Latvia and India: Building strong ties

Latvia is looking at attracting Indian investment, much like the other member countries of Baltic Sea Region

Latvia is looking at forging new relationships while strengthening the existing ones with the world's largest democracy and fourth largest economy-India. Even though Latvia cannot compete with India on the scale mentioned above, the country does have its unique advantages that Indian businesses should recon with. Indeed, what Latvia offers is solid infrastructure, skilled workforce, stable economic and political environment, and direct access to 700 million consumers within the European Union and the Commonwealth of Independent States.

Latvia's advantages to investors are based on the following factors:

• Strategic location between East and West, perfectly suited for targeting BSR and Russian markets
• Well educated, highly skilled, multi-lingual, cost effective workforce with high work ethic
• State-of-the-art professional services, telecommunications and IT, energy, financial, logistics and transport systems
• Utilities are a fraction of the cost of those in Western Europe and Scandinavia
• A flat rate of 15% for Corporate Income Tax
• A Company in Latvia can be registered within two working days
• Tax breaks for companies in Special Economic Zones (SEZs) and Free Ports
• Membership in the EU and NATO thus all the regulations regarding Intellectual Property Rights (IPRs) are strictly enforced
• Availability of approximately EUR 1 billion within the EU Structural Funds for the planning period 2007-2013 to be distributed among private companies registered in Latvia.

Also, the international team of professional investment project managers at the Investment and Development Agency of Latvia is equipped enough to provide Indian companies with advantage knowledge, expert advice, access to their networks, contacts and all other investment services completely free of charge.

Common sectors - ICT, Life Science

When it comes to Life Sciences, the industry in Latvia is a combination of history, traditions and on-going investment in education. This has equipped Latvians with a strong manufacturing base in fine chemicals and pharma. In fact Latvia was the principal location for these sectors in the former Soviet Union, with 25 percent of all new Soviet drug technology designed here. Thus, every fourth medical preparation manufactured in the former USSR and intended for the USSR market was actually made in Latvia.

The success of Latvia's Life Science sector is in many ways due to the scientific foundations put in place by the Latvian Institute of Organic Synthesis. It was established in 1957 and since then a total of 17 original medicines and over 60 chemical processes for generics have been developed by the Institute. Those include world-renowned anti-cancer preparation Ftorafur (Tegafur), anti-flu preparation Remantadine, and cardioprotector Mildronate. Continuing the research on new physiologically active substances, the Institute has established successful scientific contacts with the prominent medical preparation research centres in Europe, Japan, and the USA.

An experimental plant was also included within the structure of the Institute that ensured working out the technologies for the required substances and the production of preparations. Since 1992 the plant has been operating as JSC Grindeks. Grindeks is the leading pharma company in the Baltic States with presence in 37 countries! Since 2002, Grindeks has been successfully exporting active pharma ingredient Oxytocine to Mumbai-based Cipla.

Thus there are already existing links between the businesses in the two sectors and Latvia today is open to Indian businesses forging more and stronger connections to the open and dynamic economy of Latvia.

Destination Latvia

There are two compelling factors for Indian companies and investors to look at Latvia as the next destination to park their funds. The first is the country's reputation of excellence. Even before the times of Vikings, Latvians have been trading with neighbours to the East and West. Thus, for many centuries Latvians have been associated with first-class ingredients, high-quality production and skilled professionals.

The second factor is the country's role as the bridge between East and West. While in the past Latvia's location served as a source of trouble, nowadays it serves as a source of opportunity. It is proven by the fact that Latvia was the first East block country to host North Atlantic Treaty Organization summit which took place in November 2006. Business follows politics and consequently, Latvia has been one of the main transit points for the flow of goods from East to West, and from North to South. Now, being at the EU frontier, Latvia is a natural choice for any company willing to extend its international reach.

A synergistic relationship

From the above, it is clear that Latvia offers various advantages that India cannot. Likewise, there are many advantages India has that Latvia will never have. Nevertheless, in today's globalized world, the only way for a company to compete on an international scale is by having its presence in so-called melting pots. Latvia offers one such melting pot with its R&D staff and local pharma companies welcoming foreign know-how and investments. It is only through collaboration, innovation and open mind the pharma sectors in both the countries will reach new heights and bear fruits for companies and people alike.