Since the early 1990s, the Czech Republic has progressed successfully towards the average OECD incomes. Building on its geographical location and strong industrial base, the country has opened its markets and attracted foreign direct investments. Following the Velvet Revolution in 1989, the economy has become highly integrated in global value chains. Following slow growth in the wake of the 2007 financial crisis, the Czech Republic has resumed its convergence towards OECD and EU average incomes. The economy is thriving, driven by internal and external demand and continues to grow on the back of strong fundamentals: strong domestic demand, sustained job creation and growing tax revenues and exports. The economy had already grown above initial expectations of the IMF in 2017 at 4.3% and maintained a growth rate that exceeds both that of Euro zone and the EU as a whole in 2018 at 3.1% Growth is expected to remain robust at 3% in 2019.
The Czech Republic's strategic location, well-developed infrastructure, and skilled labor force have allowed this small nation of 10.5 million to elevate itself as an important regional and international manufacturing hub and consumer market for Central and Eastern Europe.
India and the Czech Republic 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. The bilateral trade turnover was USD 1221 million in 2015, which increased to USD 1355 million in 2016 and USD 1466 million in 2017 (with India's exports at USD 795 million and India's imports amounting to USD 670 million). Both the countries agreed to boost bilateral economic ties at the eleventh session of India – Czech Republic Joint Commission on Economic Cooperation (JCEC) that was held in October last year. During the summit, the Czech side stressed that the Czech Government continues to rank India among the priority countries for promotion of mutual commercial, investment and economic activities.
India's total merchandise trade with Czech Republic stood at USD 1.19 billion and total engineering trade stood at USD 862 million in 2018. India's share in Czech Republic's engineering import basket is only 0.23% and its rank is 35 among the top exporters to the country. Therefore there is considerable scope of improvement. The top 5 panels in order of priority among the gamut of engineering export panels includes Products ofIron & Steel, Electrical Machinery, Auto Components, Parts and IC Engines & Parts are top panels for the last 3 years with a combined share of close to 80 % in total engineering exports.
Sectors to watch out with potential for Indian exporters include automobile which is the backbone of the Czech national economy. Apart from that advanced engineering and aerospace industries are among others where Indian exporters may have scope. Czech Republic has already made substantial progress in these areas which may also augur well for the exporters involved in the manufacturing /exporting the products of Iron and steel which have been among the top export panels for the last three consecutive years. These are few of the umpteen facts to vouch for attractiveness and potential of the Czech market and Indian exporters shall deliberately consider the opportunities available.