East European countries expect a big surge in investment by India in the region. Speaking to FE, European Bank for Reconstruction and Development (EBRD) business group director-infrastructure Thomas Maier said, ?Indian companies will make up a significant share of the expected 4 billion euro investment that eastern Europe will get in 2010. This region needs Indian Inc’s contribution for its development and EBRD is playing an important role in facilitating this development.?
Overall investment from Indian companies in the eastern Europe at $44 million as on date has been very small. EBRD is currently discussing specific investment contracts with Indian companies for the eastern Europe. Indian companies have got special expertise not only in physical side of investment, but also in overcoming institutional difficulties, like bureaucratic hurdles which is experienced in emerging markets, he added.
Eastern Europe will become more attractive market for Indian companies because there is a match between capabilities of Indian companies and the needs of Eastern European markets. The region is expected to recover to a 6% GDP growth, from the current level of negative growth, within next one year. “For example, Indian construction companies have a competitive edge in pricing. EBRD has invited exposure to the real estate in the region. It may take some time for recovery in Eastern European market , but there is a market of 450 million consumers in the region which is highly attractive for Indian companies, he said.
The Eastern European markets are having too little supply of services and goods. There is a huge demand for products ranging from white goods to cars in the region, he said . Some of the Indian corporate houses that have shown their interest in investing in Eastern Europe include Span Consultants, Intercontinental Consultants and Technocrats, ICRA and Cranes Software.
Indian banks are also gradually increasing their trade finance exposure for the region. There are eight Indian banks participated in three transactions in the total amount of euro 240,000 so far. The country’s largest lender, State Bank of India has contributed to the tune of euro 902 million as on October, 2009. Similarly, there have been 83 export transactions by the Indian companies which are valued at euro 12.2 million financed since 1999.