Poland’s promise for investors from India
A Polish trade expert weighs up the various factors and initiatives providing a boost to investment cooperation between Poland and India.
In 2016, the Polish government deemed India as one of Poland’s topmost prospective export markets. Being fully aware of India’s potential, Polish Investment and Trade Agency (PAIH) has decided to launch one of its Foreign Trade Offices in Mumbai, in the second half of 2018. This decision aims to strengthen the economic relations between two countries and allows Indian entrepreneurs to discover what Poland has to offer.
More investment cooperation and more support programs, such as Go India, have been already implemented by the Polish government over the course of last two years to boost bilateral economic ties. Regarding that, 13 out of 15 major Polish export destinations included European Union member states. In the last two years, however, the Polish authorities revised the approach to international trade towards diversification of international trade. This change could definitely be considered as a new chapter in the Polish-Indian economic relations.
As a trading partner for India, Poland represents an indefinite business potential. It is the sixth most populous European Union country and the largest trade partner and export destination in the Central European region. EY’s European Attractiveness Survey from 2017 named Poland “the investment magnet” of the EU region due to its strategic location, well-established fundamentals of a free market economy, a system of effective public incentives and mature services market. Additionally, the research conducted in 2017 by Polish Investment and Trade Agency (PAIH) in cooperation with Grant Thornton and HSBC indicates that 92 per cent of foreign investors are glad they entered the Polish market and would do so again. Since Poland’s economy is stable, the world’s largest credit rating agencies have upgraded their forecasts in terms of the Polish GDP growth in 2018.
Moreover, Poland is the only country in Europe which did not get affected by the global financial crisis in 2008 and avoided the recession that gripped many European Union member-states. Poland could draw even more foreign investments, as it has a great allocation of the EU funds, especially in order to develop IT projects.
Even though Poland is more expensive than India, it still remains cheaper than most of the western European countries, while the quality of services remains equal, or in certain cases, such as banking sector – even higher. Furthermore, due to its central location, Poland is often considered a natural trade partner for international companies and a gateway towards the rest of the continent.
According to the Polish Agency for Enterprise Development (PARP), there are over 1.9 million companies operating in Poland, the vast majority of which are micro, small and medium companies (99.8 per cent). The share of SMEs in generating GDP in recent years has been steadily growing and according to the latest available data exceeded 50 per cent. As a result of the economic growth, Polish entrepreneurs are constantly looking for new partners beyond their closest European neighbourhood. There are several especially prospective sectors for economic cooperation between Poland and India: energy and mining, ICT, BPO services, food processing know-how and machinery, agriculture equipment, health industry, (medical equipment in particular), and furniture industry.
Indian investments in Poland are valued at over $3 billion and include companies such as ArcelorMittal, Videocon, Escorts, Strides Arcolab, Reliance Industries, Ranbaxy, Essel Propack, KPIT Cummins, Zensar Technologies Ltd, Tata Consultancy Services, HCL Technologies Ltd, Infosys and Wipro, Jindal Stainless, Berger Paints India, UFLEX and Glenmark Pharmaceuticals, Rishab Instruments (acquired Lumel) and CRISIL. Polish companies that operate in India include Toruńskie Zaklady Materialow Opatrunkowych (TZMO) in Dindigul (manufacturing hygiene and sanitary products), Can-Pack Poland in Aurangabad (manufacturing metal packaging), Geofizyka Torun, Famur Group, Solaris (eco buses) and Ekolog (waste to energy). Total Polish investment is about $600 million.
Furthermore, both countries are seeking to work closer together especially in the field of eco-friendly mining technologies and the use of coal in industry and power generation. Mining has been named by Grzegorz Tobiszowski, the Polish secretary of state in the Ministry of Energy, as one of the main fields of Polish-Indian cooperation. India is also keen on developing its mining industry, and Poland offers excellent technology, machinery and experts.
Regarding the business potential in India, PAIH will be launching its trade office in Mumbai in the second half of 2018. The Agency is the main institution responsible for promotion and facilitation of foreign investment and the Polish exports. “We are creating a comprehensive support system for the Polish exports. Establishing the Foreign Trade Offices is one of the most crucial elements of the Agency’s new strategy”, Wojciech Fedko, deputy president of PAIH responsible for exports support, says. “The offices will be operating in the countries where Polish companies have been already active as well as in the ones with the biggest business opportunities for our entrepreneurs.” Mumbai-based trade office is to provide Polish exporters and investors who look for new business opportunities in India with support and will attract Indian investors into the Polish market. The office will also offer consultancy and practical tips within the Go India governmental project. The Mumbai-based PAIH trade office will be not only an information centre, but a proactive consulting partner helping Polish companies to take first steps into the Indian market.
With such activities already taking place, and more to come in the pipeline, the future holds great prospects for a long-term fruitful Polish-Indian collaboration.
Ada Dyndo is the head of Mumbai-based trade office of the Polish Investment and Trade Agency and a PhD candidate in Political Science at University of Warsaw.