Embassy of India

Prague, Czech Republic

 

Important Links:

India–Czech Commercial and Economic Relations

India's trade links with Czechoslovakia (CZ) pre-date India’s independence; Bata Works had 120 Czechoslovak nationals employed in Calcutta even in the 1930s.  Over the four decades since independence, CZ was a major economic partner, establishing a number of major industrial projects in India in fields of energy, metallurgy, machine tools and in defence.  With the formation of the Czech Republic (CR) on January 1, 1993, the switch to payments in freely convertible currencies and the liquidation of large state owned companies in CR led to a decline in trade.  New mechanisms to address trade and economic challenges have been put in place. The results are encouraging and the two-way trade and also the investments are on the upswing.

2.Both countries have continued efforts for strengthening economic relations through frequent exchange of trade and business delegations. Since 2012, bilateral trade has amounted to more than one billion U.S. dollars.  In 2013, for the first time in our long history of economic relations, the balance of bilateral trade tilted in India’s favour. The bilateral trade turnover was USD 1221 million in 2015, which increased to USD 1355 million in 2016 and USD 1466 million in 2017.

Bilateral Trade Figures

(Million US Dollars)

(Source: Czech Statistical Office)

3 .Major Items of Indian Exports:  Iron and Steel, Articles of apparel and clothing accessories, Textile yarn, fabrics, made-up articles,  Electrical machinery, apparatus and appliances, Power-generating machinery and equipment, Medical and pharmaceutical products, Miscellaneous manufactured articles, footwear, General industrial machinery and equipment, Organic chemicals.

4. Major Items of Indian Imports:  Boilers and Electrical Machineries,  Machinery specialized for particular industries,  General industrial machinery and equipment, Roads vehicles , Organic chemicals, Rubber materials, Telecommunications and sound-recording equipment.  

Cooperation mechanisms

(i) Joint Economic Commission:

5. Immediately after the creation of the new Czech Republic, new economic agreements were concluded to facilitate trade and investment.  The India-Czech Joint Economic Committee (JEC) provided the institutional framework for intergovernmental discussions on economic cooperation.   The 7th Session of the JEC was held in Prague in June 2006. After the entry of the Czech Republic into the European Union, a Bilateral Economic Agreement was been signed during the visit of Vice President in June 2010.  Protocol on Amendments to Bilateral Investment Protection Agreement (BIPA) with the Czech Republic  was also signed during Vice President’s visit in June 2010.  

6. Following the signing of a new Trade and Economic Cooperation Agreement in June 2010, the Joint Economic Committee was upgraded to a Joint Commission.  The first meeting of Indo Czech Joint Commission on Economic Cooperation took place in New Delhi in November 2010. Though it was the first meeting of the Joint Commission it was called the eighth session taking into account earlier seven meetings held at the level of the Joint Committee.

7. The Ninth session of Joint Economic Commission was held in Prague and Brno on September 7-11, 2012 at the Ministerial level.  The heads of Indian and Czech delegation co-inaugurated the International Engineering fair in Brno and launched “India Show “ which showcased  Indian Engineering Industry. It was the first India show in the Central and Eastern Europe.

8. The tenth session of Joint Economic Commission was held in New Delhi on January 27-28, 2015 at the Ministerial level. It was led by Smt. Nimala Sitharaman, CIM from Indian side and Mr. Jan Mladek Minister of Industry and Trade from Czech side. Both side reconfirmed the determination expressed during the 9th session of the Joint Commission to encourage bilateral trade in order to reach the level of US $ 5 billion setting the year 2020 as a target year.

(ii) Joint Working Groups

9. A Joint Working Group (JWG) on Industries was set up to facilitate contact between Czech and Indian companies in the heavy industrial sector.  Indian PSUs like HEC and HMT are interested in tie-ups with Czech counterparts both for up-gradation of technology for their old Czech machinery & equipment and for joint participation in major infrastructural projects in India.  The first meeting of the JWG was held in Prague in June 2006, the second in Bangalore in January 2007.

10. During the 9th session of the Joint Commission both side agreed to reactivate the Joint Working Group on Heavy Engineering. The first meeting was held in Mumbai on March 15, 2013 and its second meeting was held on September 24, 2014 in Prague. The third meeting was held in November 2015 at Mumbai.

(iii) Joint Business Councils

11. An India-Czech Joint Business Council was established in 1991, with FICCI and its Czech counterpart as the nodal agencies. Both the sides agreed to do JBC meeting on the side-lines of Joint Economic Commission. Accordingly, during the 9th and 10th JEC meeting, India- Czech joint business meetings were also organized on the sidelines of the JEC and business delegation from both countries held discussions.

12. India- Central Europe Business Forum:  In addition to bilateral business councils, Czech companies participate in India –Central Europe Business Forum also. The   first edition of India –Central Europe Business Forum (ICEBF) was organized by FICCI in March 2014 at New Delhi under the auspices of Ministry of External Affairs. The first edition of ICEBF attracted over 100 official and business delegates from 14 Central European (CE) countries. The second edition was held in Bengaluru on October 5&6, 2015.

Agreements /MOUS

13. Both the countries have following agreements/ MOUs in the field of Economic and Commercial relations

(a) Bilateral Economic Cooperation Agreement.  2010

(b) Double Taxation Avoidance Agreement signed in 1998.

(c) Bilateral Investment Promotion Agreement (BIPPA) 1996

(d) Social Security Agreement (2010)

(e) Protocol between Ministry of Heavy Industries and Public Enterprises of Government of India and Ministry of Industry and Trade of Czech Republic on Cooperation in the field of Heavy Industries ( November 2015)

Landmarks in Bilateral Trade & Economic Relations

• 1920: Czechoslovakia established a Consulate in Bombay in 1920 and in Calcutta thereafter.
  
  

• 1930s: The famous Czech Shoe Company Bata Works had 120 Czechoslovak nationals employed in Calcutta in the 1930s.
  
  

• 1950-1990s: Czechoslovakia a major trading partner of India among the Central and East European States (Trade on the basis of a five-year Trade and Payment Agreement)
  
  

• 1966: Agreement on the use of nuclear energy for peaceful purposes.
  
  

• 1973: Agreement on scientific, technical and industrial cooperation.
  
  

• 1978: Agreement on cooperation in sea transportation.
  
  

• 1993: Payment switched over to freely convertible currencies.
  
  

• 1993: IOC awarded a US$370 million contract for Kandla-Bhatinda Pipeline to Skodaexport.
  
  

• 1995: First Session of India-CR Joint Economic Committee (JEC) meets in Prague.
  
  

• 1998: Tatra Udyog Joint Venture set up at Hosur; Production under licensing at BEML in Bangalore dates back to 1986.
  
  

• 1998: Bilateral Investment Promotion and Protection Agreement (BIPA) ratified on 6/2/98.
  
  

• 1999: Double Taxation Avoidance Agreement (DTAA) w.e.f. 2000.
  
  

• 1999: Air Services Agreement 14/9/99.
  
  

• 2001: Skoda Auto Assembly Plant at Aurangabad launches Octavia cars in Indian market.
  
  

• 2003: Sale of Nova Hut (NH), largest Czech steel company to LNM Holdings – 2003: Vectra Ltd, Indian partner of Tatra JV acquires 21% stake in parent Tatra Koprivnice company, a major truck producer. With effect from September 2003, Tatra Udyog has changed its name to Tatra Trucks India Ltd. (TTIL).
  
  
  Infosys Technologies sets up a BPO in Brno in 2004 and new facilities inaugurated by Czech President in April 2007.
  
  

• Ashok Leyland acquires truck manufacturing unit of Czech company Avia in 2006.
  
  

• Tata Tea, through its UK Tetley Group acquires the biggest Czech tea company Jemca in 2007.
  
  

• Alok Industries acquires Mileta Textile Company in 2007.
  
  

• Motherson Auto acquires FP Formagrau in 2007.
  
  

• Spentex Industries acquired a Czech yarn company Schoeller Litvinov.
  
  

• Fedders Lloyd Corporation Ltd. purchased a Czech company Luvata in May, 2008 and opened their new company Lloyd Coils Czech s.r.o.
  
  

• Lloyd Engineering s.r.o. acquired Czech company Janka Engineering s.r.o. in 2009.
  
  

• Economic Cooperation Agreement The Agreement was signed during visit of Vice – President in June, 2010.   
  
  

• Social Security Agreement,   The Agreement was signed during the visit of Vice    President in June, 2010.
  
  

•  Bilateral Investment Promotion Agreement   BIPPA was signed in 1996. Protocol on Amendments to BIPPA Agreement was signed on 8.6.2010 during the visit of Vice- President.
  
  

• Protocol on Economic cooperation Signed on the occasion of the  Joint Economic Commission, Nov 29-30,2010
  
  

Bilateral Visits

In more recent visits, President Klaus led a business delegation to India in November, 2005. Earlier, our President had led a major business delegation to Czech Republic in 1996 and several agreements were signed during the VIP visit. As a part of 60th anniversary celebrations of establishment of diplomatic relations, Chairman of Czech Senate Dr. Premsyl Sobotka led a business delegation to India in December, 2007.

Mr. Kamal Nath, our Minister of Commerce and Industry, accompanied with official delegation, visited Prague in September, 2008. A 12 member CII delegation led by Mr. R. Seshasayee, former President of CII and Managing Director of Ashok Leyland, also accompanied the commerce Minister. A Business Seminar was organized, which was inaugurated by CIM, by CII and Confederation of Czech Industries. Czech Minister of Industry and Trade Mr. Martin Riman led a business delegation of 19 Czech business companies to India in November, 2008.

Mr. R.P. Agrawal, Secretary (Higher Education) led a delegation comprising of Chairman (University Grants Commission), and Director (IIT- Mumbai). Secretary (HE) signed a Joint Declaration on cooperation in the field of Education with Czech Deputy Minister of Education. A CSIR team led by Prof. S.K. Brahmachari, DG, CSIR visited Czech Republic, on the invitation of Czech Academy of Sciences, in September, 2009 to explore possibility of cooperation in the areas of mutual interest. Mr. Dinesh Rai, Secretary (Micro Small and Medium Enterprises) visited Czech Republic in January, 2010. A delegation led by HMT Chairman visited Czech Republic from 27-30 January,2010 for talks with Zetor, Czech company producing tractors. HMT is producing tractors since 70s under a licensing agreement with the Czech company.

 Vice President of India  Mr. Hamid Ansari paid an official visit to Czech Republic from 6- 9 June, 2010.  During the visit, the Agreement on Economic Cooperation, Social Security Agreement and  Protocol on Biltaeral Investment Protection and Promotion Agreement were signed.   

A 15 member delegation of the National Jute Board  visited  Czech Republic from 15-17 September,2010. 

Czech Deputy Minister for Trade and Industry Mr Milan Hovorka visted India from 29-30 November 2010 for the eight session of the Indo Czech Joint economic Commision meeting. A Protocol on Economic Cooperation was signed on the occassion. He was accompanied by a Czech trade delegation.

In January 2011 a Czech delegation of machine tool industry visited Bangalore led by Mr Milan Hovorka for participation in the IMTEX trade fair. A 4-member Joint delegation from the Ministry of Heavy Industries and Heavy Engineering Corporation Ranchi led by Mr Saurabh Chandra AS& FA visited Czech Republic from February 7- 12, 2011.   Textile Secretary Ms. Rita Menon visited Czech Republic along with Development Commissioner Handicrafts and Handlooms and Indian companies dealing with Glass and Handicrafts.

The delegation of Czech Senate President, including Deputy Minister for Trade & Economy, Mr Hovorka left for India on the weekend for an official visit  from May 8-13,2011. 

Minister for Coal Shri Jaiswal visited Czech Republic from June 13-16 June, 2011.  He was accompanied by Special Secretary (Coal), Chairman Coal India, Chairman Neyvli Lignite Corporation as well as other officials.  He was received by Czech Minister for Trade & Industry Mr Kocucek.  He also visited important companies producing coal mining equipment.  Czech strength lies in manufacture of equipment for deep coal mining, which is in India.           

Mr Martin Kocourek, former Minister of Industry and Trade, CR led a 50-member delegation of Czech business houses and companies to India from October 9-11, 2011. Another prominent member of the delegation was Mr Milan Urban, Chairperson of the Committee on Economic Affairs of the Czech Parliament. The delegation had meetings with Mr Anand Sharma, Minister of Commerce, Industry and Textiles.

A 3-member delegation from the Indian Tobacco Board led by Chairman Tobacco Board, Mr G. Kamala Vardhana Rao, visited Prague from November 14 to November 18, 2011 in connection with Tabexpo 2011 exhibition.

Union Minister for Commerce, Industry & Textiles of India, Shri Anand Sharma visited the Czech Republic from 9-11 September.2012 and  led a high level business delegation for participating in the India Show.Senior officials from Ministry of Commerce accomapnied the delegation. Over 135 companies belonging primarily to India’s engineering sector  participated, showcasing their strengths and capabilities with respect to Indian products, technologies and services during the show . These companies represented the entire scale of India’s engineering strengths; encompassing large, medium and the small scale sectors.

List of Czech companies in India 

A LIST of Indian NRI Companies Invested in the Czech Republic