India wants to be an important economic player in the Balkans, and Macedonia hopes to serve as the gatekeeper for the country’s investors — opening the doors to the region, and providing access to European markets.
Selling itself as a key player to open the 650 million-consumer European market, the country’s macro-economic stability and low tax regime “present a vital opportunity to explore huge business possibilities,” Macedonian Prime Minister Nikola Gruevski said on the sidelines of the Emerging Investment and Trade Opportunities in Macedonia conference earlier this month.
“Macedonia seeks to open the Balkan and European market for India. The government’s visits to India and other Asian countries shows its plan for the country to become a regional investment hub,” former Macedonian Finance Minister Zoran Vitanov told SETimes.
“The opportunities are two-way and are tremendous — Indian investments will reduce unemployment and allow greater GDP growth. Increasing the presence of Macedonian — and regional — companies on the Indian markets should not be forgotten,” he said.
“We can be a part of [the investment]. We plan to visit Macedonia soon and see up close the opportunities it offers and establish closer business ties. Our relations with Macedonia are old; the time has come to go to Macedonia now,” Subrathi Roy of the Sahara Group company said.
India has 54% of the world’s population under the age of 25, most highly educated, particularly in the field of software engineering. Indians’ purchasing power is growing 12% annually based on competition and profits.
“By investing in the Balkans, India will strengthen its comparative advantage to compete on the European market in heavy industry,” Vitanov said.
Currently, Macedonia exports ferronickel, marble, travertine, parts of railway and tramway locomotives, brakes and other similar tin joints, goods for further treatment and other products to India.
Macedonia’s imports from India — copper products, products of zinc, agricultural and forestry tractors, oil seeds and berries, coffee, pharmaceuticals, ferro-silico manganese and non-organic chemicals — are growing at a high rate.
Another area of expansion is medicines as imports from India — the number has tripled to $1m since 2007 due to the low cost.
The biggest Indian regional investment is in Serbia — a 25,000 metre IT park in the Indjija municipality worth $600m. The park’s construction was announced in 2007, but was halted because of the global economic crisis.
The investor, Embassy Group, announced plans to continue and finalise the project soon. Group officials said the park will employ 25,000 people — companies like Microsoft, IBM, Yahoo, HP, and Fideli will have offices there.
“The entire region will benefit from the entry of another major investment player, most importantly in terms of employing skilled youth, as well as lowering prices and increasing the quality of goods and services. This will particularly be true of the IT sector in which Serbia can attract regional specialists if the investments go through,” Boban Radoevic, head of the consulting firm Bombaks, told SETimes.
Businessmen in Macedonia agree that the investments are a win for everybody.
“Investments are welcomed, no matter where they come from. The EU states hesitate and do not invest in Macedonia, so we open the doors for other countries. We expect some significant investments from India as well as Malaysia, China and Russia,” businessman Vladimir Krstevski, who imports textiles from India, told SETimes.
In September 2011, the Manderson group was the first Indian company to enter the Macedonian market. The company’s 12m-euro investment is expected to provide 140 new jobs in Skopje, between its two plants that will produce parts for rearview mirrors.
The products will be sent to European car manufacturers.
During his visit to India earlier this month, Gruevski also launched talks with Indian Prime Minister Manmohan Singh on a Double Taxation Avoidance Agreement, which will facilitate the exchange of banking and tax-related information between the two nations.