Austria
(Source : Embassy of India, Vienna)

Significant trends in trade and investment

Trade in Goods & Services - The year on year rise in trade between India and Austria has shown an upward trend. In 2017 Austria-India bilateral trade stood at 1.79 billion USD whereas in 2018 it stood at 2.08 billion USD. In 2019, bilateral trade between India and Austria was 2.16 billion USD with an increase of about 4%.

(Sources: Statistic Austria)

Investment - The Foreign Direct Investment (FDI) from Austria to India stood at 754 million Euro for the year 2019. In 2018 the Austrian direct investment in India was at 645 million Euro. There has been an increase of around 17% in FDI from Austria to India in the year 2019.

Indian investments towards Austria stood at 333 million Euro for the year 2019. In 2018, FDI from India to Austria stood at 309 million Euro. There has been an increase of around 8% in the year 2019.

(Source: Austrian National Bank)

Colombia
(Source : Embassy of India – Bogota)

Potential products of Colombian imports from India –

Commodity (871120) - Motorcycles (including mopeds); parts and accessories are crucial for Colombia as local production of vehicles has been increasing in the past few years. Colombia is the second country in Latin America with the most developed motorcycle industry: not just in production and assembly, but also in marketing. There is a great opportunity because of the Geo-strategic position of the country to become a hub for the markets in Central and South America.

Commodity (870899) - Vehicles parts and accessories is an important sector inside the automotive industry because it covers the needs of more than 250.000 cars and 550.000 motorcycles, which are sold in Colombia. The growth of this industry means a good economic development for the country. Therefore, it is important to promote the trade relations between these countries. For this reason, they purchase Vehicle parts and accessories; n.e.c. in heading no. 8708.

Commodity (870829) - Vehicles; parts and accessories, of bodies, other than safety seat belts. India has become an important producer and supplier in the automotive industry, showing its potential to attract new trade partners around the world. For this reason, there is a high demand in Colombia for vehicle accessories due to its quality and efficiency. Also, vehicles parts and accessories are important because it covers the needs of more than 250.000 cars and 550.000 motorcycles which are sold in Colombia.

Commodity (870322) - Vehicles; with only spark-ignition internal combustion reciprocating piston engine, cylinder capacity over 1000 but not over 1500cc. As mentioned about, automotive industry in India has become an important supplier, the quality and potential allow that countries such as Colombia prefers the purchase of these products from India.

Significant trends in trade and investment –

Trade in goods - According to the monthly trade survey (EMC, Spanish acronym) from DANE, in April 2020 the sales from retail trade decreased 42.9%. According to the DANE’s director, this negative outcome is the largest decline in the last six years due to the present worrying situation by the COVID-19 pandemic. Products such as automotive fuels, cars, motorcycles, clothing items, and textiles have presented a decrease that affected retail trade sales. Automotive fuels had a variation of -54,1% and a contribution of -11,5%. Motorcycles and vehicles had a variation of -94.4% and a contribution of -8.8 %. Between January and April 2020, the retail sales decreased by 7.0% and goods with a negative contribution were combustibles with -3.2% and vehicles and motorcycles with 2.3%. On the other hand, goods such as household cleaning products and food had positive outcomes with 3.5%. This can be explained by people’s needs and preferences regarding this negative situation where they prefer to purchase basic goods such as food instead of other goods.

Analysis - Unfortunately, due to the COVID-19 pandemic and lockdown implemented by the National Government, the retail sector has been affected and it could impact these types of business. For instance, the demand for gasoline and diesel have decreased. The Mines and Energy Ministry announced that during these months until 29 April 2020, fuels have reduced their demand by 41% and 30% for diesel. It is important to know that

combustible distribution inside Colombia is led by fourth major companies such as Terpel, Biomax, Primax, and Chevron (Texaco) which at the national level supply more than 90%. Also, according to the National Sustainable Mobility Association (Andemos, Spanish acronym) announced that during April the vehicle sales recorded a significant drop by 98.9%. In April only 217 cars were registered. Furthermore, the motorcycle market recorded a drop by 99.6% with 205 units, in contrast with 48.028 motorcycles which were registered in April 2019. These negative outcomes inside these two important markets have caused a lot of liquidity problems in many companies and as a result, these sectors have been requested financial aid from the National Government. 

Hungary
(Source : Embassy of India, Budapest)

Potential products of imports from India

Commodity - 847330 Parts and accessories of automatic data-processing machines or for other machines of heading 8471, n.e.s.

Rationale – Hungary for the month imported this product from the World in the value of USD 142.6 mln, while imports from India to Hungary were nil.

Commodity - 854231 Electronic integrated circuits as processors and controllers, whether or not combined with memories, converters, logic circuits, amplifiers, clock and timing circuits, or other circuits

Rationale - Hungary for the month imported this product from the World in the value of USD 94.5 mln, while imports from India to Hungary were 0.2 mln.

Overview of General Barriers to FDI in Hungary:

Regulatory barriers and administrative burden are affecting all sectors but particularly energy, construction, and banking: The overall administrative burden, including start-ups, negatively affects investment decisions. The instability of the regulatory framework, with frequent and unpredictable regulatory changes, creates uncertainty for investors and is hindering both internal investment and FDIs.

The Hungarian government imposes a 100% offset requirement for defined sector investments over HUF 1bln (€2.8 mln). Efficiency of procedures in construction and environmental permitting is insufficient, while corruption raises risk for investors. There is no requirement that investors must purchase from local sources, but the EU Rule of Origin applies.

Ownership restrictions (all non-EU)

According to the 2014 Land Law, only private Hungarian or EU citizens resident in Hungary with a minimum of three years experience of working in agriculture or holding degree in agriculture can purchase farmland, which is limited to 300 hectares. All others may lease farmland. All farmland purchases must be approved by a local land committee and Hungarian authorities, local farmers and young farmers must be offered a chance to purchase the land first. Up to 1200 hectares for a maximum of 20 years may be leased.

Price controls in Consumer facing sectors and others considered to be of strategic importance.

The Hungarian government regulates the prices of certain goods, setting the upper and lower limits to which the private sector must adhere. Sectors include energy, pharmaceuticals. Cuts on regulated utilities prices have put considerable pressure on private utilities companies, decreasing profit margins and adding to an increasingly difficult operating environment.

State intervention in Banking, energy, agriculture, media, telecommunications, and retail sectors.

Since 2012 government has invested in state-owned enterprises with the objective of lessening the participation of foreign-owned competitors, especially in the energy sector. Recent additions from 1 Jan 2019 include the chemical industry, the telecom sector, vehicle construction, metallurgy, optics and electric equipment production, the defence industry, water and sewage management, the financial sector, food industry and agriculture, production of construction materials, state administration, health care, wage management, transport and tourism sectors. Foreign investors in the targeted sectors have expressed concerns that the tax regime has become unpredictable and the additional levies appear to have been aimed against some industries with a high level of foreign ownership.

Basic Rules of The Protection of Strategic Assets Concerning Foreign Investments

The European Commission has issued Communication 2020/C 99 I/01 in which it has given guidance to the Member States of the EU concerning the protection of Europe’s strategic assets from the foreign direct investment, ahead of the application of Regulation (EU) 2019/452 (FDI Screening Regulation) which is applicable from 11 October 2020. Hungary first adopted FDI screening mechanisms by Act LVII of 2018 for FDIs violating the security interests of the country, then in the economic crisis caused by COVID-19, further screening rules were adopted for FDIs by Government Decree nr. 227/2020. (V.25.). According to the above, certain transactions concerning Hungarian-seated companies operated in strategic sectors by foreign investors shall be reported to the Minister of Finance and the acknowledgement of the Minister of Finance is necessary for the realisation of the acquisition of the shares until 31 December 2020. These transactions include the acquisition of shares, the increase of the registered capital and the transformation of the company. The strategic sectors specified by the Government Decree include energy, communication, finance, agriculture and food industry, healthcare, construction, transport industry, tourism, IT, mechanical engineering, etc. Those foreign investors that have shares in a company registered in the EU, European Economic Community or in Switzerland shall only report the transaction if majority interest will be acquired indirectly. Conversely, the foreign investors wishing to acquire shares in a Hungarian company directly has to report any transactions by which the foreign investor would acquire shares at a ratio of at least 10% and the value of the investment is at least 350 000 000 HUF (appx EUR 1 mln). The Minister of Finance has 45 days or in specific and duly justified cases 60 days to decide on the acknowledgement of the transaction. Should the Minister provide a negative decision, then the exact reason of the prohibition is not required to be mentioned. The review of the prohibiting decision can be initiated at the Metropolitan Court.

Banking, agriculture, defence and energy

The Hungarian government has publicly declared that reducing foreign bank market share in the Hungarian financial sector and tightening regulations governing NGOs are key priority areas. Several state-led initiatives over the past several years targeted the banking sector and reduced foreign participation.

Significant trends in trade and investment

Trade in Goods Hungarian imports from India - The value of imports decreased by 13.1% in the Jan-April period of 2020 over the same period of 2019 reaching USD 150.2 mln.

8411 Turbojets, turbopropellers and other gas turbines - The product group increased by 133.4% in the Jan-April period of 2020 over the same period of 2019 to USD 8.9 mln. It represents 5.9% of Imports from India to Hungary.

8473 Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of heading 8469 to 8472, n.e.s. - The product group fell back by 39% in the Jan-April period of 2020 over the same period of 2019 to USD 8.7 mln. It represents 5.8% of Imports from India to Hungary.

8708 Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. - The product group increased by 43.9% in the Jan-April period of 2020 over the same period of 2019 to USD 6.4 mln. It represents 4.3% of Imports from India to Hungary.