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NT Bureau
Chennai, Jan 8:

        Croatia has opened up its economy to attract foreign investments and joint ventures in an eagerness to catch up with Western markets in EU after a prolong civil war and strife.

        'There is a huge potential for Indo-Croatian joint ventures and foreign direct investments in Croatia's tourism sector, which is a $7 billion industry that attracts over 9.4 million tourists and over 48 million visitors for overnight stays,' said Boris Suran, first secretary at the Embassy of Republic of Croatia.

        He was delivering a special address at the session on Business Opportunities in Croatia organised by Confederation of Indian Industry (CII) here recently. Suran said his country has eight national parks, many cultural and world heritage sites protected by UNESCO. Croatia was similar to Kerala in terms of size and a common focus on tourism.

        Croatia is reachable in less than two hours by flight time from London, Frankfurt or Madrid. It has a well-entrenched port in the Adriatic sea and well-connected through highways to Budapest and Vienna.

        He said that the primary aim of the country was to promote greenfield investments through FDIs. With a total GDP of $34 billion in 2004, Croatia had identified ship building, processing industry, tourism, agriculture, infrastructure projects like road and railway, housing construction, energy sector and telecom as focus sectors for joint ventures and FDIs. Asking Indian firms to set up operations through joint ventures in Croatia, Boris Suran informed his country had set up an investment promotion agency which had developed 15 free economic zones so far.

        The free zones could be used for all business activities and the units of free zones did not attract custom duties and value-added tax. Units involved in developing infrastructure are exempted from the 10 per cent profit tax for the first five years.

        Republic of Croatia had liberalised trade with 37 European countries. More than 80 per cent of foreign trade was based on free trade principles, he said. Croatia, hence, was a focal point for the business in the EU region and was the gateway to Central and Eastern Europe. Free Trade Agreements (FTAs) were entered into most of the EU members and government had set up an investor friendly environ-ment and given incentives for FDIs. The country also has a highly educated and well-trained labour force.

        Of the total exports, ships, boats, mineral fuels and oils, electrical machines, boilers, mechanical appliances and wood articles formed a large percentage. It primarily imported machinery, automobiles and auto-components and plastic products. One of the finest olive oil was produced by Croatia, which was set to join the EU club in 2008.

        In his address, R Ramamurthy, chairman and managing director, Digicon India, said Croatia was one big untapped market for Indian companies, especially in the small and medium sector. He urged the Indian firms to consider looking at Croatia as a hub to access the rest of East European market. Following the liberalisation of visa policy, Indian businessmen have shown interest in visiting this country and exploring possibilities for investment.

        India and Croatia shared similar aims and ideas on liberalisation and have progressed towards an market-oriented economy. Both the countries have carried out important economic changes in the recent years, he said and added there was a need to broad base and expand the bilateral trade, economic and technolo-gical cooperation between the two sides.