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.

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.

India – Czech Bilateral Trade

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.