By Chris Graeme
PORTUGAL IS once again sending out its ships in search of new opportunities, only this time it’s not about discovering new lands but tapping into new markets.
President of the Republic, Cavaco Silva, is not the first Portuguese president to visit India and no doubt he won’t be the last, but this time the goal posts have radically changed from the wooden boxes, spices and textiles that traditionally came in from the Asian sub-continent.
Booming
Portugal, along with most other European Union countries has woken up to the fact that the Indian economy is booming.
It started with the call centres and cheap electronic and computer component factories, then followed the highly trained computer programmers and the research and development ‘Silicon Valley’ towns, which have sprung up in an around Bangalore.
Both Europeans and North Americans have finally realised that in the last year-and-a-half alone Indian multinational companies have invested a whopping 10 billion US dollars in foreign mergers and acquisitions.
According to economist and author of Made in India, Ashutosh Sheshabalaya, India is set to be the world’s next economic giant and superpower.
Cavaco Silva and his cortege of businessmen can see that potential and wanted to use the official state visit, which ended on Wednesday, to drum up business between the two countries and establish links at diplomatic, economic and trade levels.
During the 1990s a whole range of economic reforms were set in motion by the Indian government, which are being continued by the present Prime Minister, Manmohan Singh, which have been transforming India from a largely rural and backward economy to a giant in electronic and micro-chip technologies.
According to a report compiled by the consultants Accenture, the Indian economy has doubled since1991 alone.
Today, India is the 10th largest economy in the world, with annual total trade worth 796 billion dollars.
The income of the average inhabitant has doubled in the past 10 years, while the number of families with a minimum annual income of 10,000 US dollars is rising at a rate of 20 per cent a year, according to consultants McKinsey.
Increase
India has also enjoyed the largest annual increase among Pacific-Asian countries in 2006, increasing at 13.8 per cent and is expected to shoot up between 12.3 and 15 per cent this year.
Apart from this, Swiss investment bank, Crédit Suisse, estimates that in 2007, economic growth in India will outstrip China by around 10 per cent.
The Indian economic boom has been attracting hundreds of multinational companies and this is hardly surprising since the Indian market offers innumerable advantages – not just economic growth and a vast number consumers.
But what of trade between Portugal and India? In 2006, India ranked only in 52nd place in the tables of countries doing business with Portugal.
In the first nine months of that year, Portugal exported 21.5 million euros against imports worth 182,1 million euros from India.
Even so, despite the disparity, the number of Portuguese companies exporting to India has grown since 2000, from 198 to 349. While the number of importing companies has shot up from 1,163 in 2000 to 1,620 in 2004.
Not surprising then that Cavaco Silva and his team of business leaders can see a pot of gold at the end of the Indian rainbow.
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