Resilient Supply Chains in the Indo-Pacific: India, an alternative for the Spanish company

Event organized by the Spain-India Council Foundation

The conference “Towards resilient supply chains in the Indo-Pacific: India as an alternative for Spanish companies” was held at the headquarters of the Spanish Chamber of Commerce, a Spain-India dialogue.

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An event organized by Spain-India Council Foundation with the collaboration of Chamber of Commerce of Spain.

 

At the beginning, the director of the Chamber of Spain, Inmaculada Riera presented the day highlighting the importance of the relationships between Spain and India and thanks the Consejo Foundation and the Spanish Chamber of Commerce in India for their work in supporting these relations as well as the Ambassador of India for his efforts in this direction. The objective is to strengthen bilateral relations and increase Spanish investment in India. It is expected that this seminar will contribute value in this decision-making and in this reinforcement of bilateral relations.

 

Throughout the session, various speakers have participated and have given their vision on the topic and the importance and opportunity in this market in which Spain and even Europe do not have a relevant presence. Economist Alicia García Herrero has stated that India presents the greatest opportunity for Spanish companies in today's changing world. According to her, this is due to pure economics, since the growth model of the Chinese economy is exhausted due to the law of gravity. When an economy reaches a per capita income of $10.000 or $12.000, as is the case in China, it is normal for growth to slow rapidly. In addition, there are factors that will further slow down the growth of the Chinese economy, such as aging, something that does not affect India at the moment.

 

García Herrero also highlighted that India's urbanization rate is much lower than that of China, which means that there is a large space to urbanize and many opportunities for Spanish companies in sectors such as construction and renewable energy. Unlike China, India needs foreign capital, which represents a great financing opportunity for Spain. Furthermore, India has a much higher return on investment than China because it has to do much more and on top of that it needs foreign capital.

 

The economist pointed out that India needs greater manufacturing investment in the productive sector to create quality employment and avoid problems related to the youth dividend. For García Herrero, the marriage between Europe and India should focus on investment in the manufacturing sector to create quality employment and generate goods that India consumes internally, thus avoiding large current account deficits.

 

Due to its length, we leave below the reproduction of the full video of the day that we have subtitled for the convenience of our readers as well as the full transcription of the day collecting the interventions of the Indian ambassador in Spain, the senior minister Arancha González layaFernandez as well as like the rest of the participants.

 

 

Full transcript of the day:

 

presenter: [00:01:33] Day. Also for people who are connected via YouTube channel, the dialogue towards resilient supply chains in the Indo-Pacific India will begin as an alternative for the Spanish company. General Director Inmaculada Riera, general director of the Chamber of Commerce, will proceed to inaugurate the panel. Thank you.

 

Immaculate Riera: [00:03:20] Well, thank you very much. Thank you very much to everyone present and to all the people who are connected and attend this seminar. His Excellency Ambassador and ambassador of India. Thanks a lot.

 

Immaculate Riera: [00:03:37] Welcome is your house.

 

Immaculate Riera: [00:03:39] And many thanks also to the ambassadors who accompany us to the President today. Dear President Juan Ignacio of the Spain India Council Foundation, to our Minister, Minister González Laia, today dean of the Paris School of International Relations of Political Sciences, and also to the chief economist for Asia-Pacific of Axis, who will participate in this seminar. To everyone, to ICEX, to the Observatory. Thank you all very much for being here in this house. The house of internationalization and a house in which as the Spanish Chamber of Commerce, I have to highlight, we feel very linked to a very important and strategic country for Spain, but also very important for the Spanish Chamber of Commerce, such as India. . So also on behalf of the president of the Spanish Chamber of Commerce, José Luis Bonet, who I have not been able to attend today because he is at the Mediation Congress in Valladolid, an International Mediation Congress in Valladolid. We want to give all of you, those present and all the people who are connected, a thank you for participating in the Seminar, a welcome and also thank the Spain India Council Foundation. Berta, thank you very much for having us as the President Foundation and for this collaboration that we have had since the beginning of the Spain India Council Foundation, because we have always believed in these relationships of the Chamber of Spain with the foundations, Council as instruments that we are both of. support for companies and support for relations, in this case bilateral with India.

 

Immaculate Riera: [00:05:33] The role that the Consejo Foundation is playing in this is very important and it is a privilege to be able to join in and launch seminars like today's and this collaboration. So thank you very much. And please let me thank very especially Minister Arancha González Laya, who is here. Thank you very much, because it is of enormous value to all of us that you are in the Chamber of Commerce, which has always been and will be your home, and the intervention, the perspective and everything that you can convey to us regarding these bilateral relations and also around Spain's positioning in a strategic region such as the Indo Pacific. And well, today we are going to address a specific topic, but one that is on the order of the day and that is on the table of all companies and also in the strategy of our countries. And in the European strategy, which are global value chains. And I think it is also important, then, to remember how international trade has evolved in recent years. Some years that we started from 2008 have been years of changes, complex years and we started from the same crisis of year two, the financial crisis of 2008. Other factors that have intervened in the latter.

 

Immaculate Riera: [00:07:04] Years from 2008 until now.

 

Immaculate Riera: [00:07:06] As well as factors such as the increase in transportation costs, the commercial tensions that we have experienced between China and the United States until the arrival of COBIT 19. And the war? Unfortunately the war in Ukraine, the invasion of Russia, of Ukraine in Ukraine.

 

Immaculate Riera: [00:07:24] With all of them.

 

Immaculate Riera: [00:07:25] The consequences of this war, not so much in terms of energy supply but also of.

 

Immaculate Riera: [00:07:31] Costs. Not all of them have been, it has been a context and they have all been a series.

 

Immaculate Riera: [00:07:36] Of factors that have caused profound changes, profound changes in the international strategies of the countries of the European Union and of companies, and also changes in global value chains, which is the topic that we discuss today. occupies And we cannot help but remember that the COBIT 19 crisis also revealed the fragility of supply and production chains and the need to address what we call the so-called strategic autonomy. No? So that? Well, to ensure the supply of materials. Components or products essential for the development of our economies and beyond the specific situation. And this situation has led many companies to also sacrifice economic efficiency in favor of more resilient supply chains. The word resilience from COBIT 19 is a word that is very present in all the actions and strategies of companies and our countries. And the strategic autonomy that it implies, since it implies some substantial changes in the industry and some.

 

Immaculate Riera: [00:08:59] Substantial changes.

 

Immaculate Riera: [00:09:00] In commerce. And on the one hand, we went from a just-in-time supply model that we had to a model that is Justin Case. On the other hand, also concepts like.

 

Immaculate Riera: [00:09:13] The one of sharing, which I was looking for.

 

Immaculate Riera: [00:09:17] Relocalize manufacturing to reduce costs as much as possible.

 

Immaculate Riera: [00:09:22] Production costs, it is being replaced by near.

 

Immaculate Riera: [00:09:26] Sharing. And thus a series of changes that force changes in strategies. And on the other hand, in this context, we cannot forget the impact of all these changes to which we have made reference.

 

Immaculate Riera: [00:09:40] More general.

 

Immaculate Riera: [00:09:43] In countries like China. It is something that has produced a change and an impact in a determining country, as it has been for many years, due to multiple factors such as China and that has in fact been a fundamental actor in the expansion and sophistication of the same value chains. . And in today's meeting, we will address as India, as India, a country in which we firmly believe to be an ambassador, as it can be an ideal destination to partially replace the production that had been relocated to China. India has an abundant workforce at competitive prices but highly qualified, an economy in transformation that has registered some.

 

Immaculate Riera: [00:10:38] Rates.

 

Immaculate Riera: [00:10:39] Of growth.

 

Immaculate Riera: [00:10:40] Very high in recent years, especially in recent years and in recent decades as well. And does the country have an ambitious agenda to carry out these reforms, structural reforms and necessary reforms in order to position itself as it already is, as one of the main actors in this reorganization that is taking place in the global value chains and the commitment to trade liberalization, the development of transport infrastructure in India, so important in a country like India and the reinforcement of the enormous human capital that I also referred to before, great talent and also oriented, not to all axes industrial and technological so critical and so key to growth and also investment incentives, since they are all elements that allow and position India as a key actor in this, in this change in a world that we can increasingly define as multipolar, right? And the The axis of global growth has shifted towards the Indo Pacific in Spain. And here we have our minister. Spain has traditionally looked at Latin America for multiple reasons, but Spain has to look more at this region, a strategic region that we cannot forget in our political or economic strategies. And therefore, today's seminar and the topic at hand, which is the impact of global chains, of changes in global value chains, force us to look at India and also look at India within this region and to seek and identify opportunities that allow Spanish companies and the Spanish economy to take advantage of this opportunity and this region. And this is the objective of this seminar. And with this we also fulfill the objective that we have as chambers of commerce, to support companies, to share information, to generate debate. Because in the end information is critical in companies' decision-making and our responsibility is to share information, to provide this information and to attract the best, the best professionals, the best politicians to these debates.

 

Immaculate Riera: [00:13:22] And the best.

 

Immaculate Riera: [00:13:23] Entrepreneurs. Not from the experience, not from the vision and from the support that companies will receive, from.

 

Immaculate Riera: [00:13:31] The Chambers of Commerce.

 

Immaculate Riera: [00:13:33] And from instruments.

 

Immaculate Riera: [00:13:34] So important.

 

Immaculate Riera: [00:13:35] Like the Consejo Foundation. This is the objective we share, President.

 

Immaculate Riera: [00:13:40] And therefore.

 

Immaculate Riera: [00:13:41] It's a pleasure to do it here today. And I also want, since we are in the framework of bilateral relations with India and wanting to strengthen this Spain India axis, I cannot fail as a Chamber of Commerce to thank you for the work you do. Also the Spanish Chamber of Commerce in India, a great Chamber of Commerce. We had the opportunity a few weeks ago to be with the Secretary of State for Commerce in Delhi, organizing a seminar, a business forum. We also had the opportunity to be and share this seminar with those responsible and with the president and the board of the Spanish Chamber of Commerce in India, which is doing a wonderful job also as an instrument there to support our companies present there. and above all to support these bilateral relations that ambassador are important, they are growing because the data show this growth not in terms above all. Spanish investment in India, but they have great potential. This has always been something the minister has believed in. That's why we thank you so much for being here and doing what.

 

Immaculate Riera: [00:14:58] We believe, too.

 

Immaculate Riera: [00:14:59] From the Chamber of Spain. So thank you very much, Ambassador, for all your efforts and that of the embassy in this direction. Thanks to the Consejo Foundation and thanks to all of you and to ICEX as well, especially for being here and for sharing this seminar, which we hope will add value to this decision-making and to this reinforcement of bilateral relations. Thank you.

 

presenter: [00:15:29] Well, they are going to allow me to take a break from the order of the program that was there. As you know, in the second session we had Alicia García Herrero who entered online. As there is a slight jet lag and she has made a very precise space for us in her schedule. Hello Alicia, how are you? Thanks a lot. Come on, The President. The inauguration has given us the approval for Alicia to enter now. Well, we altered the program a little and then we continued with the president of the Foundation. Thank you very much, Alicia. The word is yours.

 

Alicia García Herrero: [00:16:06] Even though they have done me, they have done me this great favor, because normally I don't need to do these things. But today we have the president of Taiwan here and I can't be late. It is a matter of protocol, but I am very interested in this discussion that is going to take place today with all of you, because I am firmly convinced, after many years in Asia, that India presents the greatest opportunity for Spanish companies in this world. that changes. And I'm going to say it that clearly. The reason India presents this great opportunity is not just geopolitics, although I will talk about that. It is pure and simple economics. Fundamentally, I am dedicated to numbers, as we say in Spanish. They sing and sing more and more clearly. The growth model of the Chinese economy is exhausted. Not because. There is nothing strange or negative with the Chinese economy. It is the law of gravity. That is to say, when an economy reaches a per capita income of $10.000, $12.000, like the current Chinese economy, it is very, very normal for growth to slow down rapidly. It is the theory of convergence, nothing more than that. And now I am going to go into the fact that there is a lot of wind, unfortunately, against the Chinese economy, but without even mentioning that, we have to understand that the law of gravity applies to everyone and that no country will pass with India too. When this per capita income arrives, it can grow by 19 or 10%, even 2010%, as China grew in 2.4. In addition to that, the factors that are going to slow down the growth of the Chinese economy to more or less 2035% by now 12, that is, in XNUMX years.

 

Alicia García Herrero: [00:18:28] Those factors go beyond the law of gravity. One of them is aging, something that India does not have as a problem at the moment, quite the opposite. The dividend is positive, the young population dividend and there is another very important dividend that China is running out of and that India has, which is the urbanization rate. China already reaches an urbanization rate of around 62%. And in India we are talking about 30, 35, that is, the space, which is what China had with a per capita income similar to India, the space that China has to urbanize and what this means for Spanish companies. Construction, obviously renewable energy companies, because India is going to have to urbanize in another reality, which is the reality of climate change. So these are huge opportunities. Also, unlike China, I mean it has helped China. But I am going to explain why it is becoming less and less helpful to China. The model. The Chinese development model is based on excess savings. If China has so much savings that it does not need the savings of the rest of the world and this is very good for avoiding crises, we understand this very well as Spaniards, because in Latin America the opposite is low investment, dependence on foreign savings. India has more investment than Latin America. Savings are not as low as Latin America, but structurally they tend to have a current account deficit, lately not very large, but a deficit.

 

Alicia García Herrero: [00:20:12] What allows that? From Spain's point of view, a financing opportunity that China does not give you because China does not need it. When I said that this is already a problem for China, I was referring to the fact that the capital, the accumulated capital stock in China, is so high that the profitability of investment is increasingly lower. That is to say, we are already talking about a very, very low return on investment similar to Japan, because there is this excess of savings. India has a much higher return on investment because it has to do everything or not everything, but much more than in China and on top of that it needs foreign capital. This is our great opportunity. Additionally, and this is related to what I had mentioned about the dividend. The dividend of the young population is only a dividend and we learned this with the. With the movements, not in 2011 in Islamic countries and what was called the Arab Spring, the dividend of youth is positive if jobs are created. If there is no employment it can be a problem. So India needs and is doing so, greater manufacturing investment in the sector, more productive in that phase of growth and where more productive employment is created so that this urbanization towards the cities is accompanied not by unemployment, poverty, but by employment, productivity . So, European companies have characterized this, of course, even in China, in their moments of greatest receipt of direct investment by being engines of job creation in export sectors.

 

Alicia García Herrero: [00:22:04] This is what for me that marriage is, let's call it that, between Europe and India. Investment in manufacturing sector. Create quality employment. And in this way the ability to generate goods that India consumes is internal. That India does not reach a huge current account deficit, that it has to finance more and more expensively, not that India is produced for India, partly with Spanish European foreign investment. For me that is the model to follow. And therefore, I wanted to simply comment that this is our great opportunity. I finished because they have been very kind, so I am not going to steal a minute from them. Nor do I end up with two ideas from an institutional point of view, as we well know, there is one. There is a very clear understanding of this opportunity. At the time I was talking about two summers ago in the summer of 2021 and I collaborated on a report for the European Parliament about this opportunity. What can India offer Europe? Negotiations for a trade and investment agreement had just begun. A complete agreement, let's say, economic, between the European Union and India. This agreement has a deadline that could obviously be extended, but the key here is that we take advantage, not the pressure of that deadline. I think we're talking about another six or seven months, if I remember correctly, and that's where we have to hit the accelerator. And here a note of caution, because we have just had the first Trade and Technology Council, not Red Technology Council between Europe and India, with high-level ministerial visits in.

 

Alicia García Herrero: [00:24:21] Nobody can tell India that it is not trying, because Europe has to try it just as well and in my opinion it has to put it aside, not because it is not important for Europe, because it already knows what That's what I'm going to, what I'm going to now, which is Ukraine and the sanctions. I am firmly convinced that Europe has to keep its grip on that war and win that battle, but it does not have to abandon the possibilities of generating relevant long-term synergies with a country like India. These two things have to confront us due to the possibilities of very, very specific minuscule sanctions that should in no way block the long-term image. And therefore, as a European, I hope that we can see the forest a little and not the trees and that we can launch into this negotiation at full speed, because I believe that this not only solves a problem of growth in Europe and markets, not in It's here, from China. But without this, it is not even a market that is absolutely necessary for us, but also in my opinion, it gives India the opportunity to create the employment necessary for a more balanced development with less income inequality, more productivity. , but also, but also create a credible, solvent plan for its energy transition through this agreement with European companies. And with that I end up on point, I think. And thank you very much for your attention.

 

presenter: [00:26:16] Thank you very much, Alicia. Well, now we return to the order we had in the program, Dear President Juan Ignacio Entrecanales, President of the Spain Council Foundation, India. Please take the floor.

 

President of the Spain India Foundation: [00:26:33] Well, thank you very much, Alicia. Like. Like. We've already started. I'm not going to give you the introduction. Yes, Yes. I thank Inmaculada first of all for her support of the Board of Trustees of the Foundation. You are a wonderful employer. And you also leave us here to do the third act of the Observatory. Thank the ambassador, who already seems to be signed by the Foundation, but. But he is always a key partner of the embassy and he always comes to us and talks to us. Of course, Minister, for coming. And Alicia, who made a wonderful intervention. And to the representatives of Airbus Defense and Space Machine, Indra, CIA Automotive and ICEX. Well, it is an honor that you can come here today and tell us your visions and what you think about the issue of supply chains, resilient supply chains. Just a second to tell you what we have done at the Observatory lately. We have, you know that the objective is to deepen Indo-Spanish cooperation within the framework of the Indo Pacific. We started with Raja Mohamed, who understood what India's vision was for the Indo Pacific. We continue with representatives of the European External Action Service, Richard Levels and David Greengrass, and we talk about Global Get Away. And finally, Dr. Samir Saran gave us a talk on security, governance and maritime connectivity. And in all of these, all of these Observatory meetings, the focus was on resilient supply chains in the Pacific. Therefore, the media and companies like us give it this importance, because I believe that it is very important to be able to talk about this issue today. And finished. To get into the topic now. Interesting, not marketing the foundation, but simply thanking the patrons for supporting us, because this observatory thing is thanks to you, the patrons. So I give the floor to the ambassador. Thank you so much.

 

Ambassador: [00:28:51] Thank you very much. It's just the pleasure to see so many people come here to this. You know I was telling me carnals. The next time, I should right of my speech and speak in Spanish given interview to go on the radio in Spanish because I would sit down in the ready to do it I can understand completely, but it's difficult for me to speak at live in Spanish and so all speak slowly for those of you understand? English. But speak slowly, still. This question of chance has been on the day for a very very long time. And it's not just now in fact if you look at the history supply chain moment has started in fifteen a China rising. De mine reason by people supply chain move to countries like china hotels low cost the Wall criteria for business words it go to use in a place Where is lost evil didn't look at political risk that look at strategic issues the just look at low cost and they realize that the cost benefits out is all other factors, but still around a thousand footing fifteen the cost started going down If you look at fifteen a lot of companies started moving out of china De ver si te vende do other places, but started moving out of china. Then COBIT happened. And during covert supply chain description was it at the worst of semiconductors per paths visit materials and suddenly they realize that focusing all your attention on the one country one is actually an iris Category so company started looking at moving from low cost to low risk like immaculate seed from Justin time to Justin kids.

 

Ambassador: [00:31:12] What does it mean it meant companies started to look at. How can you be sure? Thank you. How can you be sure? How can you need? Sure What they do on sharing near Sharing is actually very difficult. It cannot happen. So the new things that is coming up lives french sharing. What is you go to countries with a friendly countries? But it is where you know that in the long run you can manage their risk. Much better than you can manage it in the country. But you have no control. So is what it happened. And supply chain started to move. But when you ask you really possible because supply chain stick long long time to set up and play and company out. You have airbags stamp. You have colored people at a very chance. Which stick a long time to set up. So, it's not that. It s going to be easy to move and its nineteen truly In Chinese economy supply the mountain products to the rest of the world. It is not going to be easy to move it but the move as started. Because take it covert the Ukraine word description of supply Giants and most important the us dick applied. Have all work together to get look at the seventh which camote someday is back. I have never seen a seventh communication having entire on china.

 

Ambassador: [00:32:45] And what to take it again. And this situation the companies are looking for this is hand in hand. You have Mexico. You have Vietnam. You have an Asian country a lot of but no country in its own As the full capacity to absorb such movement as India. I mean have been speak good about my country. But I really look at all the factors Look at the resources. Look at this is the debt. There is no country which has to do it as indeed us today We are the most popular country in the world. The now anybody who is following matters will feel the most popular is not a good thing, but you have the most popular dedicated ready to heel in the past over walk Foss is not as killed before, but on the last then comment as putting a lot of food and the killing today. I mean, you have it so you can see across the world Dunham and company in the world today someone add the top in Indian water. It's Microsoft. Google a mny Company, Even Channel Starbucks. I mean, you need many company so talent coming out of india and the most important thing. And I m reporting myself because I have it in many places most important thing is today that I only one point full billion young people in the world. A population of that. I want point for people. The edge of five. And out of the point billion people seven hundred million people are from india.

 

Ambassador: [00:34:28] See you talking in the future of every person young person one will be in Indian so means work fuss as to come from their your consumer demands Come from there your ability. What you think as to come from the man Think about it out of the one point. William Young people over the next years one come into the world fast seven hundred million will be from India. So I have had yesterday at the discussion with a Spanish company. I will not new but dever talking about how can be source people for a global operations from India, because we need that the need in the night accounting that finances of need managers and they are not in use people when I speak to clue here in Spain the group of beans and progress of old university. I know what he did about among the students come? Spanish University of New University from private to public Webber the students come from the new so in the as a study the big time. The other dis of the geographic location. I mean, it's this only one ocean in the world which is named country that Indian notion and its right in the middle middle love sixty present of the world. Consumer traffic shipping, traffic everything to the notion through the sweet canal to the street on the hour and this way to you so that you sitting in a strategic location. You have the other things that you can do of class.

 

Ambassador: [00:36:01] China is very much again. Street. Global Times. Street. Global Times. Came to this back with Big Ben. How the world is pink fully enough to try to move over from china. And it is not going to happen and the country looks at them. Do not have the capacity to even. Compare with china will see about that. But I have to be time going to listen to and the life is that to move as startup And when the move is started india as that in the past and have been beauty because we are German friends in that is not have a great reputation of being a place where business can come back. We have a bad bureaucracy bureaucrat and I can tell you a full of red tip. But today is happening. It's a government which is leading the movement to try and get more people to camp putting up the best fold forward. It takes a long time to clear up, But it is very positive Look at diamond of money putting one point for trilling into just infrastructure to help companies no one point for trilling is what one point for million millions in all trillions. There are trillions and you are confused. That's 1.000.000.000. Right? But one so you are looking about an investment is going to give an example. Just snow. Approve the charge tails for the man who has a lady number more for the extra. That's cool story cities Thirty five market Morley logistics in the wall it is to make sure that we start helping business in becoming easy to applied art of India a Apple started us back and within to double the capacity and looking for a new look nations a lot of spanish companies which a holiday looking at it out of operations from China of Russia from other places to India and there is an agreement happening and we will do it also all more important net comment giving an incentive study which is incentive for you to rocket that of the big in central talk about the rest of the one one to but you want is that for any new manufacturing or any new company dick corporate taxes gone down to only one of the lost in the world If you look at the taxes of the lost in the world, but the incentive is de la skin its call of productive link incentive which means that more used to more argument gives you money as incentive and we have a quite of twenty seven billion dollars which is twenty seven? 27 billion dollars.

 

Ambassador: [00:39:08] For the life which is very big budget. I mean, if you look at actually seven billion to incentive and so im confident and we are going to like it I will not pick up much time and confident that the moves happening and that will be there and I want spanish companies to be out there in the front taking advantage of oldest that a lot doing it del valor doing it I mean you heard Alicia from if you look at up to get out there every day.

 

Ambassador: [00:39:42] I mean, I have Wikileaks in India. Tell me that Khomeini companies that just boring. And also there original so what they also looking at india as a big China plus the French company at the huckabees always dare I wants Spain Spanish companies to be as a to really go But here I want to see something which I have been telling a lot of people is that while the spanish big companies. No? How do you go to MIT? It's not that the door. No, everyone knows it's a strength of Spain. Lizeth Small and Miriam Industries and we need to get out to the small in memoriam. The Inmaculada has been and order of CEPYME and I had a meeting with PYME in Barcelona. It sa lot of interest in small and Miriam Enterprises We have a program call the access India program which because the big companies have all the VW te to have cancer everybody to go, they have holding information knowledge the small companies don't have and in global supply it to a small companies which need help modem anybody else So we have an access in the initiative before all these costs, but we want to partner with spanish companies to help small small and medium companies to access the indian market the difference between china in India, which Spanish companies is to china and india came to shells. Thank you very much.

 

presenter: [00:41:24] Thank you very much, Ambassador. Well, I have the honor now to give you the floor. No more peace of mind, minister, than when she was minister. She supported, of course, the Backing Foundation, the creation of the Spain India Observatory of which we have its director here and the report is the seed of the creation of the Observatory. So doubly minister dean, 1 million thanks, please take the floor.

 

Minister: [00:41:57] Thank you very much, Berta. Thanks to the camera. Thanks, of course, to the foundation. This is like an old pleasure. Two topics that I love: international trade and India, and I couldn't resist. I want to structure the presentation into three themes. First, why? Second, in what? And third, how do we start with the why and to talk about the why. That is, why would we have India and Spain. And when I say Spain in international trade I necessarily have to speak in terms of the European Union, because that is the regulatory framework for Spain, it is the European Union, India and the European Union have to do it for the same reasons. And that's where we have a great opportunity. What are these reasons? I describe them with three. You are the first one. It has to do with the global network, globalization. There is no breakdown, it must be repeated and it must be repeated and it must be repeated. What there is is a change in the way in which globalization is expressed. How do you express yourself today? It is expressed a little less in terms of fragmentation of production and manufacturing chains and is increasingly expressed in terms of fragmentation of service production chains. That is the new form that globalization is taking, a form in which both India and the European Union, and Spain also know and can swim well in that. That, that's the framework of the first R that I think we need to focus on.

 

Minister: [00:43:49] The second R has to do with risks. All the entrepreneurs who are here know that in order to make your company work well, you have to understand very well what the risk matrix is. It is the number one point of every company. The risk matrix of a company today has changed. There is a risk that before there are two risks that were previously lower in the line of priorities for companies. The first is climate change, which is increasingly having an exponential impact, but also due to the frequency and breadth of the impact. It has to be taken a lot, it has to be much higher than the top of the risk table. But the second is a risk that the company does not really like to manage, which is geopolitical risk. Geopolitical risk has to do with weaponizing international trade for political reasons or. Putting national security above the logic of international trade. Those are the geopolitical risks. The company has a very bad time because these are risks that you have difficulty managing. Because you are not in the cockpit of geopolitical risks, and so you have to try to build strategies to mitigate these geopolitical risks. Hey? You give them an answer and I believe that what we all have to say and it must be said very loudly, is that managing geopolitical risks, if we do not do it in an intelligent way, will lead to a fragmentation of international trade. and its rules.

 

Minister: [00:45:34] And fragmentation means inflation. And fragmentation with inflation means less opportunities, less opportunities for Europe, but also less opportunities for India. Therefore, we have to understand how to manage geopolitical risks and it does not mean that we have to put national security above trade. It means that we have to join these two lanes that previously ran on separate lanes. The third R is risk, it is resilience. And what resilience means is understanding that you can't put all your eggs in one basket. The basket doesn't matter. It's too risky. There are some baskets that are also more geopolitically risky, but what it is about is understanding that resilience must be built. That is what Europe has understood for raw materials, where Europe, like India, has an enormous dependence on very few baskets. And that is why the European Union speaks of open strategic autonomy and that is why India calls it maqui China, India or Atman Barat, which is nothing more than the Indian version of European strategic autonomy. Then what resilience needs is that we manage risks to manage risks. The formula is Rifkin and does not decouple. And this, I insist, must be repeated. I know that when I say it I swim a little against the current of the most geopolitical sense, but geopolitics cannot go 100% against the logic of economics.

 

Minister: [00:47:31] That is the lesson we are learning in a very difficult way in these last few months. That's why. Because? It is because India and the European Union have a high dependence on international trade for our growth. In Europe it is 43%, in India it is 46%. In the United States from 29%. Which perhaps also explains that sometimes there are behaviors that do not fit Europeans or that do not fit Indians. In China it is about 40% closer to Europe, closer to India. The European Union and India. Therefore. That depend greatly on international trade and the functioning of international trade for their growth, development and job creation. They need to learn to navigate a little more in this moment of geopolitical tension between China and the United States. They have to fight together to avoid a fragmentation of international trade rules and have a huge opportunity to solidify their own economic and trade relationship. Now let's talk about what? The European Union and India can. And when I insist, I say European Union, I say Spain with different tones. How can the two improve their economic and commercial relationship? The starting point is relatively low, then there is a lot of room to improve it. When I say relatively low it is that although the European Union is India's third largest trading partner for India.

 

Minister: [00:49:21] For the European Union, India is the 10th trading partner. India is 2% of the European Union's trade. It is small, it has grown in recent years. Is there room to grow? I think that is an interesting starting point for Spain. The growth opportunity is enormous. India is 1/7 of what we trade with China. It is 1/3 of what we trade with Japan. It is half of what we trade with Korea. There is great room to grow. Now, now we start with the. The tones that are a little specific. Which is where these growth opportunities that the European Union exports to India are. It is concentrated in 20 areas and they have been concentrated in 20 areas for 20 years. These 20 items are industrial machinery, precious stones, metals, aerospace, aerospace. I want to put this on the high list, because there are opportunities and electrical machinery there. The bulk of the European Union's exports to India are concentrated there. And the European Union and therefore Spain will increasingly compete in these products with other Asian countries that are also looking at India. Including China, which is also making its own The Rising. So the opportunities are very great, but the competition is also greater. And competition, in addition to countries that have preferential agreements with India that Europe does not have. There is a discrepancy, I believe, between the weight that India has in the international economy.

 

Minister: [00:51:34] India is 7% of the world's GDP, but exports to the European Union to India in key products are below the potential that India represents. In automobiles India 0.5% of European exports in pharmaceuticals 0.4% in the naval industry 0.1% in beverages 0.2%. There is room. The situation is much more interesting regarding services. I leave aside financial and insurance, where I have to tell the ambassador that although India has made many reforms in recent years, insurance and financial services, the European presence is quite low, but there are other services in which European presence is high and growing. Telecommunications. Computer and information services, travel, transportation, business services. It is a space for growth and it is a space for growth of great interest. Third dimension, in which you also have to pay attention. Alicia said it a moment ago. Investments. India is making a huge effort to attract investments and it is succeeding. And there is a small part of these investments that is European, but it is very small. Increased has doubled in the last ten years. We have spent more than 3 billion European investments in India. We are at 6 billion of investment in India, but on a total of 63 billion, which is what India has been able to attract in this last 2022.

 

Minister: [00:53:32] And this European investment only represents 1% of European foreign investment. Then there is a large space. Also so that European investment from Spain is directed to India. Third part of this discussion. How do we do it? Here comes the most, I think, most appealing part, Ambassador. Instead of. In a previous life I was involved in some way in launching negotiations for a trade agreement between India and the European Union. It was back in 2007. We haven't made much progress. But maybe today we have. Two reasons to do it. Geopolitics pushes us and the economy gives us a huge opportunity. That's why I think we have now that all of you, all of you, should be knocking on the doors of the Ministry of the Ministry of Commerce, which is going to be knocking on the door of the European Commission in Brussels and also knocking on the door of the Ministry of Commerce of the Government of India. Because I think there is an opportunity here to build. Something. Both Europe and India are going to have to modulate their expectations. The question is how far they are going to modulate. Europe, which is negotiating with India, but also with Indonesia and which has negotiated with Vietnam, will want to ensure that the agreement with India is not far below that standard, because it is the standard that is working for it at the same time. India. That it is also negotiating with Canada, with the United Kingdom, with the Gulf countries, but has recently refused to negotiate with Arce.

 

Minister: [00:55:35] It also has to find a balance that fits with the negotiations that India is also making with other countries. Geopolitics cannot be supported by slogans; if geopolitics is important, it must be translated into concrete actions. Here we have an opportunity. A commercial agreement. This trade agreement obviously has a part that is very important for India, which is the access of its Indian nationals to the European market. And on a continent that is aging, that has very bad demographics. This is a great opportunity to add an interest that is Indian with a need that is European. I think Europe would do well to be open, generous in terms of access to Indian skilled workers so that they can enter the European market. Parentheses They have more and more difficulties accessing the American market for political reasons. All the more reason for Europe to double down in terms of the entry of skilled Indian workers. Second second task that I am going to give you, in addition to a trade agreement, there is an investment agreement in contention. In the year 2016, India decides to renounce all bilateral investment protection agreements and it does so for its reasons. I want an investment on your terms. But you also know that the investment has to be on your terms and on the terms of the other. There is an opportunity now to offer Indian companies and European companies a framework of legal certainty through a new investment protection agreement.

 

Minister: [00:57:40] And that for the European Union is going to be decisive in being able to pay more attention as an investor to a continent, to a country that is a continent that is India. Third issue that the European Union and India have to work on is the issue of data governance. If services, and in particular digital services, offer European companies and Spanish companies incredible business opportunities, we have to ensure that these opportunities are supported by data governance that is coherent between India and the European Union. Hence the importance of the Council on Trade and Technology, which the European Union and India have launched. It's true. The first meeting took place recently in Brussels. I think it could have been done a little better. We are going to ensure that this is the case in the second edition of this Council, because what we need is a regulatory framework for data protection that is compatible. There are other countries that are trying to make it compatible for them. Now, what we have to ensure is that the European Union's regulatory framework for data protection also responds to our interests. I have two tasks left. A Sustainability standards. And here we need to have an honest discussion. We need standards that protect the environment and protect workers.

 

Minister: [00:59:18] But we don't need protectionist standards. And if we continue to insist on protectionist standards, there will be pushback from India. And if we continue to want them to be just our standards, they will tell us that we are neo-colonialists. Let's seek to build those standards together, because India also has a serious sustainability problem. Because the Indian worker is also increasingly less willing to be exploited at work. Not because the Europeans tell them so, the Indian citizens are telling them so. There is an opportunity to build a new framework, to build standards for environmental protection, for the fight against climate change, for the protection of workers, because it is in the interest of both parties. The last one is the last one, but for me it is very important. Together, India and the European Union should work for the World Trade Organization to provide them with a framework of protection and stability for their international trade. Because they are both great, because they both have a great dependence on trade and because what the WTO can give them is a network of security, protection, and transparency in a time of geopolitical turbulence, I conclude. I think that geopolitics gives us an opportunity, but now we are going to have to make serious political decisions to translate that opportunity into something that will allow us to perhaps return to this room in five years and show much better trade figures and investment figures. higher than the current ones. Because it is possible. Thanks a lot. We continue.

 

presenter: [01:01:16] Well, you are going to allow me to apologize because the disruption from before has completely disrupted me and I should have presented my present as president because the minister, having presented the minister conveniently, has been able to passion and I have given the floor directly to her, I have become my president. My apologies, President. After her intervention, you can, if anyone has any questions, we will have the microphone so you can ask them.

 

President of the Spain India Foundation: [01:01:42] That remains. This works? Yes, it is very, much more natural to start with Alicia.

 

President of the Spain India Foundation: [01:01:49] And what I tell you.

 

President of the Spain India Foundation: [01:01:54] I give you three. Three lines first. Alicia. The ambassador has said that he is from Nautica, but. But she is an academic researcher at such prestigious think tanks as Bruegel and Mercedes. She even likes BBV. As an economic affairs advisor. And she has an Asian vision in creating chains. She has a vision for everything we are talking about. Fantastic. And the minister? I'm not going to wind it up because it's very long. But first, the last time I was with her we were with her. With a mask in the middle of COBIT, which is what Berta said, that we presented the report 20 20. And what made us come to this observatory? But she has been Undersecretary General of the United Nations, the International Trade Center, Chief of Staff and Director General of the World Trade Organization and its Sherpa representative of the G20. And I won't say anything else because I've already said it all, all of it, and it was very good. Only me. If you want, I'll break the ice if that's okay with you. I also give an example of what is happening to us at Acciona, which is that we have a lot of production or business in the United States of wind and photovoltaic, with many contracts, many megawatts contracted and suddenly the United States says that we cannot buy nothing in China, which increases our cost, but does not increase our income because it was already contracted.

 

President of the Spain India Foundation: [01:03:32] That has happened to our subsidiary Nortec. Regarding the whole issue of wind turbines and our photovoltaic projects, we have started to buy in India, which, as the ambassador said before, has improved, they continue to be competitive in price and the whole issue of quality has improved a lot. Yes we are buying in Vietnam, but the Americans give us traceability of what of the materials, of the raw materials that they use for the plates and they suspend, they suspend. So I wanted to comment on whether this strategic autonomy of Europe, how do we do in Europe within the framework of a confrontation? United States, China How? As? How we. How can we be autonomous? Or how we can set our strategy to be competitive and continue being able to work in the United States, which I have understood very well with the 20% 40, I have understood that, but. Arantxa. I don't have to give you this.

 

Minister: [01:04:44] Well. European strategic autonomy. Open autonomy, because there are also some who want another type of autonomy. What they want is a kind of protectionism. This is not when one represents, when trade represents 43% for the European Union, for the growth of the European Union, which is what it is, the commitment to strategic autonomy cannot be closed, it has to be open and Strategic autonomy has to be about providing ourselves with the ability to act, even when our closest friends do not want to go in that direction. And strategic autonomy? Which is with respect to everyone, but it is also with respect to the United States, which has a behavior in trade policy that is not ours. And we are seeing it constantly. The United States today does not have a trade policy and it does not have one, not because the administration does not want one. The Administration wants to have a trade policy, but it has a Congress that has the authority in the United States to make trade agreements, which does not support it in its desire to build a trade policy for the United States. Europe does have it and wants to exercise it. So, there is a first point of this strategic autonomy that has to do with having a frank discussion with the United States, how far they go and where we start.

 

Minister: [01:06:15] And that is important because we are looking not only at the issue of traceability in raw materials, but also if we take what is happening on the issue of climate change with the inflation Reduction Act, where you You also have unfair competition from a partner that is very important to you given the overlap of our company and the overlap of our production chains. And furthermore, given that we are also fighting together in another field, which is that of security with that capital letter. Then I believe that we need to have a dialogue with the United States. I frankly believe that we have been a little timid with the Reaction inflation. We should have been a little tougher. Being tough on trade policy does not mean being unpleasant on defense and security issues. It is defending our interests, which we also have to defend. 1/2 of the autonomy of European strategic autonomy has to do with China. And that has to do with what type of economic commercial relationship we had with China. I like the idea that High Representative Borrel has put this on the table of the heads of State and Government and that there will soon be a discussion. We know we need you as partners, we know that.

 

Minister: [01:07:41] The.

 

Minister: [01:07:43] We want them as partners because there are systemic issues like climate change, where they are the number one emitter of CO20 in the world. It's not worth it for us to decarbonize if they don't do it. We know that we need them to reduce the problem of over-indebtedness in many developing countries, in which they also have to provide a response. Now there are other issues where they are our competitors and we also want to be very frank with them. To what extent are we going to accept that they are our competitors? And there is another part where we are rivals, even rivals, some say systemic. Then, Europe also needs to define very clearly what this strategic autonomy is with respect to China. I think it's smart to do it with that triptych. And I think it is important to send a signal that there are also spaces for cooperation, especially since China represents 15% of world GDP and XNUMX% of international trade for the European Union. Then let's start from a bit of this economic rationality to define what are other spaces where national security also asks us to protect our national security interests and to do so in a very clear way and to do so in a very forceful way. And in all this, the United States and China let us strengthen our ties with other countries that are in the same situation as us, which is India, which is Vietnam, which is Korea, which is South Africa, which is Kenya. Those who are asked to choose between one and the other. And we all know we don't want to have to choose. Well, maybe yes, if we strengthen the ties between us a little, we will be a little stronger in this not having to not want to choose.

 

President of the Spain India Foundation: [01:09:44] Very good. Thank you very much, Minister. Does anyone want to dare? Cristobal.

 

Audience 1: [01:09:57] Yes. Yes. Thank you very much.

 

Audience 1: [01:09:59] I wanted to ask you a question a little more about what the minister had just said. The Global Gateway. This is a novel initiative of the European Union that has been underway for some time. It is a bit of the answer to China's Silk Road, with three centers in Latin America, in Africa and in Asia, in the Pacific. How does the minister see a solution for project companies in that area? Because we already have some idea of ​​what we can expect in Latin America. In fact, there will be the European Union, CELAC Summit in July, but in the beautiful Pacific I still think it is somewhat undefined, I don't know if from Paris or from Brussels. The minister has a little more information about this. Thank you.

 

Minister: [01:10:59] Yeah, well, first, I don't like it. I mean, I like to think that what the European Union is discovering is that in a multipolar world it has to take care of all the poles. And not only from some poles. Until now it only dealt with some poles. And we have discovered that there are other parts of the world where we have not worried, where we have not, perhaps we have understood what the expectations and needs were and where we have to be more and more present. And we want to be because. Because we are a pole too. And if we want to continue being a specific pole, we have to be careful with others, all other spaces in the world that have, I insist, the same difficulties as us in avoiding being attracted to a new bipolarity that has a lot of systemic rivalry and Global Gateway is . The European Union, recognizing that it had not paid enough attention to the need that many countries in the world have for sources of financing for their energy transition and for their digital transition, which are the same needs that we have, which is why we have created the Next Generation UI. Then let's imagine that the Global Gateway is not the answer to the Silk Road. It is the twin of the Next Generation IU, which I think is a little more intelligent in terms of political presentation. This Global Gateway is financing where loan and guarantee are mixed and above all, a very important contribution of public guarantee to make Rifkin investments in countries that have profiles that perhaps on paper have a higher risk profile.

 

Minister: [01:13:04] I'll give you an example. We have just done an operation with Global Gateway in Namibia to support the generation of green hydrogen in this country, with Global Gateway, with a combination of loan and guarantee and a contribution of local capital that somehow comes to offer a quite intelligent cocktail. Let's do the same exercise a little. In Latin America it is a bit of the meaning of the European Union, Latin America, CELAC Summit and it is what we should be doing looking at Asia with great interest. We can do it in India, looking for renewable energy projects, where there is Indian technology, but a need for investment in the solar space. It can be done in terms of infrastructure. The ambassador just said it One of the great difficulties in expanding value chains in India is port infrastructure, roads in space, air infrastructure, pipelines, water, waste. Let's do it with India, let's choose the four major projects in which Europe, European companies. But European capital can help a country that needs foreign investment today. And let's do it perhaps with other partners in the region who also have the same idea, similar instruments: Australia, Japan, Korea, local capital. Then we have the instruments, we have them. I think what we need is a dialogue with the countries where they find an interest and we find ours.

 

Immaculate Riera: [01:15:10] Cristobal.

 

Audience 1: [01:15:18] Well, I'll take advantage, Minister, I have to thank you for this intervention against the current. It has been magnificent and I have enjoyed it very much. Apart from Global Kairos, which we have discussed at the Indian Observatory, we have also discussed maritime security and governance, which are key in space in the Pacific region and Indo-Spanish cooperation in the region. We have the feeling that India is increasingly looking at Europe as a strategic partner for Asia and the Pacific. There is a huge opportunity. But on the other hand, Europe is also not considered a solid geopolitical actor in Asia by certain countries, specifically in the context of security and governance, for example, maritime. I wanted to ask you what we are missing and if we are going in the right direction to make Europe a geopolitical actor in the region.

 

Minister: [01:16:18] Well, to be a geopolitical actor, what one needs is a political decision to be present in each and every one of the spaces that are priorities for our partners in the Pacific and not an opportunistic and not a presence, you know? Here yes, but not here, on this issue yes, in this country yes, in this no, why not, we have a limited military presence in the Pacific. There is a country in the European Union called France, which has a clear military presence in the Pacific because it has part of its territory and its colonial history in the Pacific. The rest of the European Union does not have it, but that does not mean that the European Union does not have to be interested in what is happening in that space, nor that one needs only to send aircraft carriers to deal with maritime governance problems. To deal with maritime governance problems. What is needed is a constancy of European interest, from the community institutions to the Member States, in deploying its full impact in that region. It has not been the case. And we now have an opportunity and perhaps also a need to do so. And finally I would tell you that evidently the world today is not only multipolar, it is also more transactional.

 

Minister: [01:17:57] And we Europeans have a bit of difficulty with a more transactional world. And we have to learn this too. Where you also have to enter a little into the transaction game. We have our interests and we have our values ​​and we don't have to give them up, but we have to be smarter about using and protecting our interests and our values ​​than just saying Hey, sign here, this is it. This is the standard, the temper and. This is the reality of the multipolar world, where what is needed is a little more waistline in trade issues, in issues of protection and defense of human rights, in defense of global public goods, or also in those of the defense of freedom of navigation. Which, I insist, is fundamental not only for the European Union, but for many countries in that region, because one also has to look at a bit of economic rationality in these moments where it seems that we are throwing economic rationality out the window. When you look at the importance of international trade for most of the Indo-Pacific countries, there is a lot of room there to make a more strategic alliance, I would say.

 

Audience 2: [01:19:26] Yes. Good afternoon, my name is Ignacio Palao, I am an internationalization consultant. I liked it a lot. When you are focused on the issue of selecting the industries to attack those sectors that the Spanish industry knows very well and that is very successful. My question, we have learned in countries as large as Brazil, the United States, those mega continents that we must attack countries in certain geographic areas. My question is India, where should I start?

 

Audience 2: [01:20:00] Or where it shouldn't be.

 

Audience 2: [01:20:02] Go to have or guarantee some success in entering that huge market? Thank you.

 

Minister: [01:20:11] Well, first I would say that you have to go, you have to go. And I haven't seen much go. Lately I spent a little time in Europe. Lately I've been in Germany. I live in France and spend a bit of my time in Italy. They are going. We are going. Well, I am waiting for the great Spanish commercial offensive in India. Hey. One chooses. You choose if what you are going to do is a great mission in terms of services and you map which are the states where the services, especially digital services, which are, which are on the rise and where India has a profile very interesting, or professional services for the company, where there is also a large space. You're a consultant, you know how to do that. You take a map, look at your commercial opportunities and set up a great operation of Spanish commercial presence, infrastructure, another great space where in India, if you see what is happening, it is a great effort to transform its infrastructure profile. Well, then we have to discuss another series of issues. Other issues must also be discussed that cannot simply be swept under the rug.

 

Minister: [01:21:42] Should we discuss what are the conditions of the company's access, what are the guarantees, what is the legal framework to protect the investment that is directed there, what space is there to compete with the local operator? But I think all this needs care and attention and watering. And this is a bit of it. I want to think that this is the meaning of the foundation. And I want to think that this is the meaning of an event like this. Then I would encourage you to organize the great Spanish landing in India in the defense industry, a sector that is growing exponentially, where we have very interesting spaces of complementarities, of technology that can be contributed, of investment that can be contributed. I want, we want. To pay more attention not only to the Indo Pacific, but to India, in a more specific way, small, aside. The Prime Minister of India is coming to Paris on July 14. The Prime Minister of India is the guest of honor of the President of the United States. It's not by chance. This is not chance.

 

Minister: [01:23:04] Anything else? Well, truth be told, there are many companies that are also here, that we are active in India. Yes, we need government support to give us visibility. It is true that large companies, as the ambassador said, move better, but for this entire group of smaller companies, the support of the Administration is very important. And do we finish a comment from Lira Podemos? Yes, he is quite intelligent about Lira because it affects us and we love it. In the United States it is competition because it does not affect. They don't have to give you a subsidy, but it affects your taxes. And I know that in Europe they are starting to look at it because it has been. I think it could be very interesting that Europe or something also related to the IRA. And up to here I can read. Hey, thank you very much. Thank you very much, Minister. And how are we on time? I guess bad, as always. Oh perfect. Well, we move on to the next ones.

 

Minister: [01:24:27] Well, thank you very much. Thanks a lot. I hope I don't play again. Now the second one is going to start. The last panel. The Spanish company, faced with the challenges of supply chains in Asia two points, India, as an alternative in relocating production to Asia, is going to introduce the panel Jaime Montalvo, the director of International of the Chamber of Spain, and we will tell with Eva Pulido, the head of the Logistics and Supply Chain Department of ICEX. Manuel Galán, Head of External Relations, Public Relations and Protocol of the Port of Barcelona, ​​will virtually enter you. María Ángeles Martí, Director of Programs for Airplanes, Tanks, Transport, Airbus and Alan da Silva, independent director of Mandrake Automotive, will be Cristóbal Alvear, the director of the Observatory. Thank you so much.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:25:17] Thank you very much, Berta. President. Minister González Laya. Ambassador. Authorities. Panel colleagues.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:25:33] Ladies and gentlemen. Friends. All.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:25:37] Well, I want to start by reiterating the Chamber of Spain's gratitude to the Foundation, to the Ambassador.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:25:45] To the minister, for giving us the opportunity to celebrate this event with all of you. We just listened.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:00] A masterful intervention by Minister González Alaya and we have also had it.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:06] Throughout the interventions of our authorities.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:10] The best possible introduction to the table that we are going to have. They have done the job for me. I want to start by thanking you very much for that too. Well, not just some.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:22] Words before giving way to Cristóbal and our table companions.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:32] You have a challenge ahead of you. Cristóbal because also.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:35] Many things have been raised in these last few minutes.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:40] And I think.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:41] That we can agree. I don't intend to make a summary, we are a little tight on time, so in a minute.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:48] Express that we actually live in a context in which the Pacific region.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:56] Concentrate our.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:26:57] Attention, that of the European Union, that of Spain, must do it. And where in that Indian region he will acquire a central role as a political actor, but undoubtedly as an economic actor. Our companies are active in India. Today we are going to listen to the testimony.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:16] And also in this panel where we are going to address.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:21] The opportunities and derived risks.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:24] Of this process.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:25] Of fractionation, of regionalization.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:28] From the value chains, particularly the industrial sector, and we have two industrial companies. But the minister has also spoken about the services sector.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:38] We also have the port of Barcelona.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:40] We will talk about transportation services.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:44] Without a doubt. And we also have an institution, as you say, that works with all companies in this matter.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:51] Is your manager also accompanying us? No, I think we probably won't run out.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:27:58] In considering India as a production and supply base to Spain.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:28:08] Starring these companies, but also.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:28:10] A platform towards that great Pacific market that is also integrating commercially and where complexity is increasing. I am not going to influence what has been done.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:28:24] Commented, but the minister has just made a call to get closer to working in a country that is so, so, so formidable. You are doing it. Let's get to know the.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:28:38] Your experience.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:28:40] From your companies. And me, without further ado.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:28:43] Thank Eva Pulido, Manuel Galán, who listens to us remotely, Ángeles Martí and Alan da Silva, who go to.

 

Jaime Montalvo, International Director of the Spanish Chamber: [01:28:53] Share your reflections on this topic with us.

 

Cristobal observatory Spain-India: [01:28:56] Cristóbal, you have the floor and thank you very much again to everyone. Thank you very much Jaime. We accept the challenge and are prepared to continue with this debate that has also been raised from a geoeconomic and geopolitical perspective. Minister González, Hélice, García Herrero And we are going to approach it from a more business perspective, from experience, from knowledge of the business world. It is a pleasure for me to be here, in this magnificent headquarters in Cámaras de España. Thank you very much, Jaime, for the introduction, for the collaboration and for making this dialogue possible, now the third of this year of the Spain India Observatory. When we proposed this dialogue, the truth is that the issue is easy. We had been talking about supply chains for a long time. Resilience is with us since COBIT and India as an alternative to dependency. It is a topic that we have discussed a lot from different perspectives. The complicated thing is to choose, identify and accept the right people to deal with this issue, who have the knowledge, who have the experience and who have the information. And I have to say that today we are lucky to have who needs to be on this panel and the companies that really know the challenges. Those in supply chains. Today Eva Pulido joins us. Eva Pulido is the head of logistics and supply chain at ICEX. She has more than 30 years of experience. She has been General Director of Intervention in.

 

Cristobal observatory Spain-India: [01:30:35] At Eneko she has also been deputy director of business internationalization at ICEX. That ICEX has decided to have a supply chain department and has put a person of Eva's level to direct it, shows how important supply chains are today in the narrative of the company's internationalization. Welcome to Eva. Thank you so much. From Barcelona we have Manuel Galán, who is director of External Relations of Protocol and Public Relations of the Port of Barcelona. Thank you very much Manuel for joining us. He has more than 40 years of experience in the sector. He is also director of the Governing Council for the Promotion of the Port Community of Barcelona and General Director of the Missions organized by the Port of Barcelona. The POT of Barcelona, ​​without a doubt, plays a fundamental role in the supply chain of Spanish foreign trade companies. And without a doubt, Manuel, with so many years of experience, knows very well what the challenges are and what the trends are that maritime cargo traffic is going to face in the coming years. Thank you very much, Manuel. We are also accompanied by María Ángeles Martí, with 23 years of experience in the aeronautical sector. She is the Director of Aircraft Programs, Bankers, Transportation and Mission and a member of the Military Systems Executive Committee at Airbus Defense and Space. She has a very great translator in her own company, where she has been program director for the 400 m and 350.

 

Cristobal observatory Spain-India: [01:32:13] And we are lucky to have Airbus, which has given us one of the greatest bilateral joys in recent years. With the purchase by India of the 56 aircraft, 295 of which, by the way, have had their first successful flight. It is a truth of the day, a true joy for those of us who dedicate ourselves to bilateral relations. Mariángeles knows very well the challenges of supply chains in highly technological and fair companies. Airbus 125 has extensive experience in a supply chain that pivots between India and Spain. Welcome! Thank you very much for being here. María Ángeles And we also have with us today Alan da Silva, who is an independent director. Indra has more than 30 years of experience in relations with India. He has been responsible for India at Price Water, Jason Coopers and he knows very well where we come from in India, what India was like and what it was like to work with India a few years ago and the opportunities it offers today? India as a market not only for attracting investments, but also at a commercial level. For his part, Indra is possibly an automatic aunt, one of the companies with the largest number of production centers in India. And there is also knowledge in the automotive components sector, which will help us a lot to understand what the challenges of supply chains are.

 

Cristobal observatory Spain-India: [01:33:43] Thank you all very much for being here. It is a pleasure to have you a little so that we understand how we are going to organize the panel. We are going to have four rounds of questions in which we will first address the current situation of supply chains and how the respective institutions and companies face it. Then we will discuss Asia's role in those supply chains and the opportunities and opportunities that manufacturing in India offers. Then we are going to go more towards the idea of ​​alternatives to dependence on China and how India can be an option? And we are going to end by talking about future challenges and for that we are always going to start with Eva, who is going to give us the general framework from ICEX. We will continue with Manuel from the perspective of the maritime transport sector and we will finish with María Ángeles and Alan, now from a business perspective, from their different sectors. Well, thank you very much. Eva starts today, today, with you in recent years there is a term that we have said a lot about supply chain. It is the disruption. There have been reductions due to the different crises, the pandemic, the war in Ukraine, the energy crisis. How do you think the pandemic and the war in Ukraine have transformed global supply chains? And what projects did you develop to help the Spanish company face these challenges?

 

Eva Icex: [01:35:13] Well, thank you very much. Thank you very much for inviting me to be here and thank you very much. That was for this round table. The information that I am going to provide is from experiences that we have with companies, with all the companies that we work at ICEX and as you said and indeed, the global economy has been subjected to these two recent great shocks of the pandemic and the crisis of the Ukrainian war. And this has called into question the reliability of long and complex supply chains. Before addressing what we think from our experience is happening with companies in the present, which is actually the future, and the future, which is the present, I would like to address two issues that have been discussed here throughout this morning and that is that these disturbances in the supply chain have really caused two situations that we all know, which is the increase in transportation prices and the shortage of certain goods and therefore the consequent supply crisis only. And although we know it, I would like to point out this price increase because it has been a reality and it has impacted and has had an impact on the inflationary process and this price increase. We all know that a container, although perhaps I am getting into the theme of the person in charge of the Port of Barcelona, ​​yes that an average 40-foot container before the pandemic had a price of 1700 to 1.700 $.

 

Eva Icex: [01:36:44] At the peak.

 

Eva Icex: [01:36:45] Which was in the year 21, it reached $11.000, that is, and it was at $11.000 or around that amount. Long time to get down. Now, in the first quarter of 20 23, it appears to be around $2.500. That is to say, this has been a situation that companies have faced as a consequence of the increase in fuel prices, as a consequence of traffic jams and delays in ports, which has been a reality, but it is not a past reality. That is, the port of Shanghai, which is the main port in the world for container movement. We are not talking about the year of pandemic, but in April 22 there are statistics of traffic jams of 300 vessels to unload and as a consequence of the non-existence of containers, the price increase occurs as well as the rebound in demand and also for one certain oligopoly situation of the shipping companies, which we know are concentrated in approximately ten shipping companies and which is becoming stronger over time, allowing them to establish certain prices. Sometimes, perhaps excessive. I also go back to the issue of the supply crisis, because there has really been a shortage of certain goods that we all know due to these issues of delays in ports, the increase in demand and well, companies, I believe that when we talk Regarding certain issues, there are still no indicators that lead us to think that this is happening structurally, but three phenomena are occurring.

 

Eva Icex: [01:38:11] First of all, we had already talked about regionalization, that is, the approach to certain countries to avoid these issues that cannot, that may occur in the future, such as port jams. or the bottlenecks in the ports, and we have observed, for example, in Spanish imports, the textile sector did occur. There was a certain deviation of production towards Turkey and Morocco, but it is true that the exports of year 20 and year 21, even year 22, occurred in the year. But already in the first quarter of 23 we are observing that there has been a decrease. Therefore, regionalization will have to wait to see if it is really a trend. Here I believe that this issue has been discussed and it is a somewhat long-term issue. That is to say, the restructuring of supply chains, the deep ones, takes time, requires investment and, above all, is based on relationships of trust that have been woven for years, so we have to wait to see what happens. it is produced. Secondly, the diversity of suppliers. Naturally, because we have all observed that dependence on a single supplier is a source of vulnerability for critical goods, such as food, fuel, and technology. And finally, the third. The third issue is that chains are focusing on more agile and flexible chains, not as much focused on cost savings and efficiency as they are now.

 

Eva Icex: [01:39:39] And these more agile and flexible chains are when they are more visible, more transparent, more tractable, more integrated and, above all, more sensitive to the needs of consumers. And answering your last question, very, very quickly because I am expanding, what do we do at ICEX to impact the competitiveness of supply chains? We act in three lines. The first, try to position Spain as a logistical country, that is, a country that has a considerable number of ports, that has more than 40 airports, that has an extraordinary road network, that has a high-speed railway network, almost the same. second in the world. We think it's a territory that really me. Position yourself that way. Secondly, we continue with our traditional activity of organizing trade fair events. Right now we have been in logistics transport for two weeks. It is a fair that is the main fair event for companies to continue positioning themselves internationally. And finally we are developing a series of conferences in which we are putting Spanish technology startups in contact that develop logistics technologies in the logistics field for Spanish export companies and logistics operators. We do the first one on the 1st and I take this opportunity to invite all attendees on June 1st in Madrid, at the ICEX. And here I remain silent.

 

Cristobal observatory Spain-India: [01:40:57] Thank you very much, Eva. We are now going to Barcelona with Manuel. Has Manuel Eva spoken about this port congestion in China? About the increase in freight rates? About the problem of loss in route reliability? What do you think has been the impact of all these crises, including the energy crisis, on maritime transport? And how does Barcelona face this new global logistics situation?

 

Manuel Puerto Barcelona: [01:41:30] Hello, good morning everyone. First of all, thank you for inviting us to participate in this important event. Thank you also for giving us the opportunity and so that I don't forget. And thanking the minister for the invitation or invitation that the minister has given us, I would like to tell you that this year we are organizing a business mission to India, specifically to Mumbai from October 14 to 19, and that we will be delighted to welcome all those companies and entities that want to accompany us. For 25 years we have organized business missions with the focus, as the minister said, on reaching the country and knowing, knowing and then being able to act well. You have allowed me this small spoiler and so I will give you the introduction. Also tell you that I have given you a background, but due to a connection problem we had, I have given you the most glamorous background that we have in the port of Barcelona, ​​which is a company that is dedicated to the repair and refill of yachts. , which is Marina Barcelona 92. But the other part, the one that concerns us in this case, which is the part of the cargo, the part of the container that is harder, but not so not so not so not so flowery as This is the one that you I'm going to try to answer the question. Well, in fact, the energy crisis in maritime transport associated, as you said, with the war in Ukraine, with the exit from COBIT or with the irruptions of irruptions and irruptions of the logistics chains in recent years, among other things. What it has done has been to accelerate, not the energy transition, which is a really important area that I would like to highlight, as well as the search for alternative fuels with the aim of reducing the non-environmental impact of the emissions they produce. ships, ports, etc.

 

Manuel Puerto Barcelona: [01:43:28] Also remember that only 3% of global emissions correspond to maritime transport. That is also an important detail. So. By which I mean that things like. Like fuel, like carbon-neutral fuels or electrification of the docks in which we have a project to complete or start in 2025 26 to connect the ships to the electrical grid, which it was thought that we could develop them in 2030 2040 We find that they are going to arrive much sooner. In part and thanks in quotes to that energy crisis. That is, comment on a very important aspect that if we consider that 40% of the operating costs of a ship correspond to fuel expenses, then we will be able to perfectly understand the impact it has on prices and that it has very well reflected my my previous colleague on the evolution of ocean freight. In the last, in the last, in the last two or three years. Everything and what we were saying gradually also due to the context of the fall in demand, have also been eroded and we are reaching similar freight price limits prior to the pandemic era. Therefore, I would say that clearly, maritime transport has suffered from the energy crisis as everyone has suffered. But as resilient as it is and using a seafaring language, we have known how to weather this storm. And I would say it and leave it at that. And then, if you want, we can enter into the proposals of the port of Barcelona to also assume the situation that we are suffering.

 

Cristobal observatory Spain-India: [01:45:26] Well, thank you very much, Manuel. María Ángeles We are talking about shortages, delays. There has been an increase in prices and the aerospace sector has not been an exception. I wanted to ask you how all these disruptions have affected your sector specifically? And whether Airbus in Space has emerged stronger or not from these recent years of tension on supply chains?

 

María Angeles from Mahinfdra: [01:45:56] Well, I'm not going to repeat myself, because I believe that the fact that we are in an economic crisis that has been greatly impacted now and increased by the war in Ukraine, the COBIT exit from a health crisis and Covid 19 It undoubtedly impacted the aeronautical sector and had an impact like it had never done before, because suddenly aviation stopped in a matter of weeks. When you went to Flick Radar, which is an application that many of us use. The airspace was empty. When you go now and it is full of planes and it was the first time we saw that the sector could disappear, it was an absolute threat. There was a reconstruction and an adaptation in a matter of weeks, a few months, to the new scenario that we had never handled before. But all this has an effect on the entire supply chain, which is not a company as large as Airbus, that there are tier two, three or four companies that are smaller, have less financial muscle and that were greatly impacted, first with that pandemic crisis and now with the economic crisis. Where we were most impacted or where we have been most impacted, especially in the area of ​​raw materials, raw materials, for example, such as titanium, also impacted in part of aerial structures in assembly of structures and what and what we have and in electronic components. The electronic components part has done a lot of damage, which not only affects the tier one, but also the two three and has made us constantly readjust to those production plans that have now changed radically because we have come out of that pandemic and now Everyone wants to fly, so we are not able to address market demand and we have to pull harder than ever on an entire supply chain that is born in a situation of weakness.

 

María Angeles from Mahinfdra: [01:47:52] So industrial plans have to be readjusted, sometimes even contracts with the client have to be readjusted in deliveries that are even affected. And then we have to deal with hyperinflation, which we have also commented on, but which helps us, which has greatly affected the rise, a price scale, financing conditions that do not help small companies and that we see as suppliers. , they come more and more towards us to renegotiate contracts that are in force and if they stick to them, they see, they see that their survival could be damaged. And what does Airbus do? Well, I think he always says about a crisis. At Airbus our CEO repeats a lot and I am a fan of that phrase about a crisis. It is a great opportunity because we have learned to not only monitor and be reactive, but to go forward to the risks, to look with greater helicopter vision behind what possible threats there may be and see that supply chain with clear eyes. more collaboration, more transparency and more help. We have enabled new sources of supply, those sources that were unique, especially for raw materials, since now we have or have changed suppliers or we have now sought second sources of supply. Tata, for example, is an example of this and we have also come together at the group level, with strategies that allow us to approach more efficient contracts when we have to make contracts, especially in matters of raw materials and helping the supply chain. to take advantage of these contracts in order to be competitive in their own prices and, therefore, competitive when it comes to fulfilling their contracts with us, thus in large figures.

 

Cristobal observatory Spain-India: [01:49:40] Thank you very much, María Ángeles I speak. María Ángeles has spoken about the shortage of raw materials, about the problems that have arisen. In that sense, the automotive components industry has suffered and we have learned with you the importance of semiconductors for automobile manufacturing, which is 60% dependent on East Asia. What role do you think semiconductors have played in supply chain tensions in the automotive sector? And how have you managed to grow despite this complex environment?

 

Alan independent advisor: [01:50:18] Thank you very much for the invitation and delighted that you are with us and the semiconductor point of view. It is important that people say that semiconductors in the automotive sector have had a tremendous impact because in 2021 they have stopped producing 11 million cars. And in 2022 it has dropped 3 billion from 11 to 3 million and the first quarter of 2023 they have dropped half a million cars. It is getting better. For the effect of semiconductors and other electronic materials that is important. But the impact of this decline was more in Europe and the United States. And very little impact on the components sector and everything. In India and China. And furthermore, in 2022 production in India has increased by 20%. So. Because? Why the semiconductor? Really? Because it is that fact. The semiconductor is actually very organized in the atom. Electronic automobiles and premium cars. And this is the impact. That is why much more in the United States and Europe. So in that sense India has saved on that point. And what is also important is that the drivers come from Asia, which has always had a much better chance of accessing these raw materials than countries that are further away. And you know that the drivers of the most important country is Taiwan, where it produces the most drivers. So, one of the things that is very important here, from Automotive's point of view, was its strategy and its culture of international expansion from the beginning, when they went to South America and later in 2013 when it landed in India. It was their approach to have local suppliers. And have premises that provide value at a local level and also at a technological level in the sense of automotive, processes and digitalization. Four point industry 4.0. So, this approach from the beginning has allowed him to save this semiconductor crisis and also the circumstances that he has said have affected the former and the electronics vehicle the most. We have been able to face this crisis much better than other countries in the world.

 

Cristobal observatory Spain-India: [01:53:30] Thank you very much, Alan. He has spoken about it ago and I would like now in the next round to focus on Asia, the supply chain, the centrality that Asia has and also the relocation of production. We have spoken with Alan about the importance of semiconductors. We have also learned in recent years the importance of rare earths, critical raw materials. They are all new elements for us, those of us who are not very involved in it, but very present in the current discourse. I wanted to ask you what role Asia plays in supply chains and how important are these critical raw materials, rare earths, supplies, semiconductors, the chains themselves?

 

Eva Icex: [01:54:19] I think to focus, because when I have had to use ICEX statistics to know a little about how we were with certain Asian countries, then I am going to focus on the case of China. Okay, first of all, say that China in 20 became Spain's first supplier for the first time. That is, until then it had been Germany from 22 to 2002. The share of Chinese imports over total imports has fluctuated, going from 2022% to 3%, which means that there is effectively a dependence on China and has also been in crescendo. Before referring to the three critical goods on which Spain depends on China, I would fundamentally like to define what we understand by critical goods, which are those goods in which limited access can compromise the functioning of an economy. And, secondly, what we understand by strategic dependence, which there are also many manuals on the subject. But basically it is when a country is a net importer of a product, in this case from China, when we do import, if the country, Spain, imports more than 11% of that product from China, or China controls more than 50%.

 

Eva Icex: [01:55:34] Del.

 

Eva Icex: [01:55:35] Global market for that product. In the case of Spain, with these definitions we are strategically dependent on three products that are pharmaceutical products or pharmaceutical components for medicines, raw materials and electronic components. In the case of pharmaceutical products, it has been decided years ago that the active ingredients were going to be mostly manufactured in Asia, specifically in China. These active ingredients make us dependent on antibiotics for certain nutrients, such as vitamins, vitamin B and vitamin C, hormones and calcium. This, of course, is important for the public health systems of the countries, because it can compromise them and furthermore, the fact that diversification can be sought as a supplier is complicated because they are products that have intense energy consumption and also with a considerable impact on the environment. In the second, they are the raw materials that you talked about before, which are rare earths, fundamentally magnesium, manganese. Magnesium is used for lithium cells in robotics and other drone technologies. Manganese is used for batteries, for fuel cells, for batteries, for electricity, for cars. And there are also certain sectors in which it is difficult because the Chinese concentration has a capacity of 85% for the production of components, themes, components for electric batteries, so substitution to another supplier also seems at least less costly. and uncompetitive. And finally, electronic components that are basically lighting projectors that are used for mobile phones and computers, radio frequency sensors that are used mainly for maritime security and aviation, and finally permanent magnets that are used in wind turbines. It is true that you have seen. I don't know if you've seen in the news that the Chinese group in vision has done one. Navalmoral de la Mata for a battery manufacturing plant for electric cars. So I don't know if this can be seen as an indication of diversification and production and productive relocation in Spain.

 

Cristobal observatory Spain-India: [01:58:03] Thank you very much, Eva Manuel. Eva has pointed out the centrality that China and Asia have in critical raw materials. Asia also has a centrality in global maritime and freight transport. I wanted to ask you what role you think Asia plays in these maritime routes? And also what trends do you see in maritime transport in Asia?

 

Manuel Puerto Barcelona: [01:58:31] Well, as A has previously indicated, the fact is that to answer these types of questions you have to rely on statistics. When we have gone to see our statistics, which we have available to everyone, on our website we observe that Asia continues to be, by far, the main origin and destination of imports and exports of containers from the port of Barcelona, also in liquid bulk. If we observe, for example, all the increase that has occurred in oil, natural gas, etc. and we must also say in cars they grow, they grow a lot. We have the pandemic crisis and what has been mentioned previously. In the previous question, the semiconductor crisis caused the import and export of vehicles to be practically reduced to historical lows. And now, at the moment, above all the push that the two big monsters want to give, not China, but also India is a very important sector, the automobile sector in India. In the case of electric cars, it means that we once again have an increase in volumes in the case, such as Tesla, whose manufacturing is made in China and is aimed at the European market, enters through the port of Barcelona. and is distributed by rail system throughout Europe. But, as I told you, there is also this fragmentation of globalization that is occurring lately as a result of tensions. China, the United States, the war on Russia that we have mentioned, etc. what we have already mentioned previously is also reducing a little, but I would say very little. Trade in goods with Asia. I would say that now, for example, there are many, many companies that are trying to escape from the impact that has occurred or the derivation of the crisis from the crisis that we have gone through in recent years.

 

Manuel Puerto Barcelona: [02:00:45] No, because globalizing, that is, bringing productions closer to decision centers or in this case Spanish companies, bringing closer. And this will also have an impact on the maritime system because short-haul traffic in the region will increase, quality. The distribution. Countries like. Like, like Türkiye, like Morocco, they will have even more or a greater impact. And the only thing that also, and returning to the beginning of the Asian market, what we are also seeing is that the increase in costs that has occurred in China is forcing companies to reorganize their production in nearby countries. Above all, the big beneficiaries in this case are the ASEAN countries, also India. I believe that or we believe in the people of Barcelona that it is going to play a very important role not in the near future, but already in terms of that balance of dependence on Asia and the ASEAN countries, such as Vietnam, Indonesia, etc., that they are receiving part of the production that was being carried out until now in China and in general we would say that. And transferring it to the field of global maritime routes, Asia's role continues to be the main global maritime traffic by far. What we have done is always an analysis of intra-Asian maritime traffic, which accounts for practically 76% of world traffic. And that, well, is what we continue working on. We are going to look for new alternatives, new origins, as in the case of India. And that is where we put our everything, our effort.

 

Cristobal observatory Spain-India: [02:02:52] Focusing on India, within Asia. Mariángeles We were talking before about 295, of the 56, of the 56 airplanes, 40 are going to be manufactured within India. Like how I mentioned that bus partnership with Tata. As? How do you approach the production of these 40 in India? 295. And what complementary synergies do you see from your association with Tata?

 

María Angeles from Mahinfdra: [02:03:19] Well, the first thing to introduce is this C2 nine five, for those who don't know, the C2 nine five is a military transport aircraft that was designed. It is 100% Spanish designed and manufactured. Although it is an airplane, it belongs to the Airbus group and is within an international or multinational company. But the workload, therefore, and the knowledge is from Spain, so it is relevant to talk about this aircraft in this context in which we are today and it responds to a need of the Indian force, of the Indian Air Force to cover military transport capabilities that. Which is lacking. It is a contract for 56 aircraft with 16 that are manufactured in Spain and 40 that are manufactured in India, but for Airbus it is much more. It is more because it responds to the policies of the administration. I have to read it because it is always cheaper and what they promote is the growth of the industrial fabric in India through company collaborations. And we collaborate with Tata, but not only with Tata, we also collaborate with Bharat Dynamics and Barat Electronics, which are two companies that are dedicated to the development and industrialization of defense systems in aircraft. And this plane is an Indian plane because its defense system against military radars against missiles is going to be 100% Indian and we integrate it and certify it.

 

María Angeles from Mahinfdra: [02:04:56] And that will be the configuration of the plane. And in addition, that Tata company is going to pull an entire supply chain that will also pull all that industrial fabric within India. And specifically, what do they do? Well, Tata, what it will do from plane 17, which we already started in September of this year, will make 100% of the plane in India and it will be delivered in India. That means pulling raw materials from manufacturing, metal fabrication, integration of subassemblies and final assembly of the aircraft with its industrial flights. Inspection delivers to the end customer which is the Indian Air Force. And it's just doing to get that done. It will have to pull from that industrial fabric, from those SMEs. And we are teaching Tata and its supply chain how to be able to stock, how to be able to manufacture to be completely autonomous. In September of this year, the central fuselage is manufactured. Manufacturing begins The first aircraft will be delivered in September 2026 and in a matter of five years 40 aircraft will be delivered with a maximum of 12, so those 40 aircraft and a little respond. Maybe a later question will be the only thing Tata wants to ask? Well, surely it is not a lack that I can do much more. With Barat we have the manufacturing or integration of these mission systems because it is a military aircraft and I also wanted to highlight how we are doing it.

 

María Angeles from Mahinfdra: [02:06:31] The minister mentioned before that you have to go to India a lot, but I don't just want a lot of India. I'm going to India in 15 days, I have to go to a lot of India. My family is not very happy, I have a lot of India. You have to mix the teams. We have a footprint in India, we have a team in India, but it is not 100% European, it has a European percentage, but more and more we hire Indian teams that speak the same language, even if it is English, which also helps, but it speaks its culture and speaks and interprets those rigorous standards better than Airbus. It is like the European Community, it is full of regulations, with little waistline and it helps us make these regulations more flexible to adapt them to the Indian context, without penalizing the safety and quality of the product. So we can have mixed teams, have teams with Indian personnel who help us translate their way of thinking and their culture and we can adapt it to our processes. It is essential to be able to have an exemplary execution of a project that, if we do it well, will raise not only the Airbus brand in India, but also that of Tata and its own supply chain. For us it is a strategic project, not only for 295, but at the company level.

 

Cristobal observatory Spain-India: [02:07:45] Thank you very much, María Ángeles. Another company that has a win-win in India is Automotive and 24 production centers in 12 locations, which indicates that it is very close to where it is in the industry, to the automotive industry, to the main industrial hubs. I wanted to ask you what the main challenges for you are regarding production in India and how you have faced the challenges of such a complicated supply chain in India. So.

 

Alan independent advisor: [02:08:25] Because the most important challenge for us in India was basically how to manage the plants with the growth that we have had since we landed. That was the great challenge because we have had constant growth, except for the year 2020 21, which has reduced. Of course I said 11 million fewer cars this year, but in general it was growth. In short, a very complex task in this type of automotive sector, because it requires greater control of all aspects of business and planning, resource management, avoiding unforeseen events, because the customer's demand for quality and delivery is maximum. . So, for me, one of the things that has happened is to invest in India with greater investments. We have invested in five new factories in the last three years. So in your and investing in advanced technology what we are doing in the rest of the world in Hispania and everything. So for example globally the group. Yes, instead of around 5% of your sales in investment. But in India, since we landed in 2014, innovation was around 7%. So the increase was basically an increase in production capacity, better productivity and with advanced technologies and tools to improve the health and safety of workers. It is one of the very important areas within what we call. And then we also had an absolute commitment. Commitment in India to collaborate with the development of our suppliers. We have worked with strategic suppliers for the development of technical training, reaching agreements with universities and also exchange programs.

 

Alan independent advisor: [02:10:41] And we called the Ulysses program, where people from India or suppliers from India came to our factories here or in another part of the world and have training sessions. That was important too. And another very important issue that I have forgotten is the issue of location and having the supply right and everything. It has helped us face this challenge of decrease, because 21% of the 23.000 suppliers we have are global. They are Indian, 21% of 23.000 suppliers and normally Ci Automotive has 92% of its suppliers in the world are local. Ah, it has the factory. There you have the suppliers. But in India we have 96,5% of the suppliers we have. They are local. And all this is very important to take advantage of the resources that India itself has for your own growth. I think that is the key to being successful in India and using what is there, right? It is not necessary to send the entire team from Spain and our entire organizational chart is only two people from Spain. They are somehow in India. The rest of the team is totally local. So it is the site of the world division and that of the world leader. No one else is involved except the team. Local team. Then it's the location. I believe that India is very important, because India has enough capacity to give you the resources you need for your business set up in India.

 

Cristobal observatory Spain-India: [02:12:41] Thank you very much Alan. Thank you very much for those insights if it seems to you that the timing is a bit bad. We are going to concentrate the last two rounds on a single question and I would ask for brevity in the answer. It is quite dependent on China for raw materials, critical materials and other important links in the supply chain. There is talk of different options as an alternative, China, India. We talk a lot about French sharing between like-minded countries. In Asia we have talked about offshore and the new sarin. Without a doubt, companies are looking for alternatives to that dependency. I wanted to ask you how they are doing it. And speaking of resilience, which is where we are headed in the future, another word that we have learned very well. What do you think are the challenges of the supply chain to make them truly resilient?

 

Eva Icex: [02:13:43] Hmm. Well, regarding the first question, it is true that one of the elements of resilience in supply chains is the diversification of suppliers. So, regarding alternative suppliers to China, I believe that there are a series of countries that, due to their GDP and because the cost of production is still relatively cheap, emerge as candidates in Latin America, perhaps Mexico, Brazil and in the case of Pacific, Indonesia or India. I don't know India enough to, to, to, to see what those most positive factors really are. I think the ambassador has shown it amply. Likewise, the minister has referred to India's positive points. I think that the fact that they speak English is a positive value. Its geostrategic position that connects it with Asia It is also very relevant that it is a democratic country and eager to comply with the international order. It is also a fundamental part and also the capacity of the qualified workforce that is available. However, and both Canales and the minister had said this before, I think that for certain approaches to occur. And he told the minister that things do not happen by chance and they never happen by chance, certain institutional and political movements have to occur for this to happen. It's fundamental. And as Entrecanales said, this has to be a public-private project, institutions and public administration and political decisions have to act. And at the same time there must be exemplary behavior from large companies that drag down smaller companies.

 

Eva Icex: [02:15:27] In the case of Spain, where 90% of the Spanish business fabric is SMEs, their ability to reconvert and look towards other markets is relative, so the Administration truly has to adopt the Spanish administration and The administration of the European Union will have to take the necessary measures to make this happen. And regarding the second question of what the supply chains of the future would be, I believe that we have already talked about different issues. I believe that the issue of regionalization or the shortening in principle of the behavior of supply chains is very important, because the fewer links there are and the fewer intermediaries, the greater the ability for these business networks not to be distorted. Also, as we had said before, fundamental diversification, the diversification of suppliers that goes hand in hand with regionalization and the shortening of supply chains. And then what you mentioned at the very beginning, which was the agility and flexibility of the supply chains, which for us to achieve greater visibility, traceability, integration and to be on top of consumer demands to serve them in real time, It is closely related to the incorporation of technology and we are not talking about the digitalization and automation of processes, which is the majority of existing companies, but rather the incorporation of disruptive technologies. I think that is an element of competitiveness and it will be for companies. It is fundamental and will make the difference that some exist, that some survive and others do not, and I believe that the incorporation of the "I" will mark a before and after in the entire data collection.

 

Eva Icex: [02:17:02] Artificial intelligence has a clear impact on advanced analytics, on demand prediction and also on the entire issue of warehouse, automation, packaging and inventory management. Everything in the blockchain is going to be a fundamental element in everything that is customs transit, because we know that there are many documents and there are blockchain platforms in Spain that are developed by Spanish startups. All customs documentation consisting of commercial invoices, value statements, import certificates, and phytosanitary inspection certificates. There are many agents involved and the fact that all this information can be uploaded to blockchain platforms that guarantee the immutability of the information is essential. And finally, everything that is intelligent physical automation, that is, robotization in electronic commerce, is going to be essential for delivery and distribution, and of course, also in warehouse management. And he would end by saying that, of course, the projection towards increased trade is a reality. Right now it is a minority part of retail trade and has tremendous room for growth. And companies and supply chains, both in Vitus and Pitu Bi, have to be prepared for this distribution and it would end with distribution chains, that is, carbonized supply chains to the extent possible.

 

Cristobal observatory Spain-India: [02:18:27] Thank you very much, Eva. If we want resilient supply chains, we need maritime transport that is more sustainable and also, as Eva spoke, tending towards digitalization. As you see it? The role that maritime transport will play in the resilience of supply chains. And how important are sustainability and digitalization going to be in the future?

 

Manuel Puerto Barcelona: [02:18:54] Well, I follow a little the line that I mentioned, that Eva commented and putting it in the field of maritime transport, I believe that it has been demonstrated in this period that we have gone from pandemic crisis and subsequent disruptive situations . The capacity for adaptation and resilience, as we have mentioned, since in the end maritime transport is responsible for the transportation of 90% of goods worldwide. So, if there is one thing it is that it has known how to adapt to the times and despite the situations that were mentioned before regarding congestion in certain ports, it has not been commented on. I would also say, for example, Los Angeles, which had a really important traffic jam bringing it to our land or to the land, that of the port of Barcelona. The previous work that we have already been doing with the implementation of the strategic plans, where the focus is basically on two areas such as innovation and sustainability, ensured that the port of Barcelona did not stop and had any type of congestion. There I would also break a spear in favor of what the community is. The concept of a port community. We are not talking solely and exclusively about what the Port Authority is, but rather what it is a port, that is, what the port is in general, not the terminals and especially the stevedores, made it possible for the supply chain to not stop.

 

Manuel Puerto Barcelona: [02:20:23] It is also true that there is a diversification today of supply chains, precisely as a result of those experiences that we have lived during the COBIT period, in which certain shipowners have begun to do what we call a vertical integration. In other words, it is assuming another role, other roles that logistics operators or transitory operators assumed, and even new actors appear, such as large operators. As Eva said about e-commerce in e-commerce, the brutal entry onto the scene of what e-commerce has been precisely in that pandemic period has made the large retailers, such as Amazon, Alibaba, but also Wal-Mart or leaders are even beginning to manage maritime logistics themselves. Therefore, there is a new paradigm to which we have to be attentive and precisely the ports are where we can provide a solution, but we have to provide a solution, as we said, not advancing in the field of innovation, digitalization and not losing given sustainability, which is what we talked about previously. As an addition, I would say that, that, that, in reference also to other forms of transport, it is true that in a certain way the maritime transport starts with a certain advantage, because everything and being, as I said before, responsible for that 90% of the traffic, of the traffic or global trade, accounts for 3% of the environmental impact.

 

Manuel Puerto Barcelona: [02:22:03] And there I am still not sounding that 3% is a small figure. We believe that we still have to insist. And there, in the line in which we are working, the fact of being able to develop, as I mentioned before, the GPS in the ports, the connections of the ships to the electrical network and basically also highlighting the reality of what it is Nowadays, liquefied natural gas, which many ships and in this case we saw images of cruise ships, are already using as a priority. And our commitment is also to not only become the logistics hub that we are, the main logistics hub in southern Europe, but to become an energy hub that guarantees, from the point of view of sustainability, continuity not yyy the nourishment of what energy should be for companies and people. And for our part, I believe that that would be the vision regarding the supply chains and how they are, how they are marking that resilience to adapt to the challenges that we are currently experiencing.

 

Cristobal observatory Spain-India: [02:23:19] Study Mariángeles to finish this part of the panel. I wanted to ask you that I understand that if the 225 that is made in India is because Airbus has found a mature and capable industry to make it there. I wanted to ask you what that experience of meaning was in that sense and how you were progressing before. Do you also consider your implementation in India with this program as a platform to reach other parts of Asia or to also grow in India?

 

María Angeles from Mahinfdra: [02:23:56] Yes, without a doubt. Going with Tata is a guarantee of success. I was there seeing the Tata plants and it is a leading company, capable of making cutting-edge technology and with which one feels a partnership of trust practically from the beginning. The final, the final assembly line that we have at Tata, along with the entire supply chain to manufacture 40 airplanes, it is difficult to think that everything, all this investment ends in the year 2031. It is not logical. And in fact, the initial strategy that exists, even from the Indian government itself, is to continue increasing the number of requests with potential solutions that they want to give through the 295 platform. We are also working very closely on other applications with this plane. Right now it is a military transport plane, but through that platform you can make mission emission planes to make coast guard emission planes, maritime patrol or more military applications. And that means making developments and innovation, continuing to nourish the industrial fabric with all the elements that this type of aircraft would entail. And we are increasingly advancing more projects in this sense with them. And I also wanted to mention engineering. Airbus has a huge engineering center in India, where 95 or 100% of the engineers are Indian and there is increasingly a balance or a greater transfer of core aeronautical engineering jobs within India with highly qualified Indian personnel. . Every time we are seeing greater, greater push, greater and greater growth. That is why it is very important to execute this project well, because it can be the seed of greater growth. And we see the aerospace sector as having enormous potential within India.

 

Cristobal observatory Spain-India: [02:26:01] Thank you very much María Ángeles. Let's finish with you Alan and I go back to your experience of so many years in India and I wanted to ask you what has changed? What has changed in India in recent years? How have you seen the transformation, for example, in the automotive sector and the future? What will happen? What role will India play in the supply chains of the future?

 

Alan independent advisor: [02:26:30] I, as I said, landed in 2013, but in India the automotive components sector has changed a lot because it was a very fragmented and very local sector, the plants and everything were very fragmented and with lower quality. and the technology is very old. Back then the market was dominated by paws and cars. And India is also a very price-sensitive country. So there was demand, but with very affordable prices. So manufacturers manufactured low-range cars with lower quality. But it has changed because new players have arrived in the market, such as Mauro Suzuki, which already has 45% of the market and a Dai Kia that already has 20% of the Indian market and they have not demanded them. They have been demanding very demanding quality and quality and also technologies in the manufacturing process. And also be competitive also in price. So, the panorama of the sector has changed a lot. Now it is much more technologically advanced. All production plans are almost at European level. They are reaching levels and there it is another world. He had a tremendous advantage because. Yes, it was a group that was always at the forefront of technological issues in all component production processes and they have quickly put all their plants at the Western European level and have also helped suppliers to be at the level they need to be the suppliers, both for India and the rest of the world. So, if it has really been a benchmark in the transformation of that sector in India in the last ten years, and I believe it is now, it is. Suppliers and companies are prepared to compete globally. So that is the advantage that this sector has, because they are going to enter not only because of internal and Indian demand, but it can compete in the rest of the world, both the component manufacturers, the other component manufacturers, in addition, the suppliers who also no this.

 

Cristobal observatory Spain-India: [02:29:25] Thank you very much, Alan. I think we're going to leave it here because we've already taken up time that didn't belong to us. I want to thank you for your insights, for your ideas, for making sharing with us so important to understand the importance of supply chains today. And I leave with the same idea that we have heard 1/1 of this seminar and the second, and that is that we have to go to India. We must bet on India. India is an opportunity today and the Spanish companies that are there prove it. Thank you so much everyone. Cámara is kind enough to invite us.

 

Alan independent advisor: [02:30:04] Now, one thing I wanted to mention is Indian. She has done the infrastructure, logistics and everything very important. And logistics costs in India have dropped between 15 and 20%. This is very important. And the idea of ​​what the British ambassador has commented, the issue of links and incentives is very important. For example, in the automotive sector there are 3.500.000.000 for this incentive to improve production in this sector. And I believe that it is an incentive of 18% increase in sales that you have on certain products. It is a lot of money and it is very important money, which is why I believe that India will be a great alternative. Now, I'm not saying China is going to go down if it's not going to continue to be important in the supply chain. But India is, as we say, a very powerful alternative for companies. Not on the whole supply chain supply issue.

 

Cristobal observatory Spain-India: [02:31:24] Thank you very much Alan, for ending with such positive information.

 

Alan independent advisor: [02:31:27] I thought it was important for this.

 

Cristobal observatory Spain-India: [02:31:30] Absolutely. The chamber is kind enough to invite us to a wine and thank you all very much. Many thanks to Cámara. Thank you very much, Minister, for coming from Paris to join us. We continue at the Observatory creating and please stay tuned because we publish papers about it to continue this debate further. Thank you so much everyone.

 

Cristobal observatory Spain-India: [02:31:50] Thanks friends.