Indian SMEs Freeze on Iceland
Iceland's mixed economy is characterised by a free market system, low inflation and well-developed infrastructural facilities. The country's economy is largely export-driven and marine products form a bulk of exports from Iceland.
Owing to its business-friendly environment, conducive for growth and expansion, Iceland has emerged as a preferred trade destination for Indian SMEs.
In the last decade, Iceland recorded impressive economic growth rates coupled with low unemployment and a steady increase in foreign direct investment (FDI). The country has a business-friendly tax structure that enables it to attract overseas players.
Trade relations
India and Iceland share cordial trade relations. In 2007-08, total trade between the two countries stood at around $17.55 million.
India is a major exporter of organic chemicals, textiles, pharmaceuticals and metallic products to Iceland. Alternatively, Iceland exports cod oil and textile fibres to India.
Although both countries have pursued an aggressive trade strategy to strengthen their bilateral relations, Industry Experts feel that there is immense scope for mutual cooperation that is yet to be explored.
Areas where Indian SMEs can break the ice
Indian SMEs can make inroads into the food processing industry in Iceland as it has tremendous potential but is progressing at a slow pace. Iceland, a major exporter of marine products, is keen on developing its food processing sector.
Indian SMEs can therefore capitalise on this opportunity by setting up their manufacturing units in Iceland. They can further establish trade linkages with local marine products exporters to procure raw materials at cheaper rates.
Likewise, Indian SMEs can tap Iceland's pharma market by exporting drugs and Pharmaceutical Chemicals Products at competitive rates. Other potential areas that can be explored by Indian SMEs for trade and investment include the gems and jewellery, textiles and Information Technology enabled Services (ITeS) sectors.
Indian SMEs may also enter into strategic tie-ups and joint ventures with their counterparts in Iceland to cooperate in areas such as biotechnology and hydrogen energy. Iceland has already gained technical expertise in these domains and can partner with Indian firms for knowledge-sharing and imparting training.
To strengthen their bilateral ties, India and Iceland have signed some significant trade agreements. In 2007, the governments of both the countries inked two treaties to facilitate mutual cooperation. These were Memoranda of Understanding (MoU) on Sustainable Fisheries Development and Bilateral Investment Protection Agreement
About the Author:
David Parks is a well known author and has written articles on Trade Leads, B2B Portal, B2B Products, suppliers, Manufactures and many other subjects.