ROMANIA - INDIA BILATERAL TRADE

According to Romanian trade statistics, Romania-India bilateral trade went up by 101.77% in 2004, compared with 2003.

The volume of the bilateral trade exchanges on December 31, 2004 reached the total of 265.55 million dollars, out of which Romanian exports to India were 129.82 million dollars and Romanian imports from India were 135.73 million dollars.

According to our statistics for 2004, the Romanian export raised by 142.42% reaching 129,82 million dollars while the imports from India raised by 73.87% at 135,73 million dollars.

Romania-India bilateral trade 1994 - 2004 (million dollars)

The main Romanian exports to India consist in steel products (plates, bands, pipes, profiles, reinforced bars), wheels for wagons, chemical products (organic and inorganic), equipment for metallurgical industry, equipment for oil refineries and oil field production (drilling rigs, pumping units, extraction pumps, parts, accessories and tools), machinery and equipment for metal processing, machine tools, ball bearings and components, pharmaceuticals, polynitril acrylic and polyamide fibbers, paper (various types), aluminum products, electric and electronic components, etc.

During the year 2004, Romanian exports consists in:

Structure of the Romanian exports to India, 2004

The main products in India's export basket to Romania are iron and manganese ore, organic chemical products, pharmaceuticals, tobacco, rubber and plastics, raw cotton, tanning agents, textiles, knitwear, finished and manufactured leather, leather shoes, coffee, tea, pepper, rice, etc.
Import structure is the following:

Structure of the Indian exports to Romania, 2004

India represents one of the most important economic partners for Romania in Asia representing a solid market for Romanian goods and an important supplier of many products needed by the economy.

Romania and India have achieved together, in the past, a number of economic projects in various fields such us: oil, petrochemical, power, metallurgical and others.

• Gauhati oil refinery
  
• Singareni thermal power plant
  
• Lube oil at Haldia refinery
  
• Mangalore palletizing plant
  
• Durgapur agglomeration plant
  
• Hyderabad tractor assembling plant.

In the field of trade, Romania offers to the Indian partners certain competitive advantageous, such as:

• Excellent geographical position in Central Europe allowing a good access to the markets of Western Europe, Eastern and South Eastern Europe and CIS countries;
  
• The important size of the Romanian market, being the second largest in Central Europe, after Poland;
  
• A wide range of natural resources including fertile land, wood and an important potential for tourism;
  
• Wide opportunities for sea and river transportation, Constanta being the largest Black Sea Port, Romania is well connected, through the Danube River to the network of canals up to the Germany - North Sea.

In the filed of investments the Romanian investment legal framework already provides specific regulations, allowing for different incentives, depending on the type of investment: in normal areas, in disadvantaged areas, in industrial and technological parks, or in free zones.
Moreover, local authorities can grant additional facilities, and the SME's sector is especially supported.

Law No. 133/20.07.1999 on the Stimulation of the Private Entrepreneurship for establishing and developing of micro-enterprises (maximum 9 employees), small enterprises (between 10 to 49 employees) and middle-sized companies (between 50 to 249 employees).

In order for the companies to benefit from the incentives provided by this Law, they must be entirely private-owned and make an annual turnover up to 8 million EURO.

The Law does not apply to banks, insurance and reinsurance companies, management of financial investments funds, securities companies and companies performing foreign trade activities exclusively.

The Government Emergency Ordinance No. 24/1998, approved by Law No.20/1999 and Government Emergency Ordinance No. 75/2000, regulates the disadvantaged zones.

Conditions

• The local unemployment level is at least three times higher than the national level for the last 3 months foregoing the month the documentation for declaring it a disadvantaged zone was prepared;
  
• The region is isolated, lacking communication means and appropriate infrastructure.
  Incentives
  
• Exemption from payment of custom duties for raw material and components imported for investing in the area
  
• Exemption from payment of taxes for modifying the destination or removing from the agricultural use of the land intended to achieve the investment

Law No. 490/2002 for the approval of the Government Ordinance no. 65/2001 on the establishment and operation of industrial parks provides new incentives for certain investment. The industrial parks are limited zones in the boundaries of which economic, scientific research and/or technological development activities are performed by using the human and material potential available in the region.

The conditions for an area to be qualified as an industrial park are as follows:

• Access to national or European roads
  
• Surface of at least 10 hectares (except for companies performing certain activities)
  
• Be not subject to ongoing litigations
  
• The company requesting the industrial park title should have the property or use right of the area for a period of at least 30 years.

Government Ordinance no. 14/2002 on the Setting up and Operation of Scientific and Technological Parks provides new incentives for certain investment, part of them being granted by local authorities.

According to the Ordinance, the scientific and technological parks are limited zones within defined boundaries in which education activities, research work and technological transfer of the results are performed, and the outcomes of them are traded by related activities.

The land related to the scientific and technological park has to comply cumulatively with the following conditions:

• To lack any encumbrance
  
• Not to make the object of any pending litigation in respect of its legal status.

FREE TRADE ZONES
Incentives
The incentives provided by the Law, reinforced by the Fiscal Code are:

• Exemption from payment of custom duties and other taxes for the imported transportations means, merchandise and other goods coming in or out from the free zones;
  
• Exemption from payment of custom duties for the Romanian materials and accessories utilized for producing goods, coming into the free zones;
  
• Exemption from payment of custom duties for the Romanian goods utilized in for the construction works, repairing and maintenance activities;
  
• Exemption from payment of custom duties for carrying the goods from one zone to another;
  
• All financial transactions carried out in hard currency for the activities developed in the free zones;
  
• Investors that develop activities within a free zone, that started their investments with a value exceeding USD 1 mil., before July 1, 2002, in manufacturing industry, benefit from exemption for paying tax on profit until June 30, 2007;
  
• 5% tax on profit.

The present free zones are: Sulina, Constanta Sud, Basarabi, Galati , Braila and Curtici.

Commercial exchanges between Romania and India in 2004 (.pdf)