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Indian SMEs making a mark in Morocco

Tuesday, August 25, 2009

IT, energy, chemicals and infrastructure are potential sectors of growth for Indian SMEs in Morocco

By Shubhomita Bose

High rate of unemployment, low agricultural output and severe draught conditions have marred Morocco’s image as a developing economy. To address these key issues and ensure overall development, the Moroccan authorities initiated an economic reform programme in the early 1990s. Concerted efforts like these have revived the Moroccan economy to a great extent and attracted foreign investors from countries such as China and India.

In a move to increase exports to the US, Morocco signed a Free Trade Agreement (FTA) in 2000. The agreement has played a key role in increasing Moroccan exports to the US. Foreign companies have therefore shown a keen interest on setting up their units in Morocco to capitalise on the benefits provided under the FTA.

Trade relations

Significantly, Indo-Moroccan trade ties have been strengthened since the 1990s when the Indian economy became liberalised. At present, Indo-Moroccan bilateral trade is pegged at around US$706.63 million.[i]

India is a leading exporter of dairy products, mineral oil, tea, coffee, spices, cereals, inorganic chemicals and pharmaceutical products to Morocco. Alternately, Morocco exports items such as oil seeds, resins, animal fats, salt, sugar, lime, ores, precious metals and plastics to India.

Morocco moves up the ladder

For Indian SMEs, Morocco has emerged as a lucrative trade and investment destination because of its competitiveness and business-friendly environment. Moroccan authorities have also invited Indian SMEs to explore trade opportunities in their country.

According to trade experts, Morocco’s robust banking sector, flexible labour laws and its proximity to the African and European markets are chief factors working in its favour. Indian SMEs are also playing a dominant role in boosting Morocco’s ailing SME segment by facilitating knowledge exchange.

The Moroccan government has also stepped up efforts to provide assistance to Indian SMEs eyeing expansion in Morocco. The Moroccan government has recently set up 16 regional investment centres that process registration applications of foreign companies within 48 hours. This has not only simplified the registration process considerably but has also lowered the cost of starting a business in the country.

To facilitate mutual cooperation between the two countries, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) has collaborated with Morocco-based AL Fajer Information & Services to organise the Morocco International Autumn Trade Fair (MIATF)2009. Slated to be held in November this year, the event is conceptualised as a platform to explore trade opportunities for Indian companies in sectors such as textiles, electronics, food processing, leather and plastic.

[i] DGCIS, Calcutta

Tags - Morocco, foreign investors, Free Trade Agreement, FTA, Indo-Moroccan trade, Indian SMEs, regional investment centres, Associated Chambers of Commerce and Industry of India, ASSOCHAM

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