India-Slovakia relations are friendly and the two countries have supported each other in international fora. Slovakia supports permanent membership for India in United Nations Security Council and also wider international integration of India in regimes of non-proliferation and the civilian use of nuclear energy. However, the bilateral trade statistics are still lagging behind its potential. THE BLUE MOON Editor Amit Mittal spoke to the Ambassador of Slovak Republic, Mr. Zigmund Bertok, to know more about the reasons of the slow trade and slow investments. Some excerpts of the interview in New Delhi.
The bilateral trade statistics from 2011 to first quarter of 2015 indicate that the trade has been hovering around 260 plus million Euro which is not very encouraging, what do you think are the reasons for this feeble trade?
During the time of Czechoslovakia the main trade with Indian companies was managed through Prague which is the Capital of the Czech Republic now. After Slovak and Czech Republic became separate independent nations, Slovak Republic was largely dependent on defence industry. There were heavy machinery factories in Slovakia. Earlier, 95 per cent of the trade of Czechoslovakia was with the former Soviet Union. And it also needs to be mentioned that the trade between Czechoslovakia and India was done through inter-governmental planning. After becoming a separate country Slovakia changed from a state-owned economy to a private one. Being a landlocked country there were many difficulties that we had to face initially. But our industry took up the challenge and it concentrated on car production business. From the statistical point of view Slovakia today stands in the first place in terms of personal car production. A population of 5.5 million produces 1.1 million personal vehicles. The car manufacturing industry has been producing a SUV from Volkswagen, Porsche, Bentley, Peugeot, Citroen and Kia. The industry contributes 50 per cent of the GDP of the country. Slovakia is very successful in Europe and China in this regard.
Electronics manufacturing is another industry which contributes largely to the economic growth. Japanese, Koreans, Taiwanese and Chinese companies have these productions in Slovakia. Among the largest is the Samsung Electronics, which produces its LCD screens in Slovakia.Slovakia is also very advanced in the production of heavy machinery.
Among other new areas of cooperation, we have one MoU signed with the Bureau of Indian Standards (BIS) on technical specifications signed this year. We are traditional partners of India. With our Visegrad partners we can commonly offer many things. Some European companies are now bringing Indian staff in Slovakia. Indian skills are raising huge interest in the industry.
As you mentioned just now about production of German, French and Korean cars being produced in Slovakia, why are there no names from India. There seems to be complete absence of Indian investors in Slovakia. What is the reason?
Indian investments are now gradually coming to Slovakia with a huge contribution by Tata in the automotive sector. Recently the fresh investment of the Jaguar Land Rover has been finalized, bringing the largest Indian-owned personal car plant in Europe. Similarly Apollo is still negotiating investing in Slovakia as we produce heavy machinery for production of tyres.
From the Slovak end, we have signed an MoU for cooperation with Indian Ministry of Railways which opens large area for cooperation, including producing coaches for trains, and modernisation of rail systems, including software and hardware. We will bring know-how to India and this way support the Indian government initiative of ‘Make in India’ too.
Are there any obstacles in faster investments from the Indian or Slovak side?
The problematic recognition of the existing Avoidance of Double Taxation Agreement was a legal obstacle between the two, but now the issue has been solved in March this year. Slovak economy offers many advantages, as it belong to the most open economies in the world. Unfortunately, from the Indian side, the economic reforms and liberalization of its market do not progress as fast as desired by the European companies. Among the other advantages of the Slovak economy, besides being part of the EU common market and Euro currency is highly qualified workforce with good technical education. The location of Slovak Republic, though landlocked, is very central, lying on the crossroads between the EU and its Eastern partnership, as well as on the North-South transport corridor. In addition to road and air transport, we also have water transport movement, notably the Danube river, one of the largest European rivers.
The eighth session of India-Slovakia Joint Economic Committee was held in New Delhi in February, was there some positive outcome especially in terms of cooperation in automotive, energy and tourism sectors?
We had a business delegation in February of about 20 members which also had representatives of ministries. Together with the Czech Republic, Hungary and Poland, we commonly organised tourism road shows in different cities of India starting with Delhi, Bengaluru and Mumbai later. The Slovak Tourism Promotion Agency was instrumental in the shows.
You mentioned doing the road shows with three other European neighbours…?
Yes, four of us together – Poland, Czech Republic, Hungary and Slovak Republic – are members of the Visegrad group. Since all four countries are closely related and have common history, we cooperate together on such subjects. Talking about similarities in culture, almost each village in Slovakia has a castle or another heritage building. We have many attractions for tourists like hot water springs and spas, sport and mountain activities, as well as modern hotels and shopping malls.
We have heard of wines from the region, does Slovakia also produce wines? If yes, why are they not exported to India?
We do have high quality wine production, which is considered among the best in Europe. The problems here are particularly the import taxes in India which are too high. Such duties are a barrier in trade. This is also a hurdle in India’s Free Trade Agreement with the European Union. This is being negotiated now.
Does Slovakia have nuclear reactors for energy and does it support nuclear power plants?
We do support clean energy through nuclear reactors. At present we have two functional nuclear power plants. We have initialized the preparation of a new agreement on cooperation in the area of nuclear energy between the Slovak National Nuclear Control Agency UJD and the Indian Atomic Energy Commission – DAE.
We also favour renewable sources of energy, from which we now generate around 10 % of electricity, with the aim to reach 14 % by 2020. The potential is much higher, reaching more than 30 000 GWh/year.