India-Spain economic and commercial relations
- India-Spain bilateral trade in the year 2013 stood at USD 4.76 billion (Exports from India: USD 3.22 billion; Imports from Spain: USD 1.49 billion). Bilateral Trade between India and Spain from January to June, 2014 stood at USD 2.56 billion; Spain's exports to India during the first half of 2014 were at USD 795 million while India's exports to Spain stood at USD 1,762 million. There has been an increase of 5.6% in the bilateral trade during the first half of 2014 as compared with the same period in 2014.
- Spain is the 13th largest investor in India with total FDI at $885 million*. The main investments are in the sectors such as infrastructure, renewable energy, auto components, water desalination/purification and single brand retail. A total of 300 Spanish companies have subsidiaries, joint ventures, projects or liaison offices and purchase offices in India. There are about 30 Indian companies in Spain in the fields of IT, automobiles, pharmaceuticals and road maintenance. The total Indian investment in Spain is at $1.108billion*
- Potential areas of interest for Spanish companies in India are infrastructure (roads, airports, ports, railways), energy (renewable and non-renewable), technology in agriculture, food processing, water desalination/purification, city waste management and tourism there is a huge potential for cooperation from Spain to India. Similarly, for the Indian companies, there is a huge potential for cooperation in the areas of pharmaceuticals (generic medicines) and IT
* (Source: Spanish Ministry of Trade and Competitiveness; 1 Euro= 1.36$)
Potential areas for bilateral collaboration
- Besides expansion of trade, the following sectors have potential for business development and collaboration:
- Infrastructure -Construction and maintenance of roads, airports, ports, commercial complexes: Many large and SME Spanish companies have know-how, expertise and high quality equipment. Over 15 Spanish construction companies figure among the top 200 global firms in this sector. Since the Spanish market is saturated, these firms are increasingly on the lookout for markets abroad, particularly in Latin America, Asia, the Gulf and Africa. A few of them are already in India.
- Railways: Spain has well developed MRT, rail network and 2800 km of high-speed rail (speeds of over 300 km/hour). Spain has expertise in construction, signalling, safety (anti-collusion system), 200-220 km speed locomotives, track-interchange techniques and management capability. Recently Spain got a contract for supply of six coaches to Kolkata metro.
- Energy: Spain is among world leaders in solar thermal and wind energy technology. Major Spanish companies in this field such as Acciona and Gamesa are already in India. Spain's Gas Natural Fenosa a leading multinational in the gas/electricity sector has signed a Euro 1 billion deal in 2012 with GAIL India to supply approximately 3 billion cubic meters of Liquefied Natural Gas (LNG) to India spread over the next three years. Recently the Avantha Group (Crompton Greaves) has bought a Basque company ZIV for Euro 150 million to incorporate its expertise in smart power grid systems.
- Spain has knowhow in biotechnology, agriculture, aquaculture, dairy products and greenhouse farming. Spain has a well-developed food processing industry. Spain exports large quantities of vegetables, fruits and juices to the EU and is an importer of marine products. They also have firms such as Eroski-Caprabo and Mercadona which are producers as well as mid-size retail chains. Spanish companies have expertise in the entire value chain from green house farming /aquaculture to retail trade and are being encouraged to set up agro-industrial parks, cold storage facilities, as well as food processing and packaging units.
- Machine tools, automotive components, textile machinery, biodegradable plastic- are other areas in which business could develop. A few Spanish automotive components and machine tools companies already operate in India. Recently, on 17 June, 2013 Spain's CIE Automotive S.A and India's Mahindra & Mahindra Ltd entered into a strategic partnership wherein Mahindra has agreed to acquire 13.5 percent stake in CIE for 94.24 million euros. By this partnership agreement Mahindra Forgings will be renamed Mahindra CIE Automotive in which Spanish auto components maker CIE will hold 51 percent stake and Mahindra will own about 20 percent stake. It is expected that Mahindra CIE Automotive will become one of the top 25 global auto component suppliers in the world with annual sales of about USD 3 billion.
- Spain has technology in water desalination/purification and city waste management. One major Spanish company (ABENGOA) is already involved in India in water desalination. They have a major project in Chennai as partner of the Chennai Municipal Corporation. There is potential for collaboration in this field.
- There is scope for exploitation of IT software opportunities in Spain in the banking and telecom sectors. Local skill availability is reasonably good. TCS and Infosys have small operations in Spain and NIIT has recently bought a Spanish company called PROJECTA to add value to its IT effort. Indian IT professionals need to acquire Spanish language skills to fully exploit the potential in this market and in Latin America.
- Generic medicine is one sector which might open up an opportunity for India in Spain. However, existing procedures for registration of medicines and approval of reference price are complicated and takes up to 2 years. Authorities and the public at large are brand and quality conscious. Any generic medicine will only pass muster if it has an exact molecular value to that of the corresponding branded product.
- There is also potential in the Tourism and hospitality industry including budget hotel chains.
India-Spain Joint Economic Commission
- In order to give an impetus to trade and investment relations, India-Spain Joint Economic Commission (JEC) was set up under the 1972 Trade and Economic Cooperation Agreement, and has since met nine times. The 9th Session of the JEC was held in Madrid on 21st June 2010. Mr Anand Sharma, Minister of Commerce and Industry from the Indian side and Mr. Miguel Sebastian, the then Minister for Industry, Tourism and Trade of Spain co-chaired the meetings.
- Joint Business Council (JBC) JBC was set up under 1983 Agreement between FICCI and the Spanish High Council of Chambers of Commerce (Consejo Superior). The first meeting was held in December 1984. The JBC meetings coincide with the Joint Commission for Economic Cooperation. The last JEC was held on the sidelines of the 9th JEC in Madrid on 20-21 June, 2010.
- Confederation of Indian Industry (CII) has MoUs with ICEX (Spanish Institute for Foreign Trade), AENTEC (Spanish Association for New Technologies) and CEOE (Spanish Confederation of Business Organizations) for promoting bilateral economic and technical cooperation. ACMA (Indian Auto Components Manufacturers Association) has an agreement with its counterpart SERNAUTO. EXIM Bank also has an information sharing MoU with COFIDES (Spanish Company for Development Finance). PHD Chamber signed MoU with Madrid Chamber of Commerce and Industry in February 2001. Recently in June, 2013, FICCI signed cooperation MOU with CEOE.
- Indian organizations like the Indian Trade Promotion Organization (ITPO), Council for Leather Exports (CLE), Apparel Export Promotion Organization (AEPC), Carpet Export Promotion Council (CEPC), and Electronics and Computer Software Export Promotion Council (ESC) have been actively participating and promoting Indian products in various trade fairs and exhibitions in Spain. They have also had B2B meetings with various Spanish companies to explore possibilities of co-operation. Recent High Level Exchanges
- Minister for Road Transport and Highways Dr. C. P. Joshi, accompanied by a delegation paid an official visit to Spain from 26-28 May, 2011. Both sides discussed issues of bilateral cooperation in the roads sector including construction, transfer of technology and know-how, use of information technology in the roads sector, toll collection, road safety and reduction of accidents, and use of environment-friendly material for construction of roads.
- A 42 -member delegation of the Empowered Committee of State Finance Ministers visited Madrid from 10-13 September, 2011. Apart from comprising Ministers and senior officers from nineteen states, the Committee included the Chief Minister of Assam, Shri. Tarun Gogoi, the Deputy CM of Bihar, Shri. Sushil Modi and the Deputy CM of Jharkhand, Shri. Hemant Soren. The purpose of the visit was to understand the Spanish system of VAT as well as their controls and checks over tax evasions.
- Shri Kapil Sibal, Minister of Communications and IT visited Barcelona recently to participate at the GSMA World Mobile Congress held on 27-29 February 2012. He was one of the keynote speakers at the Leadership Summit Session. Shri Sibal gave a separate presentation to a select group of 100 persons from the world telecom community where he underscored the opportunities in the education, health and S&T sectors which would impact India and the rest of the world. As a special gesture, Spanish Crown Prince Felipe met Shri Sibal at the Vodafone stall. Shri Sibal also met the Cataluña Chief Minister Artur Mas and had productive discussions to expand bilateral trade and investment ties.
- Mr. Patxi López, the then President of the Basque Country led a big 80-member business delegation to India from 19-25 March 2012. The delegation visited Delhi, Bangalore, Pune and Mumbai. The Basque President gave a keynote speech during the sixth India-Spain Tribune Meeting held in New Delhi on 21 March, 2012. He held separate meetings with Dr. Farooq Abdullah, Minister of New and Renewable Energy, Shri Vilasrao Deshmukh, Minister of Science and Technology, Shri Kamal Nath, Minister of Urban Development and Shri Prithviraj Chavan, Chief Minister of Maharashtra.
- Dr. K. Chiranjeevi, MOS (IC), Tourism visited Spain from 29 January to 3 February, 2013. He inaugurated the India Pavilion in Tourism Fair FITUR-2013 and held bilateral meetings with the Spanish Minister of Tourism Mr. Jose Manuel Soria Lopez. He also met Mr. Artur Mas, Catalonia President in Barcelona. Discussions focused on prospects of bilateral cooperation in the field of tourism and tourism infrastructure.
- Shri. Paramvir Singh, Minister of Agriculture of Haryana led a delegation from the state government to Madrid from 2-4 October 2012 as part of an official tour to study the European Fruit and Vegetable Markets. The Haryana Government proposes to set up an International Horticulture Market at Ganaur. The delegation visited the Mercamadrid International wholesale market near Madrid and interacted with its management.
- Shri Ganesh B. Pradhan, Secretary, Ministry of New and Renewable Energy visited Spain from 15-18 April 2012. He visited the solar power plants in Seville and Granada. He met Mr. Jaime Suarez Perez-Lucas, Director General for Energy Policy and Mines and discussed bilateral cooperation in the field of renewable energy.
- Shri R.H. Khwaja, Secretary, Ministry of Tourism visited Spain from 11-13 June 2012 to participate in the 93rd Session of the UNWTO Executive Council Meeting. During the visit he also held a meeting with Ms. Isabel Borrego Cortés, Spanish Secretary of State for Tourism and discussed matters related to bilateral cooperation in the field of tourism and tourism infrastructure.
- Shri. S.R Rao, Commerce Secretary attended the CPhI Worldwide pharmaceutical exhibition held in Madrid from 9-11 October 2012 at IFEMA exhibition grounds. India was the focus country. Indian participation was jointly organized by Pharmexcil and India Brand Equity Foundation (IBEF) with full support of Ministry of Commerce and Industry. Around 120 Indian pharmaceutical companies participated in the fair. A business seminar on the theme “Generics from India: Quality and Affordability” was organized on 10 October, 2012. During the visit Commerce Secretary also held a meeting with Mr. Gonzalo de Benito, Spanish Secretary of State of Foreign Affairs. Discussions focused on various aspects of India-Spain Economic and Commercial relations.
- Shri. Rahul Khullar, Chairman TRAI led the Indian delegation at the GSMA World Mobile Congress held in Barcelona from 25-28, February, 2013.
- The Department of Biotechnology (DBT) has an ongoing programme of cooperation with the Centre for the development of Industrial Technology (CDTI), Spain. A Programme of Cooperation for Technological cooperation was signed between the two bodies in November, 2011 to promote and fund innovation-driven research and technology development as well as to encourage partnerships and business led R &D collaborative projects in the field of biotechnology. Under this programme DBT and CDTI have successfully concluded one round of call for proposals and have announced second call for proposals. A 17- member delegation comprising of officials of DBT, representatives of Academia, Industry and FICCI visited Madrid and Barcelona from May 20-22, 2013. The delegations had useful interactions with their Spanish counterparts and visited state of the art Spanish biotech centers and facilities.
- Shri Rajeev Kher, Commerce Secretary to Government of India visited Madrid during 12th – 13th of May, 2014 at the invitation of Spanish Secretary of State for Trade at the Spain Mr. Jaime Garcia Legaz Ponce. Several issues of bilateral commercial importance were discussed including cooperation in the sectors of renewable energy, generic medicine etc. Commerce Secretary also addressed and interacted with the Spanish businessmen in a business forum jointly organized by CEOE and FICCI.