"Hungary and India have agreed to strengthen co-operation in the IT sector and to explore ways to boost their bilateral trade to USD 1 billion by 2012. Hungary’s trade with India totalled USD 488 million in the January-October period of 2009."Hungary's membership to EU (in 2004) has added a significant dimension to our overall relationship. We also look forward to Hungary's Presidency of the EU in 2011 and would be happy to learn of any initiatives that Hungary proposes to take to take particularly in the economic area," said Anand Sharma, India’s Minister of Trade and Commerce, at the India-Hungary Joint Commission on Economic Co-operation in Budapest on Tuesday.
In order to explore newer areas of interest and build bilateral partnerships, a 23-member high-level business delegation led by industry body Ficci is accompanying the commerce minister. The members of the delegation include Phiroz Adi Vandrevala of TCS, Pramod Bhasin of Genpact, Anil K Mani of Apollo Hospitals Group, Harin Mehta of Sun Pharma. While some of these members are already present in Hungary, the rest are looking at opportunities for collaboration, yahoo reported.
"For now we are sizing up the problems and possibilities of Indian investors. We are on a sort of reconnaissance mission, looking for break-out points, K. K. Modi, head of Modi Enterprises, told local daily Népszabadság on Wednesday.
Modi Enterprises comprises over 100 companies and its annual turnover is around USD 2.5 billion.
Among these break-out points he mentioned the food industry that, he said, could have a future in India not only via production but also through exporting technologies.
He said the Indian companies already present in Hungary had favourable experiences, adding that the country "is still attractive for foreign investors, and it will remain so persistently if no new taxes and other measures hurting businesses are introduced."
"India is looking for a country, from where it can supply Europe with its products and also set up production capacities. Romania and Poland are also running in this race," Modi added.
Hungarian Prime Minister Gordon Bajnai said "there are substantial untapped potentials" in the relation between the two countries. He stressed, Hungary continues to encourage Indian companies to invest in the country and local enterprises to set up shop in India.
As a good example for the latter he mentioned the co-operation deal between MOL and ONGC.
Local fuels group MOL signed an oil and gas exploration agreement with India’s state-owned Oil and Natural Gas Corporation (ONGC) in May 2008. MOL took a 35% stake in the joint operations. Drilling in Himachal Pradesh is expected to start in March, yahoo cited a MOL official as saying.
The Hungarian association of IT companies and Electronics and Computer Software Export Promotion Council (ESC) of India will soon enter into a memorandum of understanding (MoU) detailing the areas of co-operation.
The two countries will soon put into effect the EUR 2 million per annum India-Hungary S&T (Science and Technology) fund for the promotion of joint research projects select bilateral S&T projects for funding.
Hungary’s trade with India has almost quadrupled over the past five years and totalled USD 488 m in Jan-Oct last year. This, however, was a decline after nearly USD 700 m recorded in 2008 that was dampened by shrinking global demand. There are currently about USD 200 m worth of Indian working capital in Hungary, primarily in the pharmaceutical sector and export-focused trade, service and tourism enterprises.
The Federation of Indian Chambers of Commerce and Industry (Ficci) signed two MoUs to promote bilateral trade and investment with ITD of Hungary and another with Hungarian Chambers of Commerce and Industry to advance international commercial arbitration. Indian industry has raised issues like visa to business people and refund of social security tax paid by IT professionals.
Should not look only to the west...
Modi said Hungary should not look exclusively to the west and glimpse only occasionally to the east.
"This is a wrong mindset," he stressed, reminding that analysts were all wrong when they said China and India could not escape the affects of global crisis either.
"Economies producing for a massive domestic market did not even feel it was a crisis. They grew 6-8% a year. And this is where we get to the key question: will Hungary devote itself to the stagnating West or it really opens towards the dynamically growing East," Modi said.
"Hungary’s geographical position could make it a distribution centre for Asian products to Europe, a kind of a trade gate to the West. India could also become a key market for Hungarian goods and the annual two-way trade volume of USD 600-800 m could multiply," he added.
Hungary would also profit from this, as there is a serious demand for the country’s agricultural products, machineries, chemical goods and pharmaceutical products in India, Modi noted.
When Hungary has made up its mind which way it will go, it will need to lower its very high unemployment rate (10.5% currently) and make efforts to have more high-skilled employees."
Source: Portfolio Online Financial Journal
04.02.2010