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The Czech Republic & India

India and the Czech Republic established diplomatic relations already in 1947, what is a good proof of excellent historical ties.

Prime Minister of India Pandit Jawaharlal Nehru visited Prague in 1938 and subsequently influenced the strong condemnation of the 1938 Munich Pact by the Indian nationalist movement what meant a huge impetus for domestic struggle. Since the split of the Czechoslovakia in the Czech Republic and Slovak Republic in 1993, high level visits have been maintained on regular basis. To name only the few in recent year, Vicepresident of India Mr. M. Hamid Ansari visited the Czech Republic in June 2010, President of Senate of the Czech Republic Mr. Milan Štěch visited India in 2011 and Minister of Commerce and Textile Mr. Anand Sharma lead the Indian business delegation of 135 Indian companies to “India Show” in Brno in September 2012.

President Vaclav Havel received two prestigious Indian awards, “Indira Gandhi Peace Prize” (1994) and “Mahatma Gandhi Peace Prize” (2004).

Relations of both countries are currently being reinforced also on EU – India level.

There is mutually a great interest in exploring the civilization and history roots of our countries. Czechs are interested in Indian yoga, ayurveda and religious teachings. Indology in Charles University of Prague is one of the oldest in the continent, starting with the established in 1850. The Oriental Institute which was set up in 1922 under the auspices of the Czech Academy of Sciences has a long tradition of research in Indian languages, literature, history, culture, politics, etc. Indians can study Czech language in Delhi University and are increasingly visit the Czech Republic in search of history, architecture, leisure and shopping.

Bilateral Economic Cooperation

Czech – Indian economic and commercial ties date back to beginning of the 20th century. Czech firms have participated in the development of India’s industrial potential, mainly by deliveries of equipment for the power industry, engineering and other sectors. For almost four decades, Czechoslovakia was one of the leading trading partners of India among the East-European countries.

A number of Czech companies and experts have worked with Heavy Engineering Corporation. Skoda Power has been a technology licensor to BHEL. Jawa established itself strongly in Indian market with its popular Yezdi model (which means “it runs!”).

Even now, the Czech Republic is spontaneously associated in India with world-famous Czech brands, such as Skoda, Tatra, Bata or Zetor.

Since 2001, trade exchange between these two countries has been growing substantially, as proved by the fact that their mutual trade turnover has risen ninefold.

Nowadays, the Indian market has become one of the most important destinations for Czech companies. India’s role in Czech foreign trade is steadily growing thanks to the India’s strong embarkation on liberalization process as the exponential growth of Indian economy has created opportunities for EU and Czech companies. India has become the second largest Asian trade partner of the Czech Republic.

Machine tools, engineering technologies, mining technologies, heavy industry, power sector technologies, defense technologies, etc., are our core businesses as well. Sectors such as petrochemicals, food processing, civil aviation, beverages, design, etc., are the areas where both our countries can benefit from each other.

The major sector of bilateral cooperation is the automotive industry; Skoda Auto is doing well in India with its production of Skoda cars in India. Another Czech company Tatra produces trucks, mainly for the defense forces. Ashok Leyland is also now present in the Czech Republic since it bought a majority stake in the Czech company Avia, to name only the few.

Science and technology is one of the most promising areas of future cooperation. Council for Scientific and Industrial Research and the Czech Academy of Sciences has an agreement of cooperation. Following the signature of The Programme of Cooperation in Science and Technology (POC) and the Working Plan for Support of the Czech – Indian Mutual Projects in 2013-2016 this April in Prague, we can expect intensified cooperation and more projects with tangible results.

Czech Investment in India

In the past, Czech companies secure contracts for thermal power plants (Ennore in Tamil Nadu) and gas pipeline (Kandla - Bhatinda). The political climate in India seems opportune for foreign investment and Czech companies are trying their best to establish themselves on Indian market, offering high-quality products and basis of strong economy with expanding market and large middleclass.

Czech companies are emerging as major investors in energy and finance sector, they are also bidding for infrastructural and industrial projects in India. Other main thriving sectors of bilateral cooperation are engineering, information technology, medical equipment, chemicals and pharmaceuticals, bio-technology and nanotechnology, science and technology which offer opportunities for flow of trade and investment.

  • Skoda Auto: one of the premium automobile manufacturers in India, a fully owned subsidiary of Skoda Auto Czech Republic (Volkswagen Group)
  • Skoda Power: hundred power blocks in operation in India supplied from Skoda Power and by local firm BHEL, to which Skoda sold a license in the 1970s
  • Vítkovice Machinery Group: a major Czech Industrial group
  • ZKL Bearings CZ: setting up the production of railways bearings
  • Bonatrans: setting up railway and metro wheels production
  • Linet: hospital beds
  • FANS: cooling towers
  • Tatra: a joint venture in India with BEML

 

 

 

Indian investments in the Czech Republic

Indian companies from sectors like IT, textile, pharmaceutical, auto-components etc. are establishing themselves in the Czech Republic due to exceptional engineering skills of Czech labour and relatively low wages compare to other European countries. The Czech Republic is also considered the best choice for investments in transport and logistics.

As first came Infosys who established its presence in Brno and is getting contracts from Czech and international companies. Many Indian experts are working for Czech or international companies in the Czech Republic in the IT sector, finance, banking etc.

  • Infosys: IT facility in Brno
  • Shriram and SIRO Clinpharm
  • Spentex Industries: bought yarn maker Schoeller Litvinov
  • Glenmark Pharmaceuticals: acquired Medicamenta company
  • Arcelor Mittal: invested in a steel plant in the Czech Republic
  • Ashok Leyland (Hinduja Group): invested in Avia Ashok Leyland for trucks production
  • Alok Industries: acquired a textile plant Mileta in Horice and manufactures textile material under COTTONOVA brand
  • Motherson Sumi Systems Limited: manufacturing and supplying injection moulding components for automobile
  • Fedders Lloyd: acquired two Czech companies Lloyd Coils Europe (industrial heat exchangers) and Janka a.s. (industrial coils)

 

 

Bilateral trade is currently in favour of the Czech Republic. It reached US $ 1.24 billion in 2012. The Czech Government ranks India among the 12 priority countries for promotion of mutual commercial, investment and other economic activities and the goal is to reach the level of US$ 2 billion by the year 2015. Substantial opportunities exist for Indian companies especially in the automotive industry, heavy engineering, pharmaceuticals, chemical industry, IT and know-how and technology transfer.

Main export commodities of Czech companies to India are cars, machinery, energy facilities, turbines, chemicals etc.

India mainly exports iron and steel, electrical machinery, cotton, organic chemicals and leather.