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1、 BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023 A REPORT FROM TEAM SWEDEN IN INDIA TABLE OF CONTENTS FOREWORD.1 EXECUTIVE SUMMARY.2 ABOUT THE SURVEY.3 ECONOMIC OUTLOOK.4 THE MARKET.9 HOW SWEDISH COMPANIES SUCCEED IN INDIA.14 ACTING SUSTAINABLY.18 CONTACT US.23 KEY CONTRIBUTORS TO THIS R

2、EPORT Business Sweden in India Swedish Chamber of Commerce in India copyright 2023 Business Sweden BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|1 FOREWORD Welcome to the Business Climate Survey Report 2023,highlighting Swedish companies experience of doing business in India and their

3、perception of the local market conditions.This survey is conducted as part of the Global Business Climate Survey,a collaboration between Business Sweden and Swedish Chambers International.Sweden and India share a long history of collaboration,and 2023 is a very special year that marks 75 years of di

4、plomatic relations between the two countries.Both countries have signed dedicated MoUs in several areas,including health,science and technology,energy,environment and urban development,defence,space,and MSMEs for the promotion of research and development cooperation and introduction of sustainable t

5、echnologies.India is now home to 260 Swedish companies,and this number is growing with the boost towards trade and investment by the Government of India.Swedish companies have been operating in India for over 120 years,with a surge in the last twelve years,when more than a hundred companies have ent

6、ered India.Given Indias stable political environment,geo-political strategic alignment,cost advantage,strengthened government initiatives,along with a rising domestic market and ease of doing business,the country is steadily rising as an attractive destination to be a hub for manufacturing,sourcing,

7、and logistics.With more than 220,000 people employed directly and 2,200,000 indirectly,the Swedish companies group is active in various sectors and business areas,building long-term,sustainable,and meaningful business.Out of the 214 companies that participated in this survey,86 per cent perceive the

8、 business climate encouragingly as good/very good.As the business landscape in India rapidly evolves,Innovation,Digitalisation and Green Transition will be the key pillars of Indias economic growth amongst the many common binding areas of interest to the companies.This was also the agenda when our t

9、wo Prime Ministers met in May at the second India-Nordic Summit,this time held in Copenhagen,Denmark.LeadIT,the Solar Alliance,and our Innovation Partnership are some important initiatives where India and Sweden are leading the way.In the post-pandemic era,we see India taking more space in global va

10、lue chains going forward,and ongoing discussions on a Free Trade Agreement between the EU and India is another area of cooperation that could enable companies from both nations to expand cross-country collaboration.We hope that this report will give you a useful overview of the business environment

11、in India,especially for those who have not yet entered the Indian market.We in Team Sweden India stand ready to welcome you!Thank you to all of you who took the time to participate in the survey and contributed with your thoughts and experience.And we trust you will find this report will serve as a

12、valuable as well as an informative tool.Cecilia Oskarsson Trade&Invest Commissioner of Sweden to India Sara Larsson General Manager Swedish Chamber of Commerce India BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|2 EXECUTIVE SUMMARY COVERAGE 200+Swedish companies in India answered the s

13、urvey.47%of the respondents are medium-sized companies,followed by 35%small companies and 18%large companies.70%of the respondents reported profitability in 2022.60%of the respondents plan to increase the investment in India in 2023 during the upcoming year.79%of the respondents expect their turnove

14、r in India would increase in 2023.ECONOMIC OUTLOOK 86%describe the business climate in India as good or very good.Advantages:level of digitalisation,easy availability of service providers,distributors,suppliers,specialists,and key personnel,improved market access,and positive work culture.Suggested

15、improvement areas:licenses,permits&approvals,and physical infrastructure.BUSINESS CLIMATE 81%believe that the Swedish brand stands strong and contributes to their success.Important factors in maintaining competitiveness in the country are Public Affairs,Cost Efficiency and Brand awareness.KEY SUCCES

16、S FACTORS 56%of participants customers consider environmental aspects of products/services while making purchase decisions.SUSTAINABILITY BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|3 ABOUT THE SURVEY Companies of varied sizes,industries,and ages participated in the survey The Busine

17、ss Climate Survey is a proven tool used by Team Sweden to gain insight into the current business environment,map opportunities,and highlight challenges being faced by Swedish companies while doing business across the world.Spearheaded by Business Sweden and the Swedish Chamber of Commerce India,Team

18、 Sweden in India carried out this survey in March-April 2023 to track how the Swedish companies operating in India perceive the business climate,economic situation,and market development opportunities in the country.All of the 261 Swedish companies in India were invited to participate in this survey

19、,and 214 companies responded to the survey,resulting in a response rate of 87 per cent.The companies rated their experience of economic prospects,key success factors,opportunities,and challenges of doing business in India.This report consists of four main sections.The first section provides insights

20、 into the economic performance of Swedish companies in India,including their outlook for the coming year.It is followed by companies views on the Indian market and the current business environment.The third section covers operations and perceived success factors in the market,and the last section ex

21、plores sustainability-related aspects,including country dynamics,customers preferences,and the role sustainability plays in Swedish players growth journey.Around 18 per cent of the respondent companies are considered large with a global turnover exceeding US$50 million and/or 1000+global employees,w

22、hile 47 per cent of the companies are medium-sized with a global turnover of between US$11-50 million and/or the number of employees between 250-1000.The rest 35 per cent are small companies.In terms of business areas,the majority of the respondents are industrial companies(53 per cent),followed by

23、professional services companies(40 per cent)and consumer companies(seven per cent).Recent entrants,panies established in India after 2016,constitute 16 per cent of the respondents,compared to 64 per cent experienced companies that were established during 2002-2016 and 20 per cent mature that were es

24、tablished before 2001.We hope that this report will provide valuable insights into how Swedish companies perceive the current business environment and ease of doing business in India.SIZE OF COMPANIES NOTE:Small:0-249,Medium:250-1000,Large:1000 MAIN INDUSTRY NOTE:Professional Services:40 per cent,Co

25、nsumer:7 per cent,Industrial:53 per cent AGE OF COMPANIES NOTE:Mature(-2001).Experienced(2002-2016).Newcomer(2017-)BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|4 ECONOMIC OUTLOOK Resilient economy in the face of global headwinds As the world is going through a slow recovery,India has

26、managed to maintain robust growth in the post-pandemic era.As per the World Banks latest report,a few of the developed countries,such as the US,Japan and European countries,are projected to grow with less than a one per cent growth rate in 2023,whereas Indias projection is 6.3 per cent.Emerging econ

27、omies,on the other hand,may be impacted by the slowdown in developed economies as these economies are largely dependent on exports.Due to the presence of a large domestic market,India isnt too dependent on exports as other emerging economies.Indias exports account for approximately 22.4 per cent of

28、its GDP,which is lower compared to the global average of around 30 per cent.In contrast,countries such as Vietnam have a significantly higher export-to-GDP ratio of 93 per cent,while Malaysia stands at 69 per cent,and various economies in the Asia Pacific region are at 56 per cent.(Source:World Bank

29、)India also witnessed slightly elevated inflation in earlier quarters,but various measures were undertaken by the Indian government and the Reserve Bank of India to curb inflation and its impact through monetary policies.The central bank has tightened monetary policy in a series of hikes since April

30、 2022,resulting in an increased lending rate for fresh rupee loans,further supporting the economy.Also,the government has imposed a ban on the export of certain food items and increased fertiliser subsidy(INR 2.5 Tr highest till date)to control retail inflation in the country.PROJECTED GDP GROWTH IN

31、 INDIA Source:Oxford Economics,GDP,real annual growth,Last update 10 May 2023 BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|5 Following the contraction of real GDP in FY19/20 as a result of the Covid-19 pandemic,there was a robust recovery in growth during FY20/21.This recovery was fac

32、ilitated by accommodating monetary and fiscal policies,as well as widespread vaccine distribution.Consequently,India emerged as one of the worlds fastest-growing economies in 2022,despite facing substantial obstacles in the global arena,such as renewed disruptions in supply chains due to escalating

33、geopolitical tensions,the simultaneous tightening of global monetary policies,and inflationary pressures.Indias real GDP grew by approximately 5 per cent in FY23.According to World Bank,the growth was supported by strong domestic demand,increased investment activity fuelled by the governments push,a

34、nd robust private consumption,primarily among higher-income individuals.However,there have been signs of moderation since Q3 FY22/23,although the overall growth momentum remains strong.Persistent challenges such as rising borrowing costs,tighter financial conditions,and ongoing inflationary pressure

35、s are expected to impact Indias growth in FY23/24.In terms of fiscal indicators,both the general government fiscal deficit and public debt-to-GDP ratio experienced significant increases in FY20/21 but have gradually declined since then.The fiscal deficit decreased from over 13 per cent in FY20/21 to

36、 an estimated 9.4 per cent in FY22/23.Similarly,public debt declined from over 87 per cent of GDP to approximately 83 per cent during the same period.This consolidation was primarily driven by revenue growth and a gradual withdrawal of pandemic-related stimulus measures.Additionally,the government h

37、as maintained its commitment to enhancing capital spending,particularly in infrastructure,to foster growth and enhance competitiveness.The governments focus on capital spending and infrastructure was also observed at US$550 billion in the 2023 budget.Indias finance minister announced that the govern

38、ments capital investment outlay would rise for the third year in a row,with a sharp 33 per cent hike to 10 trillion rupees(US$122 billion).That is equivalent to about 3.3 per cent of gross domestic product.Also,the government had identified 100 critical transport infrastructure projects related to f

39、irst-and last-mile delivery in the port,coal,steel,fertiliser,and food grain sectors.This resilience shown by the Indian economy can also be seen in Swedish companies response towards their business performance in past years and their expansion plans and investment in the near future.BUSINESS CLIMAT

40、E SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|6 HOW WOULD YOU DESCRIBE YOUR COMPANYS FINANCIAL PERFORMANCE IN INDIA IN 2022?NOTE:The number of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Comp

41、anies in India 2023.Despite global uncertainties,a significant percentage of Swedish companies in India reported their operations to be profitable.Compared to 2021,where 62 per cent of the respondents witnessed profitability,the percentage has increased to 70 per cent in 2022.Nine per cent were able

42、 to break even,whereas only eight per cent of respondents reported a loss in 2022,as depicted in the figure above.BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|7 COMPARED TO THE DEVELOPMENT IN THE PAST 12 MONTHS,WHAT ARE YOUR EXPECTATIONS FOR THE COMING 12 MONTHS FOR YOUR INDUSTRY IN I

43、NDIA REGARDING TURNOVER?NOTE:Decrease and increase represent aggregations of slight/significant development changes.The number of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Ind

44、ia 2023.Around 79 per cent of Swedish companies in India are optimistic regarding their prospects for an increase in turnover and better financial performance.Over the past few surveys,this percentage has only seen minute deviations.India continues to attract the interest of global companies and inv

45、estors In 2021-22,India registered its highest-ever total FDI inflows of US$84.84 billion.The Mauritius route accounted for around 26 per cent of the total foreign direct investment(FDI),while Singapore followed closely behind with 23 per cent.The United States comprised nine per cent of the FDI,wit

46、h the Netherlands at seven per cent,Japan at six per cent,and the United Kingdom at five per cent.The United Arab Emirates,Germany,Cyprus,and the Cayman Islands each represented two per cent of the FDI.Between April 2000 to September 2022,total FDI into India reached US$887.8 billion.The services se

47、ctor,along with computer software and hardware,telecommunications,trading,construction development,automobile,as well as chemicals and pharmaceuticals,emerged as the primary recipients of substantial(FDI).The service sector continues to be quite popular with global players FDI inflows to the sector

48、increased to US$153.01 billion during April 2014 to March 2022 from US$80.51 billion during April 2000 to March 2014 Between 2015 and 2020,Swedish companies invested US$1.7 billion in India.Also,in the past three years,multiple Swedish companies infused huge investments and opened manufacturing faci

49、lities in the country,including Alleimas new Hydraulic and Instrumentation tubing factor,IKEA invested US$400 Mn earlier in 2022 to open a store in Bangalore,India.The investment from Swedish players is further expected to rise in the coming BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 202

50、3|8 years and is diversified across industry sectors.Below are a few of the investment plans already announced by leading Swedish firms in India.IKEA announced to invest US$1.2 Bn towards setting up two retail stores and malls in Northern Indian states.Medicover announced its aggressive plan to doub

51、le the capacity of its hospitals and beds in the next five years in India.Serneke intended to invest US$1.2Bn in the Film City project in the northern Indian state of Uttar Pradesh.WHAT ARE YOUR COMPANYS INVESTMENT PLANS FOR THE COMING 12 MONTHS IN INDIA,COMPARED TO THE PAST 12 MONTHS?NOTE:The numbe

52、r of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in India 2023.A majority of the Swedish companies surveyed are quite optimistic about the Indian market and plan to expand operatio

53、ns;60 per cent are looking forward to increasing investments during the upcoming 12 months.Twenty-five per cent of companies reported they will neither increase nor decrease their investments,whereas only seven per cent indicated they will reduce their investment or exit the market in the coming yea

54、r.BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|9 THE MARKET India presents immense opportunities for global businesses India being one of the largest and fastest-growing economies,presents immense opportunities for global investors.The Indian government has been making enormous effort

55、s to create an open and collaborative ecosystem not only for domestic investors but also to attract foreign investors.Multiple policies and programs have been initiated by the government,including GST(Goods&Services Tax),Land acquisition,Start-up India,make in India and Tech Parks,which have further

56、ed“Ease of Doing Business”in the country.Below are the three important levers needed to build any country an ideal destination for investment,and the country has been working to upgrade these levers.Technology:Indias technology ecosystem is evolving very rapidly,not only from the supply side but als

57、o from the demand side.The majority of industries have decent technology adoption,including Industry 4.0,AI,blockchain,automation etc.All this has been possible because of substantial internet penetration in the country.Urban India has 70 per cent+internet penetration with nationwide high bandwidth

58、fibre optics network availability.This matured connectivity ecosystem also enables companies to reach out to a large customer base through hybrid business models.These changes are making India an attractive market for global investors.Resources:India also has a vast pool of skilled and experienced w

59、orking professionals.Every year India produces 1.5 million engineering graduates,which makes India an ideal destination for engineering and innovation centres.India is a hub for IT and Business Process Management services for global clients;Indias IT&BPM industry holds more than 50 per cent of the g

60、lobal outsourcing market with the presence of mostly all the IT companies in the country.Infrastructure:In addition to resources,India also provides modern business&technology infrastructure,which attracts global companies to set up their base here.India has world-class manufacturing plants,tech sup

61、port centres,innovation parks,and research centres.India has been known as a leader in software and BPM outsourcing in the world.With the government efforts and increasing domestic demand,the country is now moving rapidly up the value chain from providing low-cost software services to hardcore manuf

62、acturing and offers huge opportunities for the international players across industries,such as pharmaceuticals,food products,white goods,solar component manufacturing,automotive,industrial equipment,semiconductors,next-generation telecommunications and others.India has bounced back very well despite

63、 the global uncertainties&economic crisis.It is expected to be the fastest-growing economy in the world.Also,the current Business Climate in India is optimistic&bright.Digitalisation,Infrastructure development,and Renewable Energy are the key growth enablers of India and will play a very important r

64、ole in driving the Indian economy in general&the industries in particular.A leading climate solutions provider BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|10 IN WHAT YEAR DID YOUR COMPANY ESTABLISH OPERATIONS IN INDIA?NOTE:The number of respondents for this question was 214.“Dont kno

65、w/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in India 2023.The business relations between India and Sweden were established at the beginning of the 20th century(1900-1925)when Ericsson,SKF,and Swedish Match entered the country.T

66、he second wave of companies during 1960-70 transformed Pune into an industrial hub;Alfa Laval,Tetra Pak,Sandvik,and Atlas Copco were among the major companies that arrived in this phase.The third and fourth wave of companies in 1980-90 and early 2000s,respectively,brought in Volvo Trucks&Buses,Perst

67、orp,IKEA,Volvo Cars,and Scania.Over 40 per cent of companies in this survey established operations in the Indian market in the past 10 years.With increasing domestic demand and government push towards Make in India and PLI schemes,India is expected to further witness more entry of Swedish players,es

68、pecially in the manufacturing sectors across heavy engineering,mobility,energy&sustainability sectors and others.WHAT IS YOUR COMPANYS MAIN INDUSTRY IN INDIA?NOTE:The number of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Busin

69、ess Climate Survey for Swedish Companies in India 2023.India has been continuously focusing on nurturing favourable conditions for companies and businesses to operate on its soil.The country has steadily climbed up the World BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|11 Banks“Ease o

70、f Doing Business”chart improving its position from 142nd in 2014 to 63rd in 2022.Healthcare/Pharma,Industrial equipment,automotive,and IT are among the preferred sectors for entry and growth of Swedish companies in India.Under the Industrial equipment sector,a diverse range of Swedish companies enga

71、ged in the manufacturing of machinery&equipment,construction material,metal and plastic products,and automation technology products are present in the country.The largest share is captured by companies in the industrial equipment sector(16.9 per cent),followed by IT&Electronics(13.8 per cent),Health

72、care/Pharmaceuticals(13.1 per cent),Automotive(9.4 per cent),and Energy/Electricity(5.6 per cent).SWEDISH FIRMS GLOBAL NUMBER OF EMPLOYEES IN 2023 NOTE:The number of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate

73、 Survey for Swedish Companies in India 2023.Looking at the presence of Swedish players in terms of the size of the company,the highest share(26 per cent)is captured by mid-sized companies with global employee strength between 250 and 1000.The recent surge in the number of Swedish start-ups,and SMEs

74、venturing out of Sweden to global markets,resulted in companies with less than 250 employees accounting for the second largest share(20 per cent).Large companies with more than 1000 employees represent the lowest share(10 per cent)in terms of total respondents.SWEDISH FIRMS LOCAL NUMBER OF EMPLOYEES

75、 IN INDIA IN 2023 NOTE:The number of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in India 2023.BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|12 India is gradually eme

76、rging as a key export market for Swedish companies,attributed to the improvement in ease of doing business,infrastructure development,and strong private consumption.Around 40 per cent of the current 262 companies have entered India in the last twelve years and have been strengthening their presence

77、in the country.Four per cent of the companies have a local workforce of over 1,000 people,27 per cent employ between 0-249 local employees,whereas 59 per cent employ 250-1000 employees.Doing business in India has never been better An overwhelming majority of respondents(86 per cent)in the 2023 surve

78、y indicated that they perceive the business climate in India as Very Good/Good.This represents a substantial increase from the 2022 survey results,wherein the equivalent figure was 67 per cent.The proportion of companies reporting Very Poor/Poor continues to go down from 11 per cent in 2021 to a mer

79、e three per cent in 2023.When taking into account that the global pandemic was still continuing in 2021 and 2022,these results are impressive,indicating that India has been successful in maintaining a strong business climate despite global uncertainty.Policy reforms,investment facilitation,strengthe

80、ning of the Make in India initiative,tax breaks and low cost-high skilled resources have resulted in better ease of doing business in India and attracted more foreign investment in the country.Deep reforms,including Gati Shakti,launched at the end of 2021,a digital platform to bring 16 ministries to

81、gether,including Railway and Roadways,for integrated planning and coordination.Holistic planning and implementation of Connectivity projects are surely helping foreign investment.Production Linked Incentives(PLI)Scheme launched across 14 key manufacturing sectors,further boosting the Make in India i

82、nitiative and encouraging domestic as well as foreign players to expand their manufacturing operations in the country.This policy offers opportunities not only to foreign manufacturers,but also to players who can help in setting up the complete supply chain of the industries.The aforementioned effor

83、ts by the government of India have created a positive business climate for foreign players,including Swedish players looking for international expansions.Positive sentiments on the business environment are equally prevalent among large,medium,and small-sized companies across all industries.Companies

84、 in the consumer products sector have the highest positive perception of the business climate,followed closely by industrial services and professional companies.BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|13 HOW DO YOU PERCEIVE THE CURRENT BUSINESS CLIMATE IN INDIA?NOTE:The number of

85、 respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in India 2023.HOW WELL DO THE FOLLOWING CONDITIONS MEET THE NEEDS OF YOUR COMPANY IN INDIA?NOTE:The number of respondents for this ques

86、tion was 214.SOURCE:Business Climate Survey for Swedish Companies in India 2023.As per the survey,the Swedish companies in India are overall satisfied with the presence of basic prerequisites for doing business in India.Except for“Customs”,all different components of the business climate mentioned i

87、n the survey are rated above 6 on a scale of 1-9.The level of digitalisation,service providers,distributors,suppliers,specialists/key personnel,and market access in India are rated the highest.Although with ratings above neutral,customs,licenses,permits&approvals,physical infrastructure,and labour m

88、arket regulations are the least rated.The current investment climate is extremely positive with the growing middle-class population fueling the consumption coupled with Govt of Indias Ease of doing business initiatives.Stable governance and revived policies,with economic stability makes India an att

89、ractive destination for multinational companies.A leading Swedish Industrial Products Manufacturer BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|14 HOW SWEDISH COMPANIES SUCCEED IN INDIA Sales and Marketing remain a focus in local operations For over 44 per cent of respondents,marketin

90、g and sales form a key focus of their local operations in India,other target areas include after-sales and support(33 per cent)and manufacturing and assembly operations(30 per cent).Twenty-seven per cent and 19 per cent of the respondent companies have their key operations in sourcing&trading and R&

91、D,followed by provision of services represent(15 per cent),and these are the two areas where we have been seeing increasing focus recently.Whereas provision of services represents only 15 per cent of the respondents key operations in the country.Sourcing&Trading and R&D are two areas where we have b

92、een seeing increasing focus recently.India eased its local sourcing norms for FDI in Single Brand Retail Trading(SBRT)in 2019,which also boosted Swedish players confidence in setting-up sourcing&trading operations in the country.Also,India is emerging as an R&D hub for multinational companies,especi

93、ally in pharmaceuticals,automobiles,IT and biotechnology verticals.The US,Singapore,and France are some of the biggest R&D investors in India,driving R&D operations in their respective economic sections.The companies not only drive India or APAC-specific product design and R&D but also for other mar

94、kets.OPERATIONS OF SWEDISH FIRMS IN THE MARKET NOTE:The number of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in India 2023.Public affairs and cost efficiency define competitivenes

95、s All the participating companies(100 per cent)in the survey rated Public affairs in India to be of the highest importance when it comes to maintaining competitiveness in the market.In the Indian context,the public affairs scope helps companies learn about the BUSINESS CLIMATE SURVEY FOR SWEDISH COM

96、PANIES IN INDIA 2023|15 directional governmental policy,which is very helpful in formulating growth strategies for the country.Close to half(47 per cent)of the participating companies ranked Cost efficiency as being vital.This comes as no surprise as India is a cost-sensitive market.Innovative yet c

97、ost-effective products and services remain key to unlocking opportunities in the Indian market.Other important areas include Brand awareness,Product development,Sales competence,etc.TO DATE,WHICH OF THE FOLLOWING AREAS HAVE BEEN IMPORTANT IN MAINTAINING COMPETITIVENESS IN INDIA?NOTE:The number of re

98、spondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in India 2023.BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|16 Swedish brand is a supporting factor for the business TO WHAT

99、 EXTENT WOULD YOU ESTIMATE THAT THE“SWEDISH BRAND”CONTRIBUTES TO YOUR BUSINESS IN INDIA?NOTE:The number of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in India 2023.Sweden continue

100、s to rank highly when it comes to innovation,sustainability,and developing high-quality products.Global Innovation Index 2022 ranked Sweden as the third most innovative country after Switzerland and the US.This Swedish reputation or brand translates well in the Indian market.As per the Business Clim

101、ate Survey,97 per cent of the companies reported that the Swedish brand contributes Much/Very much to their business in India.Only three per cent of respondents report that it has Not at all/Little impact on their performance.Navigating the Customs Conundrum Atmanirbhar Bharat,or the Self-reliant In

102、dia campaign,is of the flagship programmes of the Indian government.The focus is on indigenisation and ramping up domestic manufacturing for various goods and services.To safeguard the interests of domestic manufacturers,import and customs duties are utilised.In the last year,the government has hike

103、d or imposed new customs duties on raw materials and components used in various industries,such as solar cells and modules,childrens toys and luxury&electric vehicles and others.As a result of the import/customs duty hike,the country has seen declining export and rising new investment from foreign a

104、nd domestic players in the country.At present,there is no free trade agreement between India and EU countries.Hence,24 per cent and 26 per cent of the respondents indicated witnessing trade barrier challenges in customs duties and customs procedures areas,respectively.These figures remain largely un

105、changed from last years survey.However,EU-India Free Trade Agreement is under negotiations and has recently conducted a fifth round of discussion successfully,expected to be concluded in 2024.BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|17 HAS YOUR COMPANY IN THE PAST YEAR ENCOUNTERED

106、 TRADE BARRIERS IN INDIA WITH A NOTICEABLY NEGATIVE IMPACT ON OPERATIONS,IN ANY OF THE FOLLOWING AREAS?NOTE:The number of respondents for this question was 214.SOURCE:Business Climate Survey for Swedish Companies in India 2023.BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|18 ACTING SUS

107、TAINABLY The Green Transition:India marches on India is one of the fastest-growing economies in the world and has committed to becoming a net zero economy by 2070.It has also committed to reducing the emissions intensity of its GDP by 45 per cent by 2030.As per the Climate Change Performance Index(C

108、CPI,2023),India ranks amongst the top five best-performing countries on Climate Change,attributed to the countrys aggressive policies towards renewable energy adoption,a robust framework of energy efficiency programs and other green transition initiatives.India is on its path towards environment-ori

109、ented transformation,aligning with the Prime Ministers vision of“LiFE”or Lifestyle for Environment a flagship programme to promote a sustainable lifestyle across the globe.At COP 27,India launched its long-term low-carbon development strategy providing a roadmap for sectoral transitions needed for I

110、ndias transition to the 2070 goal.As per the Long-Term Low Emissions and Development Strategies(LT-LEDS)submitted,India will focus on seven key areas to reduce net emissions,including electricity,urbanisation,transport,industrial systems,CO2 removal,forestry,and economic and financial aspects.Additi

111、onally,India has already started working towards these goals and is introducing ways and mechanisms to increase the use of biofuels(ethanol blending in petrol),adopting more green hydrogen as a fuel,boosting the number of electric vehicles in the country,expansion of public transport networks etc.In

112、dian Government has prioritised“Green Growth”as one of the key areas under Indias Financial Budget 2023;to support a range of initiatives aimed at accelerating clean transition and sustainable growth.This includes a number of projects:National Green Hydrogen Mission:An outlay of US$2.4 Bn has been a

113、llocated with an ambition to reduce dependence on fossil fuels and reach an annual production of 5 MMT(million metric tonnes)of green hydrogen by 2030.Green Energy Transition:US$4.3 Bn has been allocated to the Ministry of Petroleum and Natural Gas towards priority capital investment for energy secu

114、rity,net zero objectives,and energy security.Battery Storage:Announced viability gap funding for a large energy storage system with a min capacity of 4000 MWh.Renewable energy:Announced renewable energy-based interstate grid integration and power transmission projects worth US$2.5 Bn.Green Credit Pr

115、ogram:An incentivised program under Environment Protection Act,1986;for companies,individuals,and local bodies that undertake environmentally sustainable and responsive actions.Vehicle replacement:The budget also allocated funds to scrap old polluting government vehicles and replace them with new on

116、es.India is leading the presidency of G20 this year,which focuses on the theme of“Vasudhaiva Kutumbakam”,or“One Earth,One Family,One Future”.The theme highlights the importance of adopting ecologically responsible and mindful choices,both in individual lifestyles and national development.Through thi

117、s program,India is moving towards becoming a more sustainable,cleaner,greener,and healthier nation.This also helps create awareness among the common men to prioritise sustainable products over regular ones.While sustainability is not only a responsibility but also an obligation for all economies glo

118、bally,the challenges are amplified in a case of a fast-emerging economies such as India where it is important to balance growth expectations with sustainable solutions.A leading digital transformation and advisory company BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|19 TO WHAT EXTENT

119、DO CUSTOMERS IN INDIA CONSIDER ENVIRONMENTAL ASPECTS OF A PRODUCT OR SERVICE IN THEIR PURCHASING DECISION?NOTE:The number of respondents for this question was 214.SOURCE:Business Climate Survey for Swedish Companies in India 2023.Environmental aspects of products have started to emerge as one of the

120、 key factors impacting the purchase decision-making process of key customers.As per the survey,56 per cent of companies responded that their customers in India consider(fully or partially)environmental aspects of a product or service in their purchasing decision,whereas 30 per cent responded their c

121、ustomers consider very little or little.BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|20 India continues to tackle Corruption Problem at all levels As per Corruption Perception Index by Transparency International,India ranks 85th on a list of 180 countries,the same as last year but has

122、 improved significantly by seven positions compared to 2018.Although the pace of Improvement in CPI is not similar to the level of improvement in overall ease of doing business,the country has been addressing this issue at all levels by leveraging technology,enhancing transparency and simplifying pr

123、ocedures.Some of the key initiatives and actions taken by the Indian government include whistleblower protection,direct benefit transfer mechanisms,implementation of E-tendering in public procurements,deployment of the Central Vigilance Commission(CVC)and others.While these measures have been implem

124、ented in the system,India continues to work on strengthening its legal framework,improving the efficiency of law enforcement agencies,and fostering a culture of integrity and ethics in both public and private sectors to combat corruption comprehensively.The majority of respondents in the survey eith

125、er declined to comment or were not aware of any corruption issues.Around four per cent mentioned witnessing corruption while dealing with private counterparts,and three per cent while dealing with public bodies.Around two per cent mentioned having faced corruption with their internal counterparts.HA

126、S YOUR COMPANY IN INDIA BEEN EXPOSED TO CORRUPTION SUCH AS,BUT NOT LIMITED TO,ATTEMPTS OF BRIBERY OR FRAUD IN CONTACTS WITH ANY OF THE FOLLOWING AREAS?NOTE:The number of respondents for this question was 214.SOURCE:Business Climate Survey for Swedish Companies in India 2022.High focus on the prevent

127、ion of human rights violations among Swedish companies in India Preventing human rights violations has always been a priority focus area for Swedish businesses in India.The majority of Swedish companies in India follow a high level of ethical practices while dealing with supply chain partners,partne

128、rs and collaborators and their customers from a human rights point of view.Although the majority of respondents,85 per cent,commented Dont know/NA,13 per cent have not witnessed any violation of human rights.Only two per cent of respondents said they had encountered human rights abuses in their supp

129、ly chain in India.3%4%2%78%Public bodiesPrivate counterparts Internal counterpartsDont know BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDIA 2023|21 HAS YOUR COMPANY IN INDIA ENCOUNTERED ANY FORM OF HUMAN RIGHTS VIOLATIONS AND/OR LABOUR RIGHTS ABUSE IN ANY OF THE FOLLOWING AREAS?NOTE:The numbe

130、r of respondents for this question was 214.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in India 2023.2%0%0%13%85%Supply chainsPartners&CollaboratorsCustomersNot at allDont know/NA BUSINESS CLIMATE SURVEY FOR SWEDISH CO

131、MPANIES IN INDIA 2023|22 CONCLUDING COMMENTS 2022 turned out to be a great year for Swedish companies in India.70 per cent of the surveyed companies reported profitability in 2022,whereas in 2021,the share was 62 per cent.Also,Swedish players are very optimistic for the coming year as well:80 per ce

132、nt of the surveyed companies are expecting their turnover to be increased next year,and 60 per cent are planning to expand their operations in the country.Most of the surveyed Swedish companies(86 per cent)in India perceive the business climate in India as very favourable for doing business;in 2020,

133、the equivalent figure was 61 per cent,and 67 per cent in 2021.The favourable conditions for their business in India are good availability of service providers,specialists and key personnel,digitisation acceptance,distributors etc.All the participating companies in the survey rated Public Affairs in

134、India to be of the highest importance when it comes to maintaining competitiveness in the market.Close to half of the participating companies ranked Cost efficiency as being vital,followed by brand awareness.Almost all the surveyed companies reported that the Swedish brand contributes Much/Very much

135、 to their business in India.At present,there is no free trade agreement between India and EU countries.Hence,24 per cent and 26 per cent of the respondents indicated witnessing trade barrier challenges in customs duties and customs procedures areas,respectively.Environmental aspects of products have

136、 started to emerge as one of the key factors impacting the purchase decision-making process of key customers.72 per cent of companies responded that their customers in India consider(fully or partially)environmental aspects of a product or service in their purchasing decision.CONTACT US BUSINESS SWEDEN Anjali Bhola-Project Manager Anjali.Bholabusiness-sweden.se Ankit Tiwari-Consultant Ankit.Tiwaribusiness-sweden.se SWEDISH CHAMBER OF COMMERCE Karan Dua-Programme Manager Karan.duaswedishchamber.in