Swedish firms in India plan to step up investments

New Delhi: Swedish companies in India are upbeat about business prospects in the country with more than half wanting to step up investments in the current fiscal, a survey carried out by the Swedish Chamber of Commerce has highlighted.

With Swedish retailers such as IKEA and H&M planning to set up stores in India in 2013, things are set to get even better this year.

However, red-tape, including the procedure for obtaining licences and clearances, restrictions on business structures, a complex taxation structure, lack of skilled workforce, rising operational costs and complicated import rules, are acting as major hindrances to growth, the Business Confidence Survey 2012 points out.

Major Swedish companies in India include transport major Volvo, bio-pharma company Astra Zeneca, telecom provider Ericsson and industrial equipment makers Atlas Copco, Sandvik and SKF.

Increasing interest
“Even though we are facing an economic slowdown in India and the rest of the world and the business climate has hardened during 2012, there is an increase in Swedish companies in the Indian market,” the Survey pointed out.

Interestingly, Swedish companies in retail and IT have experienced highest growth while engineering and medical equipment are the only to sectors where the market has shrunk.

The number of Swedish companies in India has increased 14.5 per cent to 158 in 2012, compared with 153 the previous year, and the number is likely to go up this year. The survey, that was carried out through questionnaires circulated to 153 Swedish companies in India, also brings to light the confidence Swedish firms have in the India story.

Higher market share
More than half the companies surveyed confirmed that their investments would go up by more than 10 per cent in the current year.

Half the companies said they had increased their market share in 2012 over the previous year.

As many as 45 per cent of the respondents said their revenue forecast is 20 per cent higher than in 2011.

On the downside, as many as three-fourths of the respondents complained about rising operational costs, while 89 per cent expect their costs to go up in the future.

A very large number of respondents also believe that non-transparency in Government and bureaucratic hurdles were major obstacles.