Modi's economic reforms boost Swedish companies' confidence in India

New Delhi, Jan 16: Recent reforms and economic initiatives undertaken by the government has increased the confidence of Swedish companies in doing business in India, an industry survey showed Friday.

"This shift in perception can be largely attributed to the initiatives undertaken in India to provide a stable and predictable business environment," said Harald Sandberg, ambassador of Sweden to India.

"What would further enhance the prospects of Sweden 'making in India', will be some regulatory changes that provide more of a level playing field."

According to the seventh business climate survey released here, there has been a major positive shift in the perception of Swedish companies towards investing and expanding their manufacturing and operations in India.

The survey findings conducted annually by the Swedish Chamber of Commerce in India (SCCI) revealed that 90 percent of the companies have assessed the business and investment climate more favourable as compared to 51 per cent in 2013.

"It is encouraging to see that three out of four companies have increased their investments in 2014 regardless of the negative outlook in the earlier years. Going forward I think we will see the footprint of the Swedish business community increase further," said Kandarp Singh, managing director, South Asia markets, Tetra Pack and chairman of SCCI.

"The type of business we represent; sustainable, innovative and with a long-term perspective, is what is needed in India today."

The survey revealed that 60 per cent of the the respondents reported an increased market share especially within the retail of consumer goods and healthcare.

"About 40 percent of the companies report increasing operating margin and 73 percent give a positive and increased revenue forecast. Despite the weakening sentiment in 2013, almost three out of four companies have invested especially into manufacturing, product development and research and development (R&D) and eight out of ten are planning to invest further during the next three years," the survey report said.

In terms of challenges, the survey pointed that a majority of Swedish companies continue to identify tax regulations and rates, import and custom duties to be the most significant challenges in doing business in India.

Another major challenge cited by the companies is bureaucracy which is perceived as cumbersome and time-consuming. Corruption remains a major issue, hampering business development. Unavailability of skilled labour and increasing salaries are challenges related to the workforce.

Currently, the Swedish business community generates about 150,000 direct jobs and more than 600,000 indirect employment in India. Major hubs of Swedish firms are located in the national capital region (NCR), Bengaluru, Pune and Mumbai.

The annual survey was conducted in partnership with the Sweden embassy in New Delhi and the Swedish consulate general in Mumbai.

IANS