SWEDEN MAKING BUSINESS IN INDIA; SME COMPANIES BRINGING CUTTING EDGE TECHNOLOGY

  

Walking down snow swept streets of Stockholm,If you enquire with any swanky trade center about India- Sweden Companies’ mutual  trade, vaulting Truecaller operations is the instant reply.     

There is not an iota of doubt in this truth, But it   is  also equally true that Swedish companies are increasing investment rate in India.Many of them eye on the MSMEs. Swedish companies have made their footprint known in India with strong brands and stake holders feel the cooperation is bound to increase further.

In the city of Skype  origin, where This visiting journalist was busy chatting back home on Skype with high end pictures on the laptop, talks of successful start-ups can be heard anywhere, but many locals evince keen interest in the emerging start up ecosystem in India too.  They lace their claims with mega success stories of Truecaller and Skype’s  growing  popularity  in India.

Many such companies envision that they can make big inroads in India in the wake of huge population’s leaping ambitions for quality life – better healthcare, exact weather forecasting, abridging of digital divide etc. 

  Though the internationally famous TrueCaller is Sweden based company , the application has its largest users in India.

  

India is the most attractive destination for its founders- Alan and Nami, who had found much to their surprise that more than half its users, more than 25 million out of its international clientele of more than 45 million Users across the globe are in India. The figures might have multiplied by this time.

Right from the true caller inception, its promoters riveted their eyes on  India because of Its market size and tremendous scope for the growth. The vast market size and faith of early adopters did not disappoint them, and today, The company takes pride in highlighting India as the biggest market for their application.  

The service is a global telephone directory and reverse directory that has caller ID, social media integration and call blocking functionality .  It uses crowdsourced data ,which enables it to work even in countries like UK and India where public data is not available. 

 Sweden has a long history of investment In India; both Ericsson and Swedish match established presence in India in early 20^th century. Today , there are numerous multinational companies established such as ABB, Astra Zeneca,Atlas Copco, Ericsson, Sandvik , Scania, SKF, Tetra

 Pok  and Volvo trucks and buses . Many of these units have invested in manufacturing and research development, distribution and service centers in India.

  A latest survey – “Sweden Makes Business in India” says Indian export of services like information technology to Sweden is strong. With about 20 Indian IT companies operating in the country.

 The inflow of Swedish direct investments to India has fluctuated over the years. Accumulated Swedish FDI assets in 2014  totalled  SEK 15 billion, which is a substantial increase from SEK 11 billion the year before.

In the last 10 years, several SME companies have found their way to India, bringing cutting edge technology with them in sectors such as healthcare, environment technology and engineering products.

Informatively, IKEA and H&M were among the first companies to be approved as a foreign investor under the new single brand retail legislation. H& M opened up their first stores in Delhi two years ago and IKEA will open up stores in India soon.

This correspondent who recently visited the city of Nobel prizes fame, Stockholm, found that many quoting India’s Nobel laureate for peace -2014  Kailash Satyarthi  who had said,” India may be a land of over a 100 problems ,but it is also a place for a billion solutions.,”

Trade of goods between Sweden and India amounted to more than 2billion USD in 2014 .  Exports of goods from Sweden accounted for two thirds of that amount. An estimate found that during the first nine months of CY2015, Swedish exports of goods to India grew with seven per cent compared to the same period in 2014, while Indian exports to Sweden increased with 11 per cent.

As many as 160 Swedish  companies are currently established in India These companies are present in various sectors. Sweden and India had concluded a treaty for the avoidance of double taxation and prevention of tax evasion in 1997, which was amended on October 1, 2013. Sweden and India enjoy a bilateral investment treaty for the promotion and protection of investments since 2000.

 India is a member of the World Trade Organization (WTO) since 1995 and is therefore party to agreements within the WTO framework. Since 2007 the EU and India are engaged in negotiations of a free trade agreement.

Swedeish companies invested in different business areas in 2015 ,reflecting the belief that  in India‘s growth potential and this potential can only be achieved with highly skilled team in place.

In Marketing and sales-54 per cent invested and 63 per cent companies  plan to invest.SME companies specially indicate that they will focus more on marketing and sales in the coming years.

Thirty Four companies invested in the skill development and Thirty eight per cent plan to invest.  many companies  especially in the automotive/heavy vehicles sector invested  in Skills development and training in 2014 .  Companies in all sectors plan to focus more on skill development and training in coming years.

Thirty one per cent companies invested in services sector and 45 per cent plan to invest.  IT/ Telecom and automotive/heavy vehicles are the main sector indicating they will invest in services.

Almost all companies in the life sciences/healthcare sector observe an increase in market share followed by half of the companies that are into engineering  products ( 52 per cent)and Automotive/heavy vehicles ( 50 percent).  Companies believe India continues to be a competitive market from a cost of view.  

Almost 90 per-cent perceive that the cost advantage is the same or even  better than last year (2014 ),cost of material / component and availability of workers are the key factors cited by the companies  giving India the competitive edge.

One third of companies-141 companies- that participated in the survey manufacture in India. Eighty per cent of  them  invested  in existing or new production units .

 Seventy   per cent of all manufacturing companies produce in India both for the domestic market and for export. Informatively, Tetra Pak’s  manufacturing plant in Chakan ,Pune has been recognized as the groups’ best performing factory in the world. they have 37 performing companies globally .they make safe and hygienically packaged milk and beverage products available to the Indian consumers. 

Swedish companies In India directly employ more than 1, 60,000 people and another 1,100,000 indirectly. The Sandvik family has 3,000 members in  India today.  As a world leader in tooling materials technology ,mining and construction. The company is committed to enhance customer productivity , profitability  and safety. Sandvik established operations in Pune in 1960 as one of the first Swedish companies to set up a manufacturing unit in the country.

Lack of right skill set continues to be biggest issue faced by companies across all sectors regarding blue collar workers but this is also one of the top issues for white collars .The companies are active in seeking to close this gap and invest in skills development and training.

with the challenge of low retention and coupled with this, increased labour  cost, Swedish companies face challenges in India that are very different from home.

More than one third of the companies point out trust and business ethics as one of the top challenges that they are facing in India.

Labour laws  are considered as a challenges by Swedish companies. Outdated laws and local interpretation, regulation regarding contractual workers and cumbersome handling of expatriates are some of the issues that ail them.

In 2015,Scania,opened up its second production unit outside Banglaore  producing trucks and buses. they also initiated a biogas project in Nagpur converting local waste to  local fuel for local transport and are running the country’s first Green Bus on Ethanol.Scaina  is pioneer of sustainable Transport  solutions for the Indian market.

 There has been an influx of Swedish SMEs the last decade. Almost 8 out of 10 companies present in India entered between 2000-2015 . Seventy per cent have between 1-20 employees in India.

The SME companies are  present in many sectors ,mainly engineering  products , IT/ telecom ( 20 per cent) and consulting / advisory /legal (17 per cent ) and coming sectors for SMEs are environmental Technology and Life science/med tech and health care.

One out five of the companies participating  in the survey were classified as Small and Medium  seized  Enterprises ,as per EU definition  The survey said obstacles faced by SMES are issues with taxation interaction with authorities and banks, permits/permissions and import regulations . SMEs encounter more problems with corruption than Large companies.

The survey found that that the current business climate as favorable,

Swedish companies are present in all states   through marketing and sales offices, research and development ,manufacturing ,distribution and service centers .One out three companies are looking to expand into new states in the coming years.

The top three states of interest are Tamil Nadu and Rajasthan because cause they are seen as strategic locations for sales. Gujarat for good infrastructure and access to skilled  labour.

Companies in Fashion and Lifestyle, and Life science/ Med Tech/Healthcare sectors are especially looking to expand beyond the operations into new states.

Thrity three of the Swedish companies have their headquarters in Maharashtra. Atlas Copco has four manufacturing units in Pune, Nashik and Hyderabad ,and 22 offices across India. company services customers with innovative compressors, vaccum solutions and air treatment systems, construction and mining  equipment, power tools and assembly systems.

 With the Swedish  business coming to India, Handelsbanken and SEB, two leading banks in Sweden have also set up offices here  to  provide their clients across India with advisory services  and quality products.

The Business Climate survey (BCS) is conducted annually  by  The Swedish Chamber of Commerce  India in partnership with Embassy  of Sweden in New Delhi. This was the latest survey which came in 2016 –a few months back.

Many Companies visualise  huge potential in populous India. Like,

 ifoodbag is the Swedish newcomer in the packaging industry who developed the unique paper carrier bag with the same name.The company was set up in 2013 with a vision of a more sustainable society through offering consumers and businesses cost-effective, environmentally-friendly and robust packaging solutions that have chilling and freezing functionality for up to 24 hours.

In India, where Polio vaccine programme, is great success ,such bags can be very handy to carry vaccines and likewise food items. A Top Executive of the company Robert Grenmark , executive Vice President of Global sales at ifoodbag showing the bag told this journalist.

The Swedish companies are hitting the international markets. may it be a game on  phone,music online or video-phoning ,they are there.  Skype became Stockholm’s first unicorn when it was bought by eBay for $2.6bn in 2005 – just two years after it launched – and has since been followed by Spotify, Candy Crush parent King, Minecraft maker Mojang and the payments service Klarna.

Stockholm is turning into  hub of  technology,” Skype creator Niklas Zennström, who also founded London-based Atomico, is quoted by media .

CEO of Ignitia Liisa Petrykowska Li says there  are lots of types of data that Ignitia, a weather forecasting startup,could have focused on. But, after talking with farmers in West Africa, it is realized only one question really matters to its customers: "Will it rain?".They don't care about temperature or wind, or about daylight hours or soil moisture,".

 Ignitia takes satellite data and, working with telecom providers, sends out localized forecasts via text message (say, "rain this morning, dry tomorrow"). The company claims a high accuracy rate of 84% and a forecast range of up to five miles.

In its first of operation last year, Ignitia signed up 80,000 farmers in Ghana and sent out more than 10 million forecasts. It now wants to expand into West Africa using a $2.5 million grant from the "Securing Water for Food" challenge funded by the governments of the United States, Sweden, South Africa, and the Netherlands.

The company proved its model in Ghana, and it plans to expand in the region next. Eventually, its goal is to bring its system to other parts of Africa, India, and South America.

 The Company sees a huge potential in India , agrarian based economy where farmers need the data on their traditional mobiles through sms ,

Likewise,Johan Jorgensen, Interim Project Chairman/Project Leader of

Internet of food—where food and internet meet-- said development and advancement of the food sector is essential for feeding an ever- growing population on Earth. Food production, sustainability, and distribution issues are part of various international agendas, including in economic development, security, and human welfare, to name a few.

 Furthermore, global population trends towards urbanization are spurring questions about the challenges and opportunities of feeding high-density communities. Internet technology can play a role in the advancement of food issues, helping the food sector to develop in a sustainable way, producing healthy and appealing food for a growing global population.

While the food sector is the largest single industry on the planet, encompassing roughly 10% of global GDP, it has yet to advance in many areas important to being a successful sector for the future. This includes transparency, quality control, and knowledge dissemination. The food sector is furthermore one of the few large sectors remaining that have not been transformed through the influx of new technology, in particular the Internet, and thus structural dynamics is not present to the extent as in other sectors.

Such companies and campaigns will also hit the Indian market in coming future as the world is fast changing into a global village and India, one of the leaders in IT technologies, can’t afford to lose any opportunity to improve quality of life.

( This Article has been published in Laghu Udyog Samachar,a publication of MSME ministry, India in March,2017 issue )