Economic and Commercial Cooperation

Before 1990, trade was conducted based on annual trade protocols and rupee clearing system by state trading organisations

new Trade Agreement came into effect from 1 January 1990, providing for trade in convertible currency and mutual extension of MFN status

Both countries are members of WTO

Since 1st May 2004 Poland is the Member State of the European Union

On 19th May, 2006 in Warsaw Minister K. Nath and Minister P. Wozniak signed the Agreement on Economic Cooperation

statistics 2001 2005

2001 2002 2003 2004 2005Exports 157,2 182,97 225,2 314 352,2Imports 94 34,55 81,09 87.06 185.3Turnover251,2 217,32 306,29 401.06 537.5B. -62.8- 148.62 - 144.11- 226.95 - 166.9

Trade.

India-Poland Trade, 1992-2005

0

50

100

150

200

250

300

350

400

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

ExportsImports TurnoverBalanceKolumnowy 3-W 5

Where does India stand in Polish market?

India s share of Polish market remains miniscule

In 2005, India accounted for only 0.3% of Poland s total imports

and 0.1% of Polish exports

market share in Polish imports of other countries

Brazil:0.43% China:3.8% Turkey:1.1%

Indonesia:0.41% Malaysia:0.5% Thailand:0.4%

EU countries:

Germany: 32,3% France: 6,1% Italy: 5,7% UK 5,0%

profile of India s export basket to Poland is fairly diversifiedbulk tea, coffee, unmanufactured tobacco, de-oiled cakes, black pepper, cotton yarn, cotton textiles, made-ups and apparel, jute manufactures, mica and mica products, light engineering products like hand tools and consumer electronics and some machinery items like machine tools and textile machinery

major imports from Poland have been

equipment for power stations, railway equipment such as wheel sets, rails etc., coal mining machinery, ships and ship engines, machine tools, other capital goods and commodities such as coking coal, sulphur, rapeseed oil, chemicals and pharmaceuticals, ferrous and non-ferrous metals

Economic Cooperation

Mining sectorcooperation in the coal sector started in theearly 1960ssupply of mining machinery, equipment andtechnical know-howPower sectorElektrim delivered machines, equipment and installations for 11 power plants in

India (Kaperkheda, Paras, Bhusaval, and Koradi in Maharashtra; Barauni and Bokaro in Bihar; Basin Bridge in Tamil Nadu; Durgapur in West Bengal; Rourkela in Orissa; and the Talcher power plant)Elektrim has additionally supplied a variety of transformers, switchboards and other

power transmission equipment and constructed a 75MW power plant in the Kuch region of Gujarat on a turn-key basisRailwaysPoland has been a supplier of railway equipment, particularly wheels, axles and

rails, as well as turbines and diesel engines to India

BelchatowThe biggest in Europe thermal power station based on

lignite

ShippingA number of merchant ships have also been delivered by the

Gdansk and Szczecin shipyards

ITPoland has a large trained pool of IT personnel.

Citibank sources software requirements and training programmes from India

Computer Land, a major IT firm in Poland, has tied up with a company in Pune for its training requirements

While major software contracts go to European firms, Indian companies, particularly those doing business with European firmscan utilize their contacts to enter this market.

Bilateral Investments/Joint Ventures

India and Poland are both seeking foreign direct investment and are thus not yet major capital exporting countries

Polish investments in India from 1991 to Nov 2003 amounted to US$ 4.19 million, while Indian investments in Poland up to February 2000 amounted to US$ 1.12 million(Source: Secretariat for Industrial Assistance, New Delhi)

Indian investments in Poland mainly involve trade offices/warehousing facilities

M/S Ranbaxy Ltd.has set up a representative office in Poland.

The biggest foreign investor taking over steel mills of 10 mln ton capacity

In Poland: there are two Indo-Polish joint ventures

(a) between Sharp Industries Ltd. and P.P. Hanmar Caresbac-Polska and Kleszczow Municipality for producing barrier films for food packaging

(b) between M/S Escorts and Pol-Mot for import and assembly of tractors in Mragowo, Poland

In India:

between Bobkay Engineers Private Ltd., Mumbai and Enko SA, Gliwice, Poland for manufacture of high quality electro-magnetic flow meters for food processing industry, especially for dairy sector

Possibilities exist for two sides to forge joint ventures or cooperate through technology transfer agreements in:

Automobilechemical and pharmaceuticalsearth moving and construction machineryElectronicsexploration of oil and natural gasenvironmental friendly technology for power stations and food processing sectors

Products: Embassy of India in Warsaw identified the following products

tea coffee ricespices tobacco cotton yarn fabric made-ups garments of all kinds for men and women as per normal European specifications computer software and hardware toys footwear (leather, casual and sports) leather and leather products

light engineering products and auto componentselectronic, electrical and non-electrical household products (especially those with established brand names)steel utensilschemicals (dyes etc.)drugs and pharmaceuticalshand toolsdata processing machinery and equipmenttravel goods (suitcases, soft bags)sports goods and equipmentwatches and clocksfloor covering and carpets

(a) Identify core group of exporters and draw up a time-bound promotion plan for thrust items

(b)Renewed focus not only on exploiting the emerging opportunities but also on sustaining and nurturing the growing market

(c) Establish direct contacts with new, West European-owned hypermarkets and departmental store chains, which have invested heavily in Poland

(d) Focus on Polish software and hardware market

(e) Participation of Indian companies in major annual fairs in Poland.

Some major fairs worth considering areBUDMA International Construction Fair (construction material, marble, graniteINFOSYSTEM International Fair of Telecommunications, Information Technology and Electronics (software and computer hardware)SANTEC International Fair of Bathroom Equipment (sanitary ware)International Fair of Industrial Technologies and Investment GoodsPOZNAN FASHION WEEK International Trade Fair of Textiles, Garments, Made-ups POLAGRA FOOD International Trade Fair for the food industry POLAGRA FARM Industrial Agriculture Trade Fair. Participation in other specialised fairs for seafood, construction industry, engineering and automotive components would also be useful

(f) Exclusive Made in India show

(g) Flexible credit insurance and export finance guarantees from ECGC

(i) Encourage Polish companies to participate in trade fairs in India

(j) Encourage Indian investments in Poland (already India has a very good image in Poland after LNM ( Mittal Group) has taken over the biggest Polish steel mills).

Annual inflow: 2003 -6.64 billion USD

2004 - 7, 0 billion USD

2005 -10,3Accumulated value, 2005 -abt.110 billionFDI country of origin: France(13,8),The Netherlands ( 9.8),USA (8.6),Germany (8.4)Fields: manufacturing (27.7),finance (16.2)Tourism (foreigners):15.5million (2003)

Study on how Poland s accession to the EU in 2004 influenced Indo Polish trade

Attempted to quantify possible adverse impacts as well as positive impactIt found that, while around 4% of Indian exports (in 1996-`03) would face higher tariffs, about 40% would gain from lower EU tariffs The study concluded that accession of Poland to the EU would result in a net gain for Indian exports and recommended intensified focus on these markets in the context of EU expansion.Textile and IT export from India should specially benefitMuch higher quality, technical & sanitary standards then it used to be in all Central European countries India s export of agriculture products: sugar, wheat, vegetables could be affected due to lower costs in Poland, better access to UE market ( notwithstanding to WTO negotiations)During transition period good opportunities for export oriented investment of Indian companies ( steel, automotive components, agro products, textiles and apparel, pharmaceuticalsGrowing attractiveness as a tourist destination for Indian middle class cheaper shopping, good network of good quality of hotels, improving transport

50M Shanti Path, Chanakyapuri110021 New Delhi

Fax 11- 268 89 215Phone 11- 414 96 915, 414 96 924, 414 96 921www.poltrade.inEmails: rh@poltrade.in, sh@poltrade.in pm@poltrade.in