The Goods and Services Tax (GST) in India is the biggest issue for Swedish companies in terms of investment, said Harald Sandberg, Ambassador of Sweden to India, on Friday, ahead of Swedish Prime Minister Stefan Lofven’s maiden visit to the country next week.
PUNE : The Goods and Services Tax (GST) in India is the biggest issue for Swedish companies in terms of investment, said Harald Sandberg, Ambassador of Sweden to India, on Friday, ahead of Swedish Prime Minister Stefan Lofven’s maiden visit to the country next week.
The GST, one of the major reforms that is expected to simplify logistics and bureaucratic procedures, is stuck in the Parliament for some time.
“Companies will always have a long list of what they will want to see in terms of ease in doing business. The one big thing which has often come up in our discussions is the implementation of the GST,” Sandberg said in an exclusive telephonic interview with TOI.
The overall sentiment of Swedish companies on the investment climate in India remained favourable in 2015, but was lower compared to 2014, as highlighted by a recently released ‘Business Climate Survey (BCS) 2015’ by the Swedish Chamber of Commerce in India. Of the 141 companies covered by the survey, 52% companies felt the investment climate was favourable against 60% in 2014. Sandberg said, “This dampening of sentiment is more a question of flattening out the euphoria generated in 2014. Yet, there are positive signs for the Sweden-India bilateral trade to grow in the next couple of years.” Bilateral trade between Sweden and India was $2.5 billion in 2015 and both countries have set an ambitious target of touching $5 billion by 2017.
On where from this projected enhancement is expected to come, Sandberg said, “There remains a great potential in different sectors for both the countries. Most Swedish companies have invested in India in phases, particularly the period between 1970s and 1990s saw a major presence of Swedish companies in India. From information technology to automotive and other sectors.”
“Big retail companies like IKEA and fashion brand H&M will drive the next wave of Swedish investment in India in view of steps like the new single brand retail legislation. Several small- and medium-size Swedish companies too have evinced a keen interest in making investments in India,” he said. “As of now, total 160 Swedish companies have their presence in India, directly employing 1.60 lakh people and leading to creation of 1.1 million jobs,” said Sandberg. This includes large multinationals like Ericsson, ABB, Astra Zeneca, Atlas Copco, Volvo, Sandvik, Scania, SKF, Tetra Pak which have invested in manufacturing, research and development in India.
Sandberg said, “Maharashtra should always find a mention considering that Pune along with Bengaluru and Delhi-NCR is home to the biggest concentration of Swedish companies in India. This apart, Swedish firms have presence in Rajasthan and Gujarat.”
On concerns raised by BCS 2015 survey, about taxation and regulatory issues, import restrictions, restrictive labour laws, high custom duty etc., Sandberg said, “There will always be suggestions by the companies. For us though, GST is the number one issue.”