INDIA. Mumbai, Maharashtra. Ambassador of Panama in India, Arturo L. Fabrega Alvarez, urged Indian businessmen to work together with Panama in building a business platform to provide basic information of companies, chambers of commerce, and trade bodies to tap the huge opportunity in IT, pharmaceuticals, shipping and logistics, and banking and finance, available in Panama.
Participating in a meeting organized in his honour by All India Association of Industries (AIAI) and M. Visvesaraya Industrial Research and Development Centre (MVIRDC), World Trade Centre (WTC), Mumbai, on Wednesday, Alvarez said that Indian businesses have the potential to benefit from Panama’s USD 22 billion trade market by setting up distribution centres and organizing expos in several sectors of cooperation. To achieve this, India must work together with Panama in building a business platform that will serve as a one-stop-shop for Indian businesses exploring markets in Panama.
Alvarez said that the proposed business platform will provide all necessary information for starting a business, accessing markets, searching individual buyers/ sellers, etc. Within six months of thorough investigation in understanding the markets and after performing due diligence in individual/ company, the Indian businesses could proceed to visit Panama to establish the business physically. This business platform can be promoted across the Americas, Latin-American Caribbean region, so Indian businesses could further reach out to these markets as well.
Alvarez said that the distribution centres would enable quicker and faster access to markets in and around Panama. 20 percent of consumer goods sellers in these markets sell to supermarkets, while 80 percent sell to smaller markets transacting through cash. Additionally, 30 percent of large companies in Panama buy full cargo containers, while 70 percent of small companies buy from smaller ones.
Elaborating on organizing expos, he suggested that India must organize exhibitions from time-to-time in Panama to promote areas of cooperation such as port development, port-related services, infrastructure building, and modernization and mega-engineering projects. To achieve this, mutual agreements can be drawn up to execute the organization of these expos.
The ambassador suggested Indian companies take advantage of setting up their business in Panama’s free zones namely Colon Free Zone and Panama Pacifico Area. These zones offer tax exemptions in indirect taxes, import and export duties, corporate taxes, 100% exemption from all national and provincial taxes, the option of using a leaseback system to name a few. However, it should be noted that free zones only cater to the wholesale trade. Additionally, the ambassador remarked that follow-up on delegation visits was necessary for successful joint venture collaborations to take place, which was found lacking.
World Trade Commission Chairman Kamal Morarka, said that Panama has a stable economy with a regulatory framework that safeguards foreign investments. It is an excellent multimodal logistics hub providing state-of-the-art global connectivity to foreign companies established in its free zones. He expressed that the Panama Canal, a key checkpoint of world trade, linking Atlantic and Pacific oceans connects North-South of the waterways rather than the commonly believed East-East.
The Association for the Improvement of American Infrastructure (AIAI) President Vijay Kalantri, said that Panama is a gateway for Indian companies to access the Americas as it has signed free trade agreements with USA, Canada, and several South/Central American countries. There is a tremendous opportunity for India’s bilateral trade to cross USD 1 billion in the next year from its present USD 314 million. This can be achieved by identifying focus sectors. Currently India exports automobiles, apparel, pharmaceuticals, footwear and imports wood, ores, slags and ash, iron and steel, articles of aluminium, etc.”