RAJIVA Misra suggests that there is anecdotal evidence that Slovakia has made it onto the radar of a growing number of Indian tourists: “take a walk in the Old Town [in Bratislava] on the weekend in summer and you will see Indian tourists around”. However, the Indian ambassador to Slovakia adds that Slovakia’s challenge is to figure out how to keep the tourists here longer. With the growing fitness culture in India, Ambassador Misra sees a niche for Slovak entrepreneurs active in the sports-related business to explore opportunities in his homeland, where there is an emerging need for shared experience in the management of sports academies and coaching centres.
The Slovak Spectator also spoke to Misra about the challenges linked to air and water pollution in India, the negotiations on the free trade agreement between India and the European Union and the driving force behind India becoming an IT power.
The Slovak Spectator (TSS): The free trade agreement (FTA) between India and the European Union has been on the discussion table since 2007. What is the current status of the talks and what complications still need to be resolved? When do you expect more progress on the issue?
Rajiva Misra (RM): It is an ambitious enterprise, which, once concluded, has huge potential to transform our relationship in a positive way. But we recognise that trade agreements are difficult propositions and they tend to become more difficult when coinciding with economic slowdowns, employment concerns and slowing growth in trade. The European Union is going through a difficult time and our growth rates have also come down in India, so it is a sort of ambitious negotiation.
Some of the more difficult areas in the negotiations pertain to the market access for European Union-manufactured cars into the Indian market. The EU has been keen on cutting our tariffs on cars. From India’s point of view, we want to look at the non-direct barriers as well as the easier movement of our professionals to provide services in the EU market, which is a priority for us. We are also seeking recognition as a data-secure destination. The EU is also looking at better market access for its wines and spirits in the Indian market. But it’s a process of give-and-take: we are ready to do business and do what it takes to make it right.
TSS: Once signed, how in your opinion will the India-EU FTA impact trade between your homeland and Slovakia?
RM: Better access to auto exports and better market access in India would be of great interest to Slovakia, given that you have such a large auto-manufacturing industry.
TSS: India has developed into a leading IT power. What is the driving force behind this? What challenges has this created for India’s education system and Indian society in general?
RM: The IT industry take-off in India was the result of several factors coming together: globalisation in the 1990s, the ICT revolution, the cult of software and in economic activity in different areas. The fact that English is widely spoken in India gave us access to overseas markets. Some of India’s weaknesses, for example the poor infrastructure, were not really a factor in the development and export of IT services due to the ease of transferring data electronically. So far, our weaknesses have not entered the picture, while some of our strengths did, and that’s how it took off in a big way.
TSS: How did education and an orientation towards the natural sciences fit into India’s IT picture?
RM: The fact that we have a large number of universities, technical institutes and professional institutions training a large number of people in different disciplines - engineering, computer software - was certainly a major factor. I think IT services would have developed even more if our own manufacturing industry had been more mindful; because the IT industry in India has grown essentially on the strength of overseas markets. The domestic market has not been that strong and this is something we will need to grow over the long term, while high rates of growth in the domestic manufacturing sector would be important. A decade ago or so there was a certain euphoria among people, with some even claiming that India is going to skip the stage of manufacturing and transform into a client-oriented and service economy. But predictably enough, this turned out to be unrealistic and we know that manufacturing weaknesses have to be addressed. Also, in terms of generating employment and addressing the problems of India, IT would, at the end of the day, be a small sector since it is not highly employment-intensive; we need to transform manufacturing and agriculture for large numbers of jobs. Nevertheless, the IT industry made people realise that a sector where government has a minimal role can be dynamic often for that reason alone.
TSS: Are there any examples of cooperation between India and Slovakia in the IT sector? Do you see potential for cooperation in this sphere?
RM: There are some initiatives where Indian professionals are active, but the numbers, I have to say, remain small. I cannot see one model having been tried and being seen as the way to go. We lack the critical mass of numbers so far. Given that Slovakia has been attracted to IT companies, both in hardware and in IT services, and that Slovakia itself has high-quality resources, could make for a profitable marriage.
TSS: The Indo-Slovak Joint Committee held its 7th session in Bratislava last July. Was this session notable in any way and if so what was the outcome?
RM: The committee met last year after a seven-year gap, but it was useful and we were able to get some businesspeople to come from India and present their activities. Since the meeting I have seen greater interest from service sectors in India in exploring the Slovak market. For instance, more Indian businessmen are coming to Slovakia to explore possibilities in auto accessories. I cannot however point to a concrete achievement, but what we were looking to achieve is greater interaction, to spark interest in each other’s markets. I think this is happening: there is more participation in trade fairs, there are more business meetings.
TSS: What hurdles in your opinion stand in the way of more intensive business links between India and Slovakia?
RM: From the Indian side, I would say that Indian businesses perhaps have not been adventurous enough to explore the potential of Slovakia.
Nevertheless, there have been substantial Indian investments in other European countries, for example Hungary and even Romania - the countries which have larger domestic markets.
Since the intention is to target the larger EU market, we certainly should have seen Indian investments coming to Slovakia, since they come to the region and they come to areas where I can see Slovakia would have been attractive: IT services and auto accessories, for example. We’ve been trying to send the message out to [Indian businesses] that in terms of operations for the EU market, Slovakia can be a base. Slovakia perhaps needs to market itself more aggressively.
I would also say that an Indian business would look at the region when they plan an investment and say “we need to be in central Europe” and they begin searching for where they will go in that region.
TSS: Rising levels of air and water pollution is an issue of concern in your homeland. What are the causes of this, and how is India addressing these issues?
RM: They are both very serious challenges. There are two major sources of air pollution in India: the first is fuel, while a large number of Indian households use bio-waste, highly polluting fuels, as they don’t have access to other sources of fuel. The second source is auto emissions. The effort has been to provide other sources of fuel, electricity and LPG, but we have a long way to go. As for auto-emissions, since 2005 we adopted emission standards and there has been a conscious effort to promote the use of gas for transportation purposes. Although we have a long way to go, change is happening, and in a few years, air quality in a number of big cities has improved.
The biggest source of water pollution is undetected sewage, which is a huge problem, unfortunately. I was looking at some numbers and the need for sewage capacity for India was set at 30,000 and the real capacity stands at 6,000. But the situation is improving, and if we keep a good rate, 15-20 percent growth every year, it has been said that by 2020 we should have the sewage treatment capacity that we need to have. The second area is industrial waste, which pollutes our rivers, which should be addressed by a much more rigorous assessment of the environmental impact of industrial projects.
TSS: Last September India adopted the Indian National Food Security Act, also known as the Right to Food Act. What are the main objectives of this legislation? Do you foresee problems with its implementation?
RM: It was adopted last September and its aim is to provide food at guaranteed minimum prices to two-thirds of the impoverished in India. We are talking about 800 million people being assured an elemental legal right to access to food at guaranteed prices. Now any Indian who is not able to get access to food at a minimum price can quote the law. The expectation is that the state, local governments, semi-official institutions, everyone involved in the process of procurement and distribution of food, would be under pressure to deliver this. The governments can be called up in court and obliged to provide food, and those who are eligible can go and demand cheap food from the government shop. We’ve had public distribution of food at subsidised prices in India for a long time, but the biggest change is that it has now been legislated, and is therefore enforceable through a legal act.
TSS: Have opportunities for economic cooperation between India and Slovakia been fully tapped? In which sectors do you see room for further development? How do Indian investors view Slovakia as an investment destination?
RM: Traditional manufacturing areas, I would say, auto-accessories and pharmaceuticals, are two areas where we should be doing more. We should be able to bring Indian generics into the Slovak market. Especially with the public health system facing a resource crunch here, the procurement of Indian generics would be beneficial. We have a broad-based auto accessories industry which has so far not looked at tie-ups in Slovakia. Then there is tourism and tourism-related fields, for example wellness, because there are traditions in both countries. Then also sports, given the strong physical culture in Slovakia. With the growth, fitness culture is coming up in India, with the need for sports academies and coaching centres to be more professionally managed and Slovakia does have the human resources.
TSS: India is a popular destination for Slovaks. What are the recent trends in tourism between Slovakia and India?
RM: Given that Slovakia is a small country, you don’t want tourism to damage the environment, so you are not targeting large numbers. I think you have to target high-end tourism from India and look at Piešťany as one of the possible niches to attract Indian tourists.
The numbers are going up and there is even anecdotal evidence: take a walk in the Old Town on the weekend in summer and you see Indian tourists around. But the challenge for Slovakia remains to keep tourists here in Slovakia longer, because most Indians spend less than a few hours here.
TSS: Several aspects of the Indian culture are not unknown to Slovaks. However, recently there were fewer performers and artists from India than couple years ago. What is the reason?
RM: For the past two or three years we have faced a major resource crunch in the Indian Council for Cultural Relations, which has been the main official agency active in India in sending cultural troupes to foreign countries. Performances in Slovakia dried out because of the lack of these resources, while we were asked to explore to see if ticketed performances can be held. Some performances are held, but I must say this remains a challenge. As for the Slovak audience, Slovaks are extremely receptive and I have always seen Slovak audiences as very disciplined; even when they are attending for the first time a classical Indian dance performance, or a classical Indian instrumental music performance, they are very responsive.