomerania. This region can be interesting for companies from India due to its geographic location. It is a gateway leading to German and Scandinavian markets that are so important for the India’s economy, said Marshal Olgierd Geblewicz. The collaboration between the Region and the Chamber concentrates primarily on Mumbai and the State of Maharashtra, the third largest region in India as regards its size and the second largest in terms of its population. Natural fields of collaboration between Maharashtra and West Pomerania seem to include agriculture, IT and RES. The signing of a relevant agreement between the Region and the State has been scheduled in the second half of the year. ‘Although we are thousands kilometres away, it is a particularly interesting challenge. We are working towards a solution that will benefit both parties’, said Marshal Geblewicz. The first joint event of the Western Pomerania-India Chamber of Commerce and the Marshal of Westpomeranian Region, with the involvement of representatives of the Indian Embassy in Poland Charge d’affaires Mr. Takhi and First Secretary of Commerce Mr. Surendra, took
Marshal Olgierd Geblewicz and Chamber President Mariusz Łuszczewski during the panel „Supporting economic growth by facilitating business“
place in December last year. During the seminar there were presented opportunities for investors from West Pomerania on the Indian market and attendees discussed, inter alia, transport, logistics, waste management, and digitization of services. The seminar was crowned by the performance of Vidya Shah, a star of Indian ethnic music. In result of the effort made by the Chamber of Commerce, the Region received an invitation to the Global Economic Summit in New Delhi, the largest business event in India. At the end of February 2018, the capital of India attracted over 30 heads of state, including the Prime Minister of India. The discussion on the ‘New Economy’ involved representatives of such global corporations as Oracle and Netflix. Marshal Olgierd Geblewicz together with Mariusz Łuszczewski, the President of the Western Pomerania Chamber of Commerce, took part in the panel discussion on ‘supporting economic growth by facilitating business’. ‘The Summit was an opportunity to attract Indian foreign investment to West Pomerania. Indian businesses have already showed their interest in such locations as Szczecin and Goleniów. It
is also worth mentioning that on 9th March, in Szczecin, the CEO of Baijnath Melaram, a company specialising in ship recycling, announced the opening of their European headquarters in Szczecin’, said Olgierd Geblewicz. During their stay in India, a meeting was held between the Indian Minister of Railways and representatives of the Szczecin-based Autocomp Management. The company, known for its innovative simulators, is a party bidding for the supply of 14 simulators for the Indian Railways. Moreover, Autocomp has considered moving a part of its production to India. ‘India has been fascinating people for centuries. While searching for India, Christopher Columbus discovered the New World. While looking for their path to Europe, India is about to discover their New World too. Although it is not easy, opportunities are always there. The Indian market attracts everyone. I really cross my fingers for the first contract and initial investment, since the interest in our region has been already triggered, and it will certainly bring benefits in the future’, said Olgierd • Geblewicz. polish market
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GATEWAY TO EUROPEAN MARKETS
The newly formed Western Pomeranian-Indian Chamber of Commerce is based in the city of Szczecin, and is headed by businessman Mariusz Łuszczewski with a Polish-Indian family background. Its primary aim is to foster business links between the Western Pomerania region and the Indian state of Maharashtra. As Mariusz Łuszczewski tells Rafał Kiepuszewski, thanks to its location on the Baltic Sea close to the German capital Berlin and Scandinavia, the region is an ideal springboard for Indian entrepreneurs’ European expansion plans.
At a recent event hosted by your Chamber, you said that Western Pomerania was a blank spot on the map of Indian business involvement in Poland. How are you planning to change that? Indian companies have invested a sum of about USD 3 billion in Poland. We have a confirmation that it will be rising to about USD 5 billion. We can see investment projects by Indian companies all over Poland, but so far the Western Pomeranian region hasn’t attracted this investment. So we have decided to promote this region as an open gate for investment by Indian companies in the west of Europe. We are an ideal springboard for them to expand to the German and Scandinavian market, to export their products all over Europe. The city of Szczecin lies just ten kilometres away from the German border and it’s only a 120 kilometre PM
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drive away from the German capital Berlin. Szczecin is also a port city, so we are very close to Scandinavia. The location puts us in an ideal position for Indian companies which want to export their products all over Europe. What is the potential of Western Pomerania? How are you going to attract Indian entrepreneurs to take a plunge in your region? We have lately visited the ET Global Business Summit in New Delhi. It was attended by Indian Prime Minister Narendra Modi, government ministers and top-level businesspeople. Together with Marshal of Western Pomerania Olgierd Geblewicz I took part in a round table meeting at the summit. We decided to show the participants how well positioned Western Pomerania is for doing business in Europe. We showed them PM
a map of Europe and zoomed in on Szczecin, which came up right in the middle of Europe. They saw we are a gateway to the whole European continent. It is very important to promote Poland in India and vice versa. More involvement will be needed on the part of the Polish government, local government and business for business plans to succeed. The current Polish government and the local government in Western Pomerania are very open to investment from India. Very significantly, we have established a state-to-province agreement between the province of Western Pomerania and the Indian state of Maharashtra. This is the first such agreement between two regions. But we also have an agreement with the EuropeanIndian Chamber of Commerce which is based in New Delhi. At the Global Business Summit we received confirmation that an Indian packaging company is ready to invest a sum of EUR 100
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million in Western Pomerania. They are looking at sites in the Szczecin area to build a factory of industrial foil and food packaging, which will initially employ a crew of 150, which will ultimately grow to 300. Maharashtra is the Indian state whose capital is Mumbai, the hub of the country’s trade and industry. Do Polish entrepreneurs in your region realise the scale of opportunities that exist there? Yes, they do. We have a lot of companies, especially based in the city of Szczecin, which are looking very strongly into doing business in Maharashtra. The first company is Autocomp Management, which makes training simulators, and which has its own R&D centre. They sell their products in Germany, Israel and other countries. With the help of the West PomeranianIndian Chamber of Commerce they have already opened an office in India. Autocomp Management are looking to produce simulators in India for the railway industry. About 30-35% of the technology will be Polish and the rest will be done in India. The most important thing is for Polish companies that want to enter the Indian market to know precisely what they want to do there, be well prepared, and then we can help them to succeed. PM
How many companies have joined your Chamber since it was set up last year? We have about 120 companies at this moment. We are looking into various areas of co-operation. India is very strong in terms of the maritime economy, it is developing its ports, while the Polish government intends to rebuild the shipbuilding industry and to develop ports. In March we had a visit from Baijnath Melaram, a company from Gujarat, which wants to set up an office in Szczecin to manage its interests all over Europe. Its area of operations is scrapping disused ships. The major Indian company Essar Ports has taken an interest in the Polish market. They are coming to explore opportunities in Szczecin port in May. We also have some IT companies from India which want to come to Poland and open their headquarters to work together with Polish firms to develop the IT business. On May 18 we will be attending another business summit in Mumbai.
You are also involved in promoting Indian culture in Poland, and here your family background helps a great deal, doesn’t it? I’m half-Polish and half-Indian. My mother was Miss India 1976. My aunt is a Bollywood star. I was born in Szczecin, so I can understand very well the Polish mentality and the Indian way of doing business. I am myself a blend of Polish and Indian culture, so I can forge links between Polish and Indian people. As a Chamber, we are working very closely with the Indian Embassy in Warsaw to organise several cultural events this year. One of them will be a major event devoted to Bollywood movies. We will also be promoting Western Pomerania as a location for the production of Bollywood films. We are hoping this will help to promote our region in India. It is very important to develop both business and cultural links between the two countries. • PM
PM
Left to right: Pavan Kashal IDFC Bank and WPICC partner, Rajiv Agarwal, CEO Essar Ports, Western Pomerania Marshal Olgierd Geblewicz, Mariusz Łuszczewski, WPICC President
What are some of the Polish companies from your region which stand the best chance of succeeding in India? India is developing very fast and is in need of technologies. Polish companies have the technology to come into India and help Indian companies grow faster. We have identified a number of companies which could enter the Indian market. One Polish company is Redox. They are already operating all over the world, for example in America. They have technologies for the cleaning industry. This fits in very well with the government Cleaning India concept. This kind of firms could do well in India. PM
Higher education is said to be an area of exciting opportunities as the number of Indian students at Polish universities is growing. How are you promoting this idea in Western Pomerania? Local universities, especially the medical university and IT faculties, are showing great interest in attracting Indian students with the support of the local authorities. We are helping local universities to tailor their offer to the needs of Indian students. PM
The signing of an agreement between EBTC and WPICC. Signatories: Poul Jensen, EBTC Director, Mariusz Łuszczewski, WPICC President. Standing to the left: MarshalOlgierd Geblewicz; right: Varun Sehgal, EBTC Vice President
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A WIDE ARRAY OF BUSINESS IDEAS The Indo-Polish Chamber of Commerce and Industry (IPCCI), which was set up in 2008, has allowed Polish enterprises to enter the Indian market, while also encouraging investors from India to do business in Poland. Anna Kalata, a politician, economist, entrepreneur, economic advisor and academic teacher, who performs the function of IPCCI Vice-President, tells “Polish Market” about the Chamber’s role in developing Indo-Polish economic cooperation. You represent the longest-operating chamber of commerce which deals with Polish relations with India, having gained the most substantial experience in this field. Which companies have you helped to enter the Indian market, and which businesses from India have you succeeded in encouraging to invest in Poland? This year we are celebrating our 10th anniversary, so it’s a good moment to summarise our activities. We are extremely pleased to see that each year more and more enterprises from Poland and India are becoming interested in cooperation. There is a wide array of business ideas, ranging from the exports and imports of goods, technology transfers, and sales of services, to joint investments. A number of large Indian companies have already established their branch offices in Poland. Small and mediumsized entities are also active in this field. It is worth stressing that trade turnover between Poland and India has seen dynamic growth. In 2016 it amounted to USD 2.77 billion, reaching the highest level in six years. Referring to the second part of your question, let me mention those industries which we support, given their huge potential for bilateral economic cooperation. These include the aviation, automotive, machine, chemical, textiles, agricultural, food processing, renewables, and waste management sectors. PM
There are several Indo-Polish chambers currently operating in Poland. What makes yours stand out? As you have already mentioned, we are the longest-operating chamber, so our experience is vast. Moreover, we are extremely active, organising frequent economic missions to India for Polish businesses, and hosting numerous business delegations from that country. For many years we have supported the participation of our domestic entrepreneurs in various trade fairs and conferences PM
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held in India. Among numerous business events, special attention should be paid to the Vibrant Gujarat Global Summit, which attracts several thousand business people, and the Annapurna fairs, which are the most important food-industry event in India, held annually in Mumbai. Finally, we organise conferences and seminars in Poland with the aim of presenting diverse business opportunities which Polish entrepreneurs can explore in India. Are Polish businesses aware of the opportunities being offered on the Indian market? I think much is yet to be done in this field. The Indian market affords many advantages, but it is by no means easy to penetrate. Not all entrepreneurs are aware that India is one of the fastest-growing economies in the world. In recent years, the annual economic growth has revolved around 7%, in some years reaching as much as 10%. The potential of the Indian market is reflected in a population exceeding 1.3 billion, with a middle class of 300-350 thousand people. The consumer market in India is enormous, and I can hardly refer to any sector which is currently facing a recession. However, despite this impressive potential, the Indian market is hard to operate on. This stems not only from the significant spatial distance and the lack of direct air connections, but also from the fact that the proportion of the public sector in some industries in India is still substantial, with domestic producers being privileged in government contract award procedures. Moreover, there is a high level of protective barriers, coupled with a complex system of economic regulations. All this forces entrepreneurs to employ fairly advanced foreign trade methods. Finally, the cultural differences involved in doing business in India can hardly be disregarded. Unfortunately, judging from my experience, Polish entrepreneurs do not always PM
take this into account when developing a strategy for entering the Indian market. I would like to stress one more issue important in the context of Polish business awareness and the Indian potential, that is labour-force resources. Recent months have brought an increased interest among Polish companies in staff resources from India. Our domestic entrepreneurs are increasingly facing a shortfall in the workforce in the construction, meat-processing and agricultural sectors, to name but three. The IT and automotive industries also offer a huge potential. India is inhabited by 800 million young people aged less than 35, who are ambitious, friendly, well-educated, Englishspeaking, and willing to accept new challenges. This constitutes an unquestionable asset which could be utilised not only by Poland, but also by the whole of Europe and the world. Poland’s economic diplomacy has undergone major changes. The Trade and Investment Promotion Sections have ceased to function, and they are to be replaced by trade offices to be established by the Polish Investment and Trade Agency in the capital cities of our key trading partners, including India. Do business people feel confused, given these circumstances? What role does IPCCI wish to assume in this context? The lack of smooth transitions is what Polish entrepreneurs have definitely struggled with. Despite the Trade and Investment Promotion Sections ceasing to exist, the new sections are yet to be established. I hope this challenge will soon be solved to the benefit of our domestic businesses. The assumption that the new sections will provide more support to Polish businesses, willing to expand into the Indian market, appears very promising. What we need to do now is wait and look forward • to a brighter future. PM
HELPING POLISH SMEs BUILD RELATIONSHIPS IN INDIA
GETINDIA is a new private enterprise focused on bringing together Polish and Indian business. The organiser is MS Global, based in the city of Poznań. MS Global Vice President Marcin Grzymisławski talks to “Polish Market” about the new B2B platform. Why do you think that a new platform is needed in addition to the existing structure of Polish-Indian economic relations built by the Chambers of Commerce and other institutions and organisations in both countries? Most of the platforms you have mentioned, unfortunately, are focusing on the large enterprises and they are not interested in cooperation with the SME sector. The goal of our project is to provide and help smaller enterprises establish business relationships in the Indian market. GETINDIA is a project that allows you to offer products and services of your company to a population of 1.3 billion people without incurring unnecessary costs and risks associated with the opening of a company in India. PM
Could you give more details about MS Global itself? MS Global Sp. z o.o. helps in the implementation of international projects and the expansion of companies to external markets which includes organisation of the infrastructure in the form of an office, sales department, recruitment of employees, etc. As of now, we are focusing on Polish-Indian cooperation, however, we plan to expand our operations to all of Asia. Our services focus on bilateral relations. We aim to assist Polish companies in their expansion to external markets and to assist the entry of foreign companies into the Polish market. Although we have operated only since 2017, we already have experience in securing employees for Polish companies in India and we are in the process of launching an Indian cosmetics manufacturer in the European market. PM
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Could you name some companies that will share their experiences related to entering the Indian market at a key B2B event you are
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organising in Warsaw? What prompted them to decide what business areas they considered the most promising? In the GETINDIA meet-up, on April 24 at the Marriott Hotel in Warsaw, the speakers will include Vice President of Solaris Bus & Coach Dariusz Michalak and Jacek Olszewski from Alvo Sp. z o.o. Solaris Bus & Coach need no introduction while the later i.e. Alvo has built several operating theatres in Indian hospitals. What prompted them to enter the Indian market and how they made it will be heard during the event which I would like to invite you to.
AS OF NOW, WE ARE FOCUSING ON POLISH-INDIAN COOPERATION, HOWEVER, WE PLAN TO EXPAND OUR OPERATIONS TO ALL OF ASIA. Your speakers will give advice to Polish entrepreneurs on how to enter the Indian market. What are the main challenges they face? Certainly, cultural differences and the work system can be a challenge for Polish companies. India is undergoing huge reforms, especially in the tax systems that even local companies can hardly keep up with. Therefore, at the GETINDIA meet-up, one of our speakers who is a lawyer and specialist in tax law and labour law at one of the largest law firms in India INDUSLAW will appear to give the gist of • the current policies and changes in the system. PM
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