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India has one of the biggest markets for trade in the world. Over the past two decades, the demand of Swedish expertise has increased in India. Thus, mutual economic interests have become the driving factors of the Indo- Swedish Trade
Foreign Direct Investment Ratio between India and Sweden
Sectors that attracted maximum FDI equity inflows from Sweden
India has been an important trade market for Swedish brands since 1950s, and thus the growth of mutual relationships has been based on benefits for both the countries. Various leading Swedish companies have established manufacturing in India.
Leading Swedish Companies in India
The last decade has been year of growth for the Information Technology industry in India. With increasing value and reach, more 70 leading Indian IT industries invested in Sweden markets.
Leading Indian Companies in Sweden
India’s ranked at 63rd position in 2020. The country’s ranking on the World Bank’s Doing Business Report (DBR) of 190 countries, has improved from 142nd position in 2014 to 63rd position. It has earned a place among the world’s top 10 improvers for the third year in a row.
Trade across Borders: India has simplified starting a business by incorporating electronic memorandum of association and articles of association. India currently ranks as a substantial nation for cross border trade and business investment by the World Bank Cross border trading has now been simplified with the start of post-clearance audits, upgrading port infrastructures, and enhancing the electronic submission of documents.
Custom Clearances: The Central board for excise in customs (CBEC) has simplified Indian customs single window project to facilitate trade. This enables one step submission of custom clear documents on an online portal. Only three mandatory documents are required for customs purposes. Computerized transactions have reduced risks and created a simplified system wherein, chances of inspections have been reduced.
Infrastructure Development: There has been an increase in infrastructure development projects due to reduction in the time and cost of obtaining construction permits. Various municipal corporations in metro cities of India have developed a fast-track approval permit for building projects. Cost of obtaining construction permits has reduced from 23.2% to 5.4% of the economies per capita. These provisions were enabled to ease the process of doing business in India and reaching out to investors around the globe.
Resolving Insolvency: Issues like resolving insolvency have been made easier by promoting reorganization proceedings in practice. As a part of Ease of Doing Business in India, the country has strengthened access to credit by amending its insolvency law. Secured creditors are now given absolute priority over other claims within insolvency proceedings.
As a part of ease of doing business in India, the country has strengthened minority investor protections by increasing the remedies available in cases of prejudicial transactions between interested parties. India made enforcing contracts easier by introducing the National Judicial Data Grid, which makes it possible to generate case measurement reports on local courts.
Paying Taxes: To promote ease of doing business, India made paying taxes easier by replacing many indirect taxes with a single indirect tax, the GST, for the entire country. India also made paying taxes less costly by reducing the corporate income tax rate and the employees’ provident funds scheme rate paid by the employer.
The Employee State Insurance Corporation (ESIC) has developed a fully online return filing with online payment. Due to the introduction of e-verification system, there is no physical touch point for document submission with the income tax authorities.
Business Reform Action Plan (BRAP) 2019 – 372 new action plans were introduced under the BRAP 2019. It included new sectors such as Healthcare and Hospitality, Central Inspection system, Trade License, Registration under Legal Metrology, and Registration of Partnership Firms & Societies. This reform includes the future plans and growth of previous plans by the states and union territories in India.
The Government of India has worked on creating a conducive environment by streamlining the existing regulations and eliminating unnecessary requirements and procedures to help businesses grow. The focus is on reduction in compliance burden by using technology, third party assessments, and faceless human intervention.
India and Sweden are actively participating in various dialogues to enhance bilateral trade.
Smart Cities Program in India: After various delegations and visits by the Indian government in Sweden, the two countries have decided to work together for the smart cities program in India. The Swedish companies will invest in India’s Public Private Partnership model (PPP). The Swedish government is working on projects that can help develop climate neutral infrastructure in India.
MoU on Cooperation in the field of Sustainable Urban Development: Based on the agendas of the United Nations Conference in Rio de Janeiro in 1992, India and Sweden signed a MoU to benefit the urban development in both the nations. Urban development will include infrastructure and other facilities. This MoU is beneficial for both the countries due to the existence of growing technology and possibility of investment between India and Sweden.
World Trade Organization - Dispute Settlement Body
The World Trade Organization is the only international governing body that decides the rules of trade. There are various WTO agreements signed by hundreds of nations, which form the process of trade between those nations. They aim to ensure a smooth flow of trade and provide free trade possibilities. WTO has a dispute settlement body that ensures if any trade related disputes arise, they are dealt within the organization and a free flow continues. The Dispute Settlement Body (DSB) acts as a general council for disputes settlement for its member countries. India is a leading signatory of DSB and has resolved various minor and major disputes through the DSB.
India Sweden Dispute resolution
India and Sweden have always actively participated in innovation and technology enhancement agreements that benefit both the countries. These agreements facilitate exchange of technology and increase trade in the IT sector.
MoU on Intellectual Property: The MoU on Intellectual Property between India and Sweden was signed in 2017. It is a wide ranging agreement that aims to create a flexible mechanism of exchange of IP practices and conduct training programs. The goal is to increase technical changes and raise awareness.
Benefits of the MoU on Intellectual Property
Nobel Week 2020: The Sweden India Nobel Memorial Week took place in 2020, during the pandemic. This was a step that reflected commitment to support and mutual growth even during such harsh times. The Indian and Swedish trade ministers got into contact with each other through several virtual meetings on deciding how to enhance trade and investment in IT and Infrastructure sectors during the Nobel Week. 200+ Swedish CEOs have moved forward with investment in Indian markets after this event.
Double Taxation Avoidance between India and Sweden
The Double Tax Avoidance Agreement (DTAA) was signed between India and Sweden. The agreement was amended to make way for free trade and bilateral exchanges. The agreement covers tax residents of Sweden and India. It covers income tax earned by the residents of both the nations. The agreement does not apply to shell companies, the shell companies are mere non-operating bodies with no real or contentious business activity records.
Any Swedish company that has a permanent establishment in India; the profit attributable to the permanent establishment will be taxed only in India. And the same process will apply to any Indian company established in Sweden.
Sweden India – Top Sectors of Export Import
India and Sweden have come together and invested in various money transaction options for their residents. This enables hassle free monetary exchanges in business transactions.
Banking/Money transfer services between India and Sweden
Foreign Office Consultations (FOCs): India and The Netherlands hold foreign office consultations regularly to boost trade and commerce between the two nations. These meetings always result in new reformed norms of international trade. The goal is to capture the latest trends of trade and include new policies/norms accordingly. The most recent FOC was held in 2019 in India. The two countries decided to support each other as members of the United Nations and focused on enhancing economic ties.
Dutch Interest in India: In recent times the Dutch business has increased in different sectors in India. The Dutch government has identified few sectors of focus that they look forward to increase business and cooperation in.
Custom Treaty 2019: India and the Netherlands recently signed the customs treaty to boost trade. The treaty focuses on altering custom rules specifically for Netherlands and simplifies trade relations with them. Benefits of the new customs treaty:
The client’s satisfaction is evident from years of their association with us, more than a decade for a lot of them. We act as an extension of in-house legal teams and act as External Legal Counsel to you. Our efforts are towards being strategic partners in your growth and not to be just a law firm.
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