India is set to witness an influx of Swiss investments worth $100 billion over the next 15 years, creating around 10 lakh job opportunities across various sectors. Major Swiss companies like ABB and Kuehne+Nagel are gearing up to expand operations in India, capitalizing on the growing market and favorable economic conditions. This significant move is expected to not only boost India’s economy but also strengthen the relationship between India and the European Free Trade Association (EFTA), of which Switzerland is a leading member.
Driving Forces Behind Swiss Investments
The growing interest of Swiss companies in India is due to multiple factors, including the recently signed Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA). This agreement, once fully approved, will offer Swiss companies a competitive edge in India by reducing tariffs on up to 94.7% of exports. As Swiss businesses look beyond China, India’s expanding economy and its large consumer market are becoming increasingly attractive. With a population of 1.4 billion and a steady growth trajectory, India presents a massive opportunity for these companies.
Swiss Giants Eyeing Expansion in India
ABB, the renowned Swiss engineering firm, is already strengthening its presence in India. According to ABB’s CEO Morten Wierod, India has become one of the company’s most crucial markets, currently ranked fifth but on track to become ABB’s third-largest market after the U.S. and China. The company’s average order volume in India has grown by 27% annually over the past three years, prompting ABB to expand its workforce from 6,000 to 10,000 employees and establish new offices, factories, and showrooms.
Similarly, Kuehne+Nagel, a leading Swiss logistics and transport firm, has been expanding rapidly in India. The company’s workforce in India has nearly doubled since 2019, increasing from 2,850 to 4,800 employees. To further its reach, Kuehne+Nagel is setting up new centers in key cities like Chennai, Gurugram, and Kolkata. According to the firm’s India Managing Director, Anish Jha, the company is benefitting from India’s National Logistics Plan, which has improved infrastructure in roads, ports, and railways.
Impact on India’s Job Market and Economy
The $100 billion investment commitment from Swiss companies, expected to unfold over the next 15 years, promises to create approximately 10 lakh jobs in India. With the trade agreement reducing tariffs and improving market access, Swiss firms are positioned to capitalize on India’s economic growth, benefiting sectors ranging from engineering and logistics to pharmaceuticals and machinery. India, in return, has pledged to ensure a conducive environment for these companies, facilitating smooth and hassle-free operations.
India’s Growing Importance for Swiss Exports
Although Swiss exports to India are currently modest, accounting for only 1.5% of total Swiss mechanical and electrical exports, they have been steadily rising. In 2023, Swiss exports to India saw an 8% increase, a trend expected to continue as Swiss companies deepen their engagement with India. With expanded operations and enhanced market access through the TEPA deal, Swiss companies like ABB and Kuehne+Nagel are set to tap into new opportunities, marking a shift from their traditional focus on China.
As India’s robust growth continues to attract global investors, this increased investment from Switzerland marks a new chapter in India-Switzerland trade relations. The anticipated influx of jobs and foreign investment underlines India’s role as an emerging hub for international businesses, poised to fuel further economic growth and development across multiple sectors.
