Increasing bilateral trade and investments is guided by the shared aspiration of multilevel economic development and willingness among the leadership. It’s time now that the countries invest in each other even more than in history.
India-Romania bilateral ties, formally established in 1948, have witnessed a steady growth. The bilateral relations between the two countries are not confined to just diplomatic connect, the countries have significantly invested in each other, host a good number of expatriates on India and Romania soil, and have maintained meaningful cultural ties. The two countries maintained friendly and cordial relations, culminating in the celebration of 70 years of diplomatic ties in 2018. Since the 1989 revolution in Romania, which overthrew the communist government, both countries have steadily increased trade and investments in each other. Increasing bilateral trade and investments is guided by the shared aspiration of multilevel economic development and willingness among the leadership. It’s time now that the countries invest in each other even more than in history.
Brief Diplomatic History
India and Romania made a formal diplomatic connection It may be noted that bilateral trade between India and Romania, from 1959-1992, was conducted based on a clearing system. An Agreement on Trade and Economic Cooperation, granting mutual Most Favoured Nation (MFN) status to each other was signed in 1993. Trade-in hard currency was also concluded in the same agreement. To push trade and economic cooperation further, the Joint Commission and Joint Business Council (JBC), held at the level of businessmen, was replaced allowing the Joint Economic Committee, organised at the government level, to decide on the same. While bilateral trade, since the 1990s, was cyclical, mainly due to factors beyond India’s and Romania’s control, officials from both sides have made efforts to keep the curve upswing. Since 2013, the trade volume has been around US$ 600-800 million; both sides expect this figure likely to touch the one billion mark soon. Leadership from both countries has emphasised building the tempo and taking the next leap.
on 14 December 1948 and since then there has been no looking back. By November 1968, the countries went on to elevate their delegation-level connect to the embassy level. While Romania opened its diplomatic mission in New Delhi in 1955, India opened its office in Bucharest in 1959. Romania has an honorary consulate in Chennai and India has in Timisoara. At the multilateral level, India and Romania have extended support to each other at the UN.
Trade and Investments
Romania has in the past collaborated in projects involving petroleum, petrochemicals, power, and metallurgy industries in India. The east European country was engaged in oil refinery projects in Assam and Bihar. Romania also shared their technology know-how for a thermal power plant in Singareni, the Mangalore pellet plant, the Durgapur steel plant, and a Hyderabad tractor plant.
Trade Basket
The trade basket of the two countries includes a wide array of items, from agro-products to engineering products. India exports electric machines, including devices and equipment, metals, chemical, and allied industries products, plastic and rubber materials, textiles, food products, beverages and tobacco, vegetable products, paper and cardboard, semi-precious stones and artifacts, cement, ceramics, glass and optical, photographic, cinematographic, materials, and medical instruments and devices, to Romania. While Romania exports the following items to India – vehicles and their parts, Iron & Steel, organic and inorganic chemicals, rubber, and plastic items. Priority areas to collaborate in the future, as identified by officials include, the pharmaceutical industry and medical devices, agriculture and agricultural products and devices, automotive parts, engineering goods, iron and steel, chemicals, rubber. New areas of trade that are being explored include laser-based technology for India especially for its vibrant medical and avionics industries, IT and software, oil exploration, and drilling.
What does Romania offer to Indian businesses?
Romania is a European Union (EU) member. Setting up an office in Romania allows Indian companies access to the larger EU market. The strategic location of Romania helps Indian companies to access both East and West Europe. Romania has a dense educated and professional working population, and the competitive market will attract Indian IT and other knowledge- based companies to set up offices in the country. Romania is also a natural resources-rich country – with deposits of petrochemical, gold, copper, zinc, iron, silver, and uranium. The country is dotted with forests and rivers, which can be harnessed by Indian infra-companies to generate power.
Romania is expected to grow at a rate of 7.3% in 2021, according to the World Bank. This is one the highest among the EU countries, despite the COVID-19 pandemic. Multiple reports also suggest that the Indian economy is also recovering well after the pandemic. These existential conditions allow leaders to take the next leap to broaden trade and investments.
Bilateral Investments
Indian giants such as Wipro, Dr. Reddy’s Labs, Sun Pharma, Sunwave Pharma have set up offices in Romania, and have a substantial presence in Romania. In April 2021, IT major Wipro bought METRO Systems Romania SRL. Investments to India that were directed from Romania are made by: Atlantia SPA, Saira Seats SAS, Simest SPA, Summer Conf SRL, Hanna Instruments Romania SRL, Omnia Professional SRL, FSS Activ Group SRL, STX RO Electrotulcea SRL, Mihaela Carmen Popa.
Romania envisage to ease further the way businesses are conducted in the country, in order to attract more foreign investments in sectors such as: agriculture, automotive, IT&C, R&D, pharmaceuticals, machinery chemicals etc.
One area which is yet to be explored fully is the tourism sector. Indian and Romanian tourism ministries have signed a memorandum of understanding (MoU) in 2018 to increase the flow of tourists from both sides. The flow of tourists helps the local population through more earnings and newer employment opportunities.
In the area of green energy, Romania has already engaged in reducing it’s carbon blueprint and be committed to achieve the EU ambitious new targets to curb further the climate change. Romania together with India can certainly cooperate and collaborate in this key sector. The two nations can work together to reduce carbon footprint and focus on harnessing sustainable sources of power, such as solar energy. Romania is determined to become shortly a member of the International Solar Alliance, positive steps have already been taken. Connectivity and development of roads and other networks offer a great opportunity for both countries to work together.
Romanian infrastructure companies can work with Indian partners to expand connectivity across Europe and India. Through International North-South Transport Corridor (INSTC), India remains committed to building a multimode network, connecting India to Iran, Azerbaijan, Iran, Afghanistan, Russia, Central Asia, and Europe. This will enhance the movement of freight North-South. The Romanian government has also undertaken expansion of the trans-European transport network. These mega connectivity projects will have many meeting points and scope for collaboration.
Conclusion
Indian business entities such Confederation of Indian Industries (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), Associated Chamber of Commerce (ASSOCHAM) have actively engaged in meaningful dialogue with Romanian Chamber of Commerce and Industry and several other Romanian entities in the last few years, in order to boost the bilateral cooperation and trade. As both countries embraced market reforms, more or less around the same time, the two countries have realized that there are many untapped potentials in trade and investments. Leadership support, upbeat economic growth in India and Romania, and the EU framework are only going to enhance further trade and investments”.
