Hungary´s SMEs encouraged to target non-EU countries

The presenters at the forum were foreign trade officers working at the Hungarian embassies in New Delhi, Istambul and Tokyo, who provided a firsthand insight into their experiences and the characteristic features of the countries involved.

Judit Galambos, Director of the Domestic Regional Network Department, said in her opening speech that HITA is representing Hungary with 47 diplomats at 61 cities in 47 countries. She added that the aim of opening towards the East is to deliver our products to markets outside the EU, where we had been successfully present before, and as a result, strengthen the presence of domestic SMEs in foreign markets.

Currently, Hungary's export volume to countries outside the EU accounts for 20 percent of the country's entire exports, and the aim is to increase this value to 30 percent. Galambos said in her speech that the organisation can help domestic SMEs in several ways, such as providing tailored counselling, up-to-date information about the target country and participation at B2B meetings.

Judit Galambos, Director of the Domestic Regional Network Department, at HITA's event

Foreign trade officer Zsolt Pákozdy works in New Delhi, India. First off all, he asked the audience to excuse his appearance – he wasn't wearing a tie – but it was all part of his presentation of the differences between doing business in Hungary and India.

"There are different rules in India regarding how to dress for a business meeting. We found that those who pay too much attention to how their appearance – wear a suit and a tie – are mostly after our money," Pákozdy said.

In his presentation he called the audience's attention to the extreme size of India and its possible consequences. There are currently 1.2 billion people living in India and the country's population doesn't seem to stop growing. According to projections, by 2030 the latest, the country will become the most populous country in the world.

"India is not a country," he says. In many respects it's just like the European Union, he adds, saying that the different regions in India have their own language, culture and laws. At the same time, it makes things a bit more difficult that customs duties still apply between certain states. Pákozdy noted that although such as in the case of socialist states there is also a five-year plan in India, exceeding targets is not appreciated, what's more, it is often penalized. In India only 5 percent of the population is part of the middle-class, but experts say that it will increase to 25 percent by 2025. This means that 25 percent will soon be able to afford our products, said the expert.

Pákozdy emphasised that those who want to introduce their products in India have to make sure that they are thinking on a regional – and not on a national – level, which is already big-enough task. He said that besides medical instruments, pharmaceuticals and automotive parts, non-ferrous metals and rubber products, India also welcomes foreign know-how.

"We have to take into consideration that India's already huge population grows by 20 million every year. With numbers as huge as this we are talking about a consumer base of 20-25 million people," Pákozdy said. He added that in light of that the country's demand on quantity is much more significant than for example in Hungary.

The insight into the Indian business environment was followed by a presentation on Japan. Bálint Kósa is a foreign trade officer in Tokyo, working on consolidating business relations between Hungary and Japan. The two parties first made business in 1869, when 100 horses were sold to Japan and a business relationship – with ups and downs – has existed between the two countries ever since then.

"Japan primarily makes business with the U.S and China, from Hungary they mainly buy car parts and components for railway vehicles," said Kósa, adding that Japan has probably the highest quality requirements in the world. Those who want to enter the Japanese market, have to take into account that 100 percent is required all the time.

József Pliskó, assistant in foreign trade, works in Istambul Turkey, where mostly vehicles and machinery are delivered from Hungary.

"The Turkish automotive industry poses many opportunities for Hungarian automotive suppliers, said Pliskó, adding that Turkish projects usually require local production with a local workforce. The Turkish Republic will celebrate its 100th anniversary in 2023 and they have set to achieve several targets by then. One of them is to decrease the country's import-dependency. This is probably the main reason for the tendency in the country's tender schemes to favour local production. And this is why they welcome foreign R&D know-how as well, said Pliskó.