Ireland and India have many things in common including history, language and values. But despite that, trade and business between the two countries has remained well below its true potential, writes NilaKanthi Ford.
The economy of India is the 10th largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). There are huge opportunities for Ireland as India seeks to develop 100 smart cities and modernise its transport infrastructure. By working together, both countries can leverage valuable skills and expertise from each other. There are, however, some key issues that need to be addressed in order to capitalise on these opportunities.
So how can businesses and the two governments improve Irish-Indian trade relations? One way to raise awareness of the trade possibilities is to raise the priority of India as a destination for international trade at the highest level in Irish Government. Representation from companies with significant business interests in India should be included on the Global Irish Network Advisory Group. With the fourth Global Irish Economic Forum taking place in November, this is an ideal time for discussion and debate on how Ireland can leverage the opportunities that India can offer.
Ensuring that there is a trade delegation with representation from the highest level in the Irish Government is essential. We have recently had a visit from India’s prime minister, Modi, which was a significant coup for Ireland Inc – not least because this most senior representative of a growing superpower has visited very few European countries. This visit should be reciprocated in 2016 as we move to the next steps in bilateral discussions.
There should also be an increase in the number of sectorial-specific trade initiatives. There are potential bilateral opportunities around aviation and aerospace, ICT, energy, infrastructure and agri business, education and pharmaceuticals as well as tourism. Ireland’s aviation and aerospace sector is uniquely placed to add value to India’s growing economy.
More than 90% of the world’s aircraft are leased out of Ireland. Europe’s busiest airspace is over Ireland. Ireland is the first stop into Europe from the USA.
These three aspects alone have generated a burgeoning sector of supporting industries in satellite navigation, aircraft maintenance, new technologies and airport development. India is seeking to build 200 new airports and is opening up its aviation market. These industries from both countries working together will generate significant opportunities.
India is seeking to build 100 new smart cities across the country. Ireland’s infrastructure development capability, combined with its IT innovation, will add value to partnerships in India. Companies like ESB International have over 40 years’ expertise in exporting Irish talent.
There is huge potential for Irish grown expertise in India, particularly in the cleantech and renewables sectors: opportunities in this sector could take hold by leveraging Ireland’s expertise in green energy.
We need to develop greater awareness and training around cultural diversity. While Ireland and India share many things in common, in business there are significant barriers and some misperceptions to overcome.
ROUTES TO MARKET
The size of each market is different: Ireland’s population is 4.5m, compared with India’s 1.2bn population. The routes to market are different – negotiations follow a less direct process, and the sales process and cycle are different. One is a formal culture, the other is highly informal.
By understanding the nuances and connections within India, Irish business can make the process of working with Indian businesses less complex. There should be greater government funding towards preparation and training for potential exporters to India.
We should also consider capitalising on the Irish-educated Indian nationals working all over the world. There are currently over 1,000 Indian nationals studying at Irish higher education institutes. These students, and their predecessors, have a unique cultural and educational experience of Ireland. They are well networked and academic institutions and industry should collaborate to exploit these connections for the benefit of both countries.
Ireland is one of the most open and globally connected countries in the world. A central hub for travel, Ireland is the closest EU country to the US with frequent flights, and all European business centres are a maximum of three hours away by frequent, low-cost flights.
A large number of the Indian companies that have made investments are interested in Ireland because of the tax incentives, the position as an English-speaking country in the eurozone and the links with the US. The growing hub of global IT names based in Ireland is a great attraction for Indian ICT companies.
There are huge opportunities for Ireland as India seeks to develop 100 smart cities and modernise its transport infrastructure
Ireland staked its aviation future on a web of international tax agreements, low corporate tax and world-class aviation financing expertise. The country has been one of the pre-eminent jurisdictions for aircraft finance and leasing for almost 40 years. There are around 20,000 large commercial jet aircraft flying in the world at this moment. Of that number, some 8,000 are leased and half are managed out of Ireland.
There are competitive threats from countries such as Singapore (leasing), which is geographically closer to such key emerging and growth markets. However, there is an opportunity for Ireland to challenge this competition if it gets ahead of the curve.
Already, in recent years the ordinary image of the industry has been transformed into something with significant potential, as Irish-based firms have landed billion-dollar merger deals and some of the biggest players in the industry are moving towards IPOs.
There are some large figures forecast for Indian tourism into Ireland. This will inevitably grow now that there is the visa agreement with the UK, which allows visitors to either country to enter each other’s territory.
Culturally, Irish hospitality needs to gear up for the Indian culture. There are all sorts of key areas to be aware of, not least of which is the large number of vegetarians in the Indian population.
India has yet to realise its tourism potential. However, the ‘Incredible India’ initiative is starting to explore its global reach. Again, India as a destination location for business or tourism is really under-played in Ireland: there needs to be a greater public awareness of the country and its opportunities.
ABOUT THE IIBA
Founded in 2008, the Ireland India Business Association (IIBA) plays an important role in supporting and representing its member companies from India and Ireland to expand their horizons into each other’s markets by providing advice, assistance, and enabling access to international connections.
Today, the IIBA is the leading representative business and networking organisation in Ireland for companies interested in the Indian market and vice versa. As a member-driven non-profit organisation, the IIBA facilitates knowledge-sharing and collaboration between both business communities.
The IIBA currently has chapters in Dublin and Cork in Ireland as well as Mumbai in India. It has a goal to open new chapters in Delhi and Bangalore in India in 2016 and is growing a number of sector specific, action-oriented membership forums in areas such as aviation and aerospace, ICT, agri-business, pharmaceuticals and tourism.