class = “sc-cffd1e67-0 iQNQmc”>
India is on the fast track. Last year, it surpassed China as the most populous country. Approximately 1.43 billion people live in the subcontinent. That’s more than one-sixth of the world’s population.
And the economy is also improving. He quickly recovered from the shock of the 2020 pandemic. It is growing at around seven percent per year and is therefore significantly faster than the Chinese economy.
Due to trade disputes between China and the United States and rising wages in China, Western companies are increasingly shifting some of their production to India or looking for big business in a huge sales market. «India’s middle class is growing and its purchasing power is increasing; There are ample opportunities for you to establish your own branch and have a local presence. And ideally, to be able to produce cheaply locally,” says Florin Müller, head of the Swiss Business Center in India.
Young and democratic
Companies also want to secure their supply chains and reduce the dependence of Western states and companies on China, known as the “China+1” strategy. “But India is important enough for Western and Swiss companies simply as a sales market and production location,” says India expert Müller. This isn’t just about minimizing risk related to China. But about the opportunities that exist in India. So is India the new China?
In many ways China is actually better. India is not a single-party communist state like the People’s Republic. “If you compare with China, Switzerland and India are democracies and that ties them together,” Müller says.
The population is also young; half are under 29 years old. On the other hand, the average age in China is 39, and in most western industrialized countries it is over 40. India benefits from the demographic dividend, which they call development increase, due to its favorable age structure.
Not only are people older on average in China, but the market is also more saturated. The country, whose per capita income exceeds $12,000, has caught up with industrialized countries. China has developed the country over the last few decades and is currently sitting on a mountain of debt. India, on the other hand, is facing a growth spurt due to delayed investments in infrastructure. These comparisons help us understand why there is so much potential in India.
Federal government sees huge potential for Switzerland
For the Federal Council, this is enough to make India a core country in its export strategy. Negotiations on a free trade agreement have been going on for years. According to Economy Minister Guy Parmelin, the project is nearing completion.
In addition, last year the Federal Council identified several major projects for the export industry, such as incineration and desalination plants, airports, railway projects and much more.
However, companies need to implement this. After all, it’s not just about potential, it’s about tangible sales. Here too, the figures are impressive: the total expenditure of the Indian state in the 2024/2025 fiscal year amounts to $620 billion. This means not only financing ongoing expenses for the population, basic services and the security of the country. Infrastructure will also be expanded, research, development and education will be promoted and ambitious climate targets will be achieved.
These are areas where Swiss companies can score. Their offerings range from toilets to cleaning robots, wiring harnesses to insulin pumps, automotive parts, textile machinery and entire trains, to name just a few products.
Opportunities are also increasing for Stadler Rail
Swiss companies can search practically throughout the country and when looking for suitable customers, consumers and projects they almost always find what they are looking for. Many new companies are gaining a foothold, while others have been there for years. There are a total of around 330 Swiss companies across all sectors represented in India. And new ones are added all the time.
Huber+Suhner has been operating and selling cables in India for thirty years. The two largest customer groups are Indian telecom companies and state railway company Indian Railways. Indian state railways will receive the bulk of planned government investments. In addition to the existing 126,000 kilometers of rail, 5,000 kilometers of new rail will be laid. This requires more trains and old ones need to be replaced.
No wonder train manufacturer Stadler Rail has long targeted this market. No success so far. The company missed an express train order last year. In January, a delegation from the Swiss Rail Industry Association (Swiss Rail) along with about ten companies met the Indian Railway Minister. Just a month later, there is a signed declaration of intent between Switzerland and the Indian Ministry of Transport.
India is also interested in Switzerland’s know-how in rolling stock and efficient traffic planning, as well as the experience gained in the construction of the Gotthard Tunnel. So Stadler Rail still has a chance.
For Swiss companies, the money is not only in railway construction, but also literally on the road. Tata and Mahindra are among the world’s largest automobile manufacturers. Winterthur-based Autoneum supplies components for this sector worldwide, including in India, with facilities in Behror in the north and Chennai in the east of the country.
Toilets from Geberit
New hygiene and climate standards open the door for many Swiss companies. Sanitary ware manufacturer Geberit speaks of a “structural trend towards higher sanitary standards” and a “favorable market environment” and has a joint venture and a factory in India. Kitchen manufacturer Franke also supplies fittings to India and has a factory locally. Just last year, St. Gallen-based Cleanfix has established a factory for cleaning robots in India. Among other things, the company is also supplying the airport project in Noida, a massive project signed by Switzerland.
Flughafen Zürich AG is building one of the largest airport projects in the north of the subcontinent and south of the capital Delhi, with new terminals with a capacity of twelve million passengers, runways and the country’s most important economic zone. Investment volume: 750 million francs. Noida International Airport is planned to become operational by the end of this year.
Textile machinery manufacturer Rieter recently attracted attention by acquiring its local business in India twice. Medical technology company Ypsomed produces syringes and blood glucose meters for diabetes treatment. India is a big sales market for this because diabetes is common in the country.
The list of successful Swiss companies in India goes on. Developments in India are also promising. But when it comes to the importance of doing business with Swiss companies, India is still a long way from a new China. The gap is huge.
Different dimensions of economies and foreign trade mean a lot on their own.
China’s GDP in dollar terms is five times greater than India’s. Even if India grows faster, the IMF predicts that the gap will only gradually close.
Switzerland’s bilateral trade with China is almost ten times more important. Excluding precious metals, annual exports to India fluctuate between 2 and 3 billion francs.
The reason for this is high tariffs. India has the highest trade barriers among major economic powers. Until 1991, India was essentially a closed economy and was opened only later. This opening process is still ongoing. “Like many other countries, India pursues its own interests and chooses the sectors from which it will benefit the most,” says Müller.
Prime Minister Narendra Modi’s Make in India strategy also follows this logic. In some areas, especially in the industrial sector, if you want to participate in public tenders, the rule that at least 30 percent of the added value must be domestic is valid. The mandatory share of value added varies by sector. This is encouraging Swiss companies to set up assembly plants in India.
Another reason why Swiss companies prefer to gather in India instead of producing at the lowest production level is the lack of a comprehensive vocational training system as in Switzerland. This means that the majority of major components are still manufactured in Switzerland, shipped to India and assembled there. Switzerland has polymechanics, India has plumbers and engineers. And buyers of Swiss products.
Clearly, India is becoming increasingly important and indispensable to Western sectors and industries. But the constraints to further integration are also increasing. “Making in India” is just one aspect. This is particularly concerning for the pharmaceutical industry due to patent protection. On paper, India is fully compliant with Trips and WTO. However, there are deficiencies in the implementation of laws and rules. There is a lot of bureaucracy and weak management.
A free trade agreement would therefore be even more important for Switzerland. “A free trade agreement could reduce tariffs or ideally eliminate them altogether, making Swiss exporters exporting to India more competitive domestically compared to competition from the EU, for example,” says Dominique Origin, lecturer and co-director of the centre. Global Competitiveness in ZHAW. However, the deal is not finished yet. In case of a referendum, the last word belongs to the nation.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
