Europe might still be reeling under financial stress, but Indian companies think the business prospects in the region would improve in a couple of years, according to a Federation of Indian Chambers of Commerce and industry (Ficci) survey.
Despite the gloomy economic scenario in Greece, Spain, Italy and France, Indian companies for the first time in three years have overwhelmingly expressed confidence while engaging with the region commercially, the survey titled ‘Is the worst phase over for Indian companies doing business in Europe?’, noted.
Last year, 75 per cent of companies had responded that the ongoing crisis had resulted in their business prospects in the region being adversely impacted. This year, however, a little over 50 per cent noted that even when the markets slowed, they were able to register growth in their product category.
Half the surveyed companies expected the current economic situation to improve over the next two years. About 30 per cent expressed optimism that the economic situation in the European Union (EU) would begin to look up in a year. To keep their balance sheets stable, 50 per cent of the companies surveyed had already begun to diversify their markets within Europe. Last year, 40 per cent of these companies initiated efforts to make inroads into the Central and East European markets.
Interestingly, nearly 60 per cent of these firms are primarily focusing on greener pastures in African countries, West Asia, South Asia and even in North America.
About 20 per cent of respondents pointed out that instead of facilitating foreign investments and businesses during the current economic turmoil, the respective European governments had made the processes more stringent in obtaining and renewing long-term visas, work permits, family and dependent visas and overall ease of doing business.
About 10 per cent suggested that the Indian government could favourably look at providing subsidies and lower duties for promoting India-EU trade. To maximise their benefits and to alleviate business losses in terms of reduced demands in European markets, Indian manufacturers are aggressively pursuing new business plans. These include increased imports of high-end machinery and technology from Europe, due to highly competitive prices being offered by European exporters.
