Krzysztof Iwanek, Poland-Asia Research Centre

A summary of Indo-Polish economic relations

[This is not a journal article. This text was distributed among the participants of the Poland-India.
Towards an Efficient Model of Economic Diplomacy conference, held in the Sejm of the Republic
of Poland (lower house of the Polish Parliament) on 25th September 2014.]

1. The first known case of a Polish company in India was not really Polish and we would not want
to perceive it as a symbol of our economic relations. In 1730, the British and Dutch forces seized
two ships in the Bengal of Bay. Both officially belonged to a Polish West and East Indies Company
(Kompanja Indyj Zachodnich i Wschodnich). As it turned out, the trade mission of those ships was
really a joint Austro-Belgian enterprise that had used the Polish flag to bypass the British-Dutch
monopoly. We would not like to repeat anything that happened in that story: the brand of
Poland was used by other nations and entrepreneurs (with, so it seems, Polish approval) and the
only result it yielded for our country was shame. Obviously, Poland prefers to promote its own
companies and hopes that they will be successful. Moreover, judging by the later history, we are
happy that we did not have such an East India Company which would take part in the conquestof
South Asia.

2. The first known, genuinely Polish endeavour to enter the Indian market is the Bank of Poland
mission of 1829 (when neither Poland nor India was free). A ship containing zinc and other
materials was sent to Calcutta, but no lasting trade relation was eventually established. The other
Pole that took to trade in India was Franciszek Szymaski at the end of the 19th century.

3. The consulate of the Republic of Poland in Bombay (now Mumbai) was established in 1933. A
trade agreement had been signed two years earlier. This means that Poland had a diplomatic
mission in India before the latter even gained independence. One of the missions primary goals
was to promote Indo-Polish trade. There was also an honorary consul in Calcutta (now Kolkata).
Just like in the recent years, in the trade of that time Indian exports to Poland were larger than
Polish exports to India. As of 1937 Poland mainly sold products of its agricultural, chemical and
pharmaceutical industries, metals and metal products (including zinc, which Poland had first tried
to sell to Indians more than a century earlier), ham, textiles, wood and wooden products, paper
and paper products and a number other commodities. Things imported from India included
predominantly rice, jute and cotton, and beside this spices, tea, coffee, medicinal plants and seeds
of few other plants (like sesame), chrome and manganese ores, natural rubber, talc and other
goods. The total volume of the export to India in 1930s was considered to be unimpressive, but
on the other hand it was a bigger part of Polands total exports than it is now (compare with data
in paragraph 5). In 1937 it constituted 2.2% of Polands total exports.
4. The cooperation developed in the decades after the war, when the two countries had
established their ties in 1954 as the Republic of India and Polish Peoples Republic and found
themselves on similar political and ideological positions. In that time one of the important Polish
products sold to India were Gdynia dockyard-produced ships as well as ship engines. Of these, a
few landing ships, of B-561 and Project 773-U (Pnocny-D) types, are still in service in the Indian
navy. Tanks, armoured transporters and armoured recovery vehicles were also sold. Another work
of Polish technology sent to India was the TS-11 Iskra (Spark) trainer aircrafts. In the Communist
period Poland also played an important part in the development of Indias heavy industry,
contributing to the establishment of power plants, coal mines and manufacturing facilities. A
tractor factory and a motorcycle factory, both following Polish technology on a licence, were also
established. The export of Polish military technology dropped after the collapse of the Soviet
Union and the communist bloc, and the export of Polish commodities as such was hit by the
change in the system of financial exchange in 1990s. The volume of trade went up again in 2000s.
As for Polish investment in India and Indian investment in Poland, it happened mostly throughout
the last ten years, after both nations liberalized their economies in 1990s (cf. data in paragraphs 6
and 9).

5. Polands exports to India were worth 298.6 million USD in 2008, 337.4 in 2009, 339 in 2010, 524
in 2011, 666 in 2012, 524 in 2013 (according to the Ministry of Economy and Embassy of the
Republic of Poland in India data). As a part of Polands total export these numbers are not very
significant (in the last few years the export to India was never more than 0.5% of Polands total
export). Since many years, Polands export to India is dominated by electromechanical,
metallurgical and chemical products, as well as plastic materials. Some of the companies selling
their produce to India in the last ten years were Fabryka Papieru Myszkw (The Myszkw Paper
Factory), Inglot (cosmetics), Komandor (furniture), Rafako (pulverised fuel fired boilers), LCGC
Radwag (digital weighing scales) and Zamet Budowa Maszyn (part of Zamet Industry). One could
also add that Sobieski is one of the new vodka brands available in India. One can also try the
Okocim Palone beer in India, but the taste will be different it is a beer of the same name and
owned by the same company, but produced in India. Indias exports to Poland amounted to 976.1
million USD in 2008, 803.7 in 2009, 987.5 in 2010, 1.350 billion in 2011, 1.244 billion in 2012 and
1.465 billion in 2013. That export is dominated by textiles and chemical products. The Polish
branch of the Japanese company Marubeni Motors entered a tie-up with Tata Motors, which
resulted in importing Tata cars to Poland since 2007, but that did not yield much results and was
halted 4 years later.

6. Polish investment in India occurred mainly in 2000s, in the south and the west of the country.
In the south VTS sells AC systems in Bangalore (Karnataka), Polmor manufactures welded
structures in Hyderabad (erstwhile Andhra Pradesh, now Telangana), and Toruskie Zakady
Materiaw Opatrunkowych, via its Bella India subsidiary, run sanitary products factory in Dindigul
district (Tamil Nadu, opened in 2005). In the west Maflow opened an air conditioning tubes
factory in Pune in 2014 while Can Pack, following the 2008 agreement with the government of
Maharashtra, introduced Polands biggest investment in India, opening an aluminium can factory,
and then a glass bottle producing unit in Aurangabad, Indias hub of beer production. Another
company that entered the Indian market in 2010 and expanded in 2012 was SECO/Warwick (which
now runs a furnace factory near Mumbai in Maharashtra, also in the west of India). In comparative
perspective, Polish investment in India may seem unimpressive. In the period of 2002-2009 it
amounted to 28.02 billion USD, which constituted 3% of the total foreign investment in India in
these years.

7. Polish people are considered to be blessed with good technological thinking and to a
developing country like India, Poland can clearly offer much in terms of technological abilities and
products. Already in 1930s a Polish Katowice-based company built a hydroelectric station near
Ootacamund (then in Madras Presidency, now Tamil Nadu). In the same decade a Polish Jew,
Maurycy Frydman, better known for his other and later activities and his friendship with Gandhi,
came to India to take part in establishing a factory in Mysore. Throughout the Communist period
and in the 1990s, Elektrim sold and established electric equipment in many power plants in India,
including the grand state projects in Bokaro (then Bihar, now Jharkhand) and Durgapur (West
Bengal). Since 1984 Geofizyka Toru has been conducting seismic surveys for oil and gas
exploration in various regions of India for companies as big as Reliance or state-run ONGC. A
similar case is that of NAFTA Pia (Poszukiwanie Gazu i Nafty Pia, Grupa PGNIG) which in search
of gas and oil started to drill in Gujarat in 2007. A few years ago Amul, one of the leading dairy
companies in India, purchased a technological line to produce paneer (Indian cottage cheese)
from Polish OBRAM. Following a 2009 agreement, The Puawy-based Zakady Azotowe, together
with the Industrial Chemistry Research Institute in Warsaw and ENCO Engineering in Switzerland,
helped modernising a GSFC plant in Vadodara (Gujarat).

8. The best known cases of Polish technologies being sold to India or of Indian machines being
modernised with Polish help are to be found in the area of defence equipment. This is hardly
surprising, taking into consideration that Warsaw sold defence sector products to New Delhi
already in the Communist era and that both countries had been receiving Soviet technology for a
long time. Many devices and vehicles in the Indian and Polish army are still compatible and the
modernization applied in one of the militaries can be often transplanted to the other. In this way
the Poles modernised Indian T-72 tanks. A company called Cenzin used to sell military equipment
to India. The biggest economic tie of this kind is the selling of armoured recovery vehicles to
India by the Bumar company (now called Polski Holding Obronny), which started already in the
Communist period and, if certain difficulties will be overcome, will be continued in the years to
come. In 2010 OBRUM (Orodek Badawczo-Rozwojowy Urzdze Mechanicznych, also part of
Polski Holding Obronny) signed a deal with Indian BEML to jointly develop a light tank.
9. As for Indian investment in Poland, probably the most famous case is that of Lakshmi Narayan
Mittals company (which is now ArcelorMittal after it merged with the European company of the
former name). In 2004 it bought steel plants in Warsaw, Cracow, Sosnowiec, witochowice, and
Dbrowa Grnicza. In 2005 Videocon bought a television set manufacturing unit in Piaseczno near
Warsaw but it closed down after few years. Two Indian companies established their factories in
the Kostrzy-Subice Special Economic Zone. The first one is Essel Propack (a part of the Essel
Group) which is running a laminated tubes factory, and the second Novo Tech, which produces
polymer products. In 2012 UFLEX started running a plastic wrap factory in Wrzenia. Punj Lloyd
took part in constructing the A-5 highway. Some recent examples of acquirements of companies
based in Poland, or of their stakes, were the work of Berger Paints India (in the external insulation
finishing system market), Escorts (in tractor production), Indorama (PET packages), Lambda
Therapeutics Research (stakes purchased in a clinical centre in Warsaw), Tata Global Beverages (in
the tea market), VVF (acquiring of a soap factory) and Glenmark Pharmaceuticals (taking over
seven pharmaceutical brands in Poland). Apart from these examples, Indias main investment in
Poland occurred in the IT and BPO sectors. These include: Zensar Technologies Limited in Gdask,
Tata Consultancy Service and HCL in Cracow, Wipro, KPIT-Infosystems, GE Money and Genpact in
Wrocaw and Infosys in d.

10. Shooting movies in Poland has become a way of promoting our country as a tourist
destination, and therefore could yield some economic results in a longer perspective. The first
Indian movie to be shot partially in Poland was Kajol and Aamir Khan-starred Fanaa, where the
snow-capped mountains of Kashmir were in reality the Polish region of Podhale. In Aazaan,
Cracow played itself and became a target of a terrorist attack in the plot. Two song sequences for
a Tamil movie entitled Saguni were also shot in Cracow and three other locations in Poland. The
Polish Tourism Organisation (Polska Organizacja Turystyczna) was instrumental in wooing Indian
producers to Poland. Its recent success was roping in the producers of Salman Khan-starred Kick,
which became the seventh Indian fiction movie to be shot partially in Poland and the first one to
be shot in Warsaw. The next one will be Bangistan. Recently Indian companies often asked Polish
advertisement producers for postproduction. The most famous case of a commercial actually shot
in Poland was a perfume advertisement for which Katrina Kaif, a Bollywood star, was brought to
Cracow and the Juliusz Sowacki Theater was the venue. Film Polska Productions took part in
some of the most important Indian projects of this kind in Poland, including Kick and the
commercial with Katrina Kaif.

11. Once we dig deeper into Indo-Polish economic relations, me find much more amusing
histories. While some of them might not be so important to the overall volume of trade between
the two nations, they serve as symbols of people-to-people connections. In a backpacker-
dominated area of Delhis Paharganj one can find a hotel called Hari Piorko. Its Indian owner
reportedly used to sell pens in Poland (hence his nickname and the name of the hotel Piorko
which is actually Polish pirko, small pen). Further along Paharganjs main street (Main Bazaar),
one used to find a shop that belonged to a Polish owner. Many Indian restaurants operate both in
Warsaw and Poland as a whole. Poles and Indians, as well as Polish, Indian and joint companies,
have formed two important chambers Indo-Polish Chamber of Commerce and Industry and
Polsko-Indyjska Izba Gospodarcza (Polish-Indian Chamber of Commerce).

12. Near future certainly offers many chances of enhancing Indo-Polish economic relations. On its
path of development India has to radically upgrade its infrastructure, solve the problem of energy
deficit (taping, among others, alternative sources of energy) and food deficit (strengthening
agriculture and introducing the technology of freezing food and transporting it). Polish products
and Polish technological abilities might prove useful in many of these fields. It might often
happen that Poles will be able to provide the technological thinking, but not the finances, so joint
ventures may be the need of the hour. We should also look at Indo-Polish relations from a
broader, regional perspective. In 2004 an expert on Indias foreign relations, C. Raja Mohan, wrote
in The Hindu that Poland could be Indias springboard to enter other markets in the region: the
Baltic states, Ukraine, Belarus and Slovakia. In 2010 the Polish Prime Minister Donald Tusk on his
visit to India played a similar tune saying that Poland is Indias open gate to Europe. A move
towards this regional approach was a recent India-Central Europe Business Forum, held in New
Delhi in March 2014, where representatives of many East-Central European countries were present.
This could be a move in the right direction. Even geography suggests that with its size, India
needs to cooperate with many European countries to strengthen its trade and development. East-
Central European countries could partially enhance their ties with India on a common platform,
through means such as conferences and fora where various nations would put forward their offer,
and Poland could serve as an important meeting ground in this process.

I am very grateful to Katarzyna Mill for sharing the 1930s. data of the Consulate of the Republic
of Poland of Mumbai with me, and to Dorota Heidrich (PhD) and Dominik Konieczny for
suggesting and introducing all necessary changes in this text.