-Implementation of key reforms in 2016, crucial–
– Launch of annual Business Climate Survey results –
New Delhi, January 29, 2016:The eighth Business Climate Survey shows that Swedish companies in India have a positive business sentiment in India. However, the results also suggest that 2016 will be critical for implementation of key reforms in the country. This was shared today at the Launch of the Business Climate Survey 2015.
The Business Climate Survey (BCS) is conducted annually by the Swedish Chamber of Commerce in India, along with the Embassy of Sweden in India, the Consulate General of Sweden in Mumbai and Business Sweden. The survey assesses the confidence of the Swedish business community of doing business in India,
‘‘Over the years, the BCS has become an important tool in monitoring the India experience of Swedish companies present here. The results are the sum of the joint views expressed by Swedish companies. These provide insights for future Swedish business expansion and establishments in the country,’’ said Mr Harald Sandberg, Ambassador of Sweden to India. ‘‘I am happy to note that despite a slight dampening of the sentiment this year, companies continue to invest and expand their manufacturing and operations in India.”
“There are some obstacles still needing to be overcome, principally in the areas of taxation and regulations, so 2016 will be a critical year for implementing reforms. But overall the sentiment remains positive. Swedish companies are still bullish about investing in India, on the heels of higher-than-expected market growth. And a significant upturn in the number of Swedish companies that see India as a manufacturing hub is a positive reassurance of the Government’s ‘Make in India’ initiative,” said Kandarp Singh, Chairman of the Swedish Chamber of Commerceand Managing Director Tetra Pak, South Asia Markets.
Key findings in the Business Climate Survey 2015/16:
- The Business Climate Survey captures the views of 141 Swedish companies established in India as compared to last year where 110 participated.
- Swedish companies increasingly choose to export from India as part of their global supply chain. This year, 70% of the companies state that they produce in India both for the domestic market and for exports. This is a significant shift from last year, when 30% responded that they produce for both.
- 65% plan to increase their workforce the coming year and of those, 40% will increase with more than 20% than last year.
- Almost all (>90%) of the companies in the Life Science/Med Tech/Healthcare sector reports increased market shares. 1 out of 3 companies have increased their profit margin over the last year.
- 72% of the companies perceive a favorable investment climate for the coming three years (compared to 90% in 2014/15, 51% in 2013 and 25% in 2012).
- The business community struggle with the same challenges as earlier years, related to doing business but the area of tax regulation and taxation rates is more emphasized this year.
- Import regulations and customs duties continue to be a challenge as well as bureaucracy and corruption.
- Lack of right skill set among both blue and white workers is one of the greatest challenge for companies across all sectors.
- Labor laws in India are considered as a challenge by Swedish companies. Outdated laws and local interpretation, regulations regarding contractual workers and cumbersome handling of expatriates are some of the issues mentioned, across states and sectors.
- Focus Ahead & Presence Across India – Major hubs of Swedish companies are NCR, Maharashtra and Karnataka. 90% indicate that they will focus their investments in states they are already present while 30% are looking to expand mainly into newadditions – Tamil Nadu (10 companies), Rajasthan(8) and Gujarat (6). Last year, Orissa, Gujarat, Maharashtra, West Bengal and AP/Telangana were the top states.
- SME – 21% of the companies participating in the survey are classified as SME.80% of the SMEs present in India today entered between 2005-2015.70% have between 1-20 employees in India. There are SMEs in all sectors, mainly Engineering products (40%), IT/Telecom (20%) and Consulting/Advisory/Legal (17%).Up and coming sectors for SMEs are Environmental Technology and Life Science/Med Tech/Healthcare.
About Swedish Chamber of Commerce India
The Swedish Chamber of Commerce India (SCCI) is an independent, non-profit networking organization with the mission to enable, promote and encourage Swedish companies to drive long-term, sustainable business in India.The SCCI community consists of Swedish companies from all sectors and stages of establishment in India and we provide our members with unique opportunities for continuous learning and development, platforms for leverage for the community as well as individual member companies.