Diplomatically Speaking: Building a Modern, Mature Trading Relationship on Strong Cultural Links

Interview

Indian Ambassador Kumar Tuhin

Photo by Ms Ankita Verma

Modern India-Hungary relations are based on a mutual respect for culture and traditions as well reflecting the maturity of the countries’ economies, says Kumar Tuhin, India’s Ambassador in Budapest since November 2018.

Post-World War II ties were formally established between the two nations 72 years ago, in November 1948, with the first trade agreement following six years later in 1954, says Tuhin, a very experienced diplomat who came to Hungary from being High Commissioner to Namibia, but who has also been posted to Hong Kong, Beijing, Geneva, Hanoi and San Francisco during his career.

“Those are the formal diplomatic links, but our ties go back much further,” says Tuhin. “Sándor Kőrösi Csoma visited India close to 200 years ago, looking for the ancestors of the Hungarians.” Csoma’s work, compiled over two decades, resulted in the first Tibetan–English dictionary and grammar book. The Indologist, who died in 1842 in Darjeeling, in the Western Bengal region of India, has been described as the founding father of Tibetan and Buddhist studies.

Nor is Csoma the only cultural link. Amrita Sher-Gil, who has been called one of the greatest avant-garde women artists of the early 20th century and a pioneer of modern Indian art, was born on January 30, 1930 in Budapest. Indeed, her parents were an exotic mix of a Punjabi aristocrat father and a Hungarian-Jewish opera singer who had first met in Lahore in 1912.

Bringing things more up-to-date, trade between the two countries in 2020 came to USD 761 million, a slight increase of 2.3% compared to 2019. Exports from India to Hungary came to USD 478 mln (actually a 2.4% decline from the previous year), but there was better news for Hungarian exports to India, up by 11% at USD 283 mln.

“Last year was very tough for both India and Hungary because of COVID, but still in many areas trade has been increasing, and that is a good sign,” the ambassador says. “If you look at trade in 1954 and now, its composition has completely changed,” Tuhin says. Where once it was traditional raw materials such as textiles, now it is medicines, electrical parts, and automotive components. The areas of trade represent more mature economies, the ambassador says.

“Both Hungary and India’s economies have grown and developed significantly. In terms of GDP, India is the fifth largest economy in the world. If you look at IT and scientific activities, Hungary is very advanced.”

Greenfield Investor

In terms of Indian FDI into Hungary, the ambassador put the total at around USD 3 billion. “Indeed, India was the largest greenfield investor in Hungary in 2014, and the third largest in 2015.”

Many of those investors will be known to our readers, whether it is Apollo Tyres, whose first overseas greenfield factory was opened on a 72-hectare site in Gyöngyöshalász (80 km northeast of Budapest) in April 2017, or Tata Consultancy Services, whose latest office opened in Budapest in January 2020, and whose leader Prabal Datta is one of three people shortlisted for the BBJ Expat CEO of the Year Award 2021.

But there are many other Indian firms here. Speaking at the Tata opening last year, Minister of Foreign Affairs and Trade Péter Szijjártó said there were about 40 large Indian companies, employing more than 10,000 Hungarians. Examples include the Motherson-Group (which has several SMR and SMP factories in Hungary including in Kecskemét, Mosonmagyaróvár and Túrkeve), Sona Group (in Polgár, in the east of the country), and Sun Pharma (in Tiszavasvári, not far from Nyíregyháza)).

By contrast, Hungary’s biggest investment in India is a USD 20 mln joint venture dating back to 2004 involving drug maker Richter Gedeon called Richter-Themis Medicare. Tuhin says he would like to see more companies follow this path.

“Given the growth of the Indian economy, it would be good for the Hungarian side, not just to tap into our market, but also to set up joint ventures to enter third party countries. Water is one area where Hungary has a lot of knowledge.” He mentions a pilot project conducted in India in 2019 using Hungarian expertise to limit water evaporation as just one example of this.

Warm Welcome

The ambassador’s experience suggests Indian businessmen have been very pleased with the welcome they have received from their Hungarian hosts. “My feedback with Indian investors is that they have a very good relationship with the Hungarian Investment Promotion Agency; wherever there have been issues raised, they have been sorted out.”

On occasion, the embassy has also stepped in to help. Without being specific, Tuhin cites one example of a company importing stainless steel tubes that had anti-dumping tariffs imposed on the suspicion the raw material was sourced from elsewhere. The ambassador says the embassy was able to help the firm provide the documentation needed to prove the origin of the tubes, and the tariffs were successfully removed. Such interventions are only possible given strong political relations, which the ambassador describes as “close and friendly. Over the years they have certainly developed and consolidated.”

The period from 2019-2020 was particularly noteworthy for that, the ambassador explains, with three ministerial visits within a period of six months: External Affairs Minister Subrahmanyam Jaishankar came to Hungary in August 2019; India’s Water Resources Minister Gajendra Singh Shekhawat attended the Budapest Water Summit in October 2019; and Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó visited India in January 2020.

The economic relationship had naturally cooled somewhat a little after the 1990s as Hungary re-aligned with the European Union and NATO. “But that basic friendship and strong goodwill was always there,” the ambassador says. The evidence of strong people-to-people connections can be seen in the immense popularity of yoga, and the strong interest in Indian music and dance.

He also cites the ancient Indian medicine of Ayurveda as another point of contact, although under current Hungarian laws, Ayurveda medicinal products have been relabeled as food supplements. “We are working on getting these medicines their due recognition,” says the ambassador, who admits it is a subject close to his heart. The hope is that post-doctoral studies may be possible, so Hungarian doctors can also be trained in and prescribe Ayurveda products.

“It is good to look at health in a holistic way, and Ayurveda should be seen as complimentary to modern medicine,” the ambassador says.

This article was first published in the Budapest Business Journal print issue of  March 26, 2021.

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