India-Denmark Strategic Partnership Grows, from Green Energy to Pharmaceuticals

India and Denmark share a long-standing, friendly relationship, initiated by India’s first Prime Minister Jawaharlal Nehru’s visit to Denmark in 1957. Over the years, the relationship has strengthened through numerous high-level visits, covering political, economic, academic, and research fields.

With an open economy, the Danish country is heavily reliant on foreign trade and investment. Denmark has invested in sectors such as port modernization, wind turbines, and engineering in India. Indian companies, primarily from the information technology (IT) sector, have a smaller presence in Denmark.

Bilateral trade relations

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In July 2024, India maintained a positive trade balance with Denmark, recording exports valued at US$71 million against imports of US$56.6 million, resulting in a surplus of US$14.4 million. Compared to July 2023, India’s exports to Denmark increased by 5.69 percent, rising from US$67.2 million to US$71 million, while imports from Denmark saw a significant decrease of 65.8 percent, dropping from US$166 million to US$56.6 million.

For FY2023-24, bilateral trade between India and Denmark reached US$1.773 billion, up from US$1.681 billion in FY2022-23. Denmark’s exports to India amounted to US$917 million in FY2023-24, reflecting an annual growth rate of 19.11 percent compared to the previous year.

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

India’s top exports include textiles, vehicles, and metal goods, while Denmark’s top exports are pharmaceuticals, machinery, and chemicals.

Institutional mechanisms

India and Denmark engage on various bilateral forums, such as through the Joint Commission Meeting and Foreign Office Consultations. Eleven Joint Working Groups across various sectors (e.g., renewable energy, agriculture, health) have been established, focusing on collaboration in these areas. Recent agreements include a Migration and Mobility Partnership Agreement (February 2024), promoting employment opportunities for Indians in Denmark’s health sector.

India-Denmark Double Tax Avoidance Agreement (DTAA)

The India-Denmark Double Tax Avoidance Agreement (DTAA) is a bilateral treaty designed to prevent the double taxation of income earned in both countries by individuals or businesses. Signed in 1989, the agreement ensures that taxpayers are not taxed twice on the same income in India and Denmark, promoting cross-border investments and trade.

Source: India Briefing

Cross-border investment

Danish companies have invested approximately US$1.81 billion in India across various sectors, while 25 Indian firms, primarily in IT and renewable energy, operate in Denmark. Denmark has contributed to India’s infrastructure development, supporting initiatives such as ‘Make in India,’ with over 140 Danish companies active in the country. In contrast, Indian companies have established a smaller but expanding presence in Denmark, mainly within the IT sector.

Between 2000 and 2021, Denmark invested US$1.81 billion in India, with around 200 Danish companies operating in sectors such as shipping, renewable energy, environment, agriculture, and smart urban development. Major Danish firms like AP Moller Maersk, Vestas, and Danfoss have set up manufacturing units under the ‘Make in India’ initiative.

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Indian investments in Denmark amount to about US$560 million, with around 25 Indian companies active in IT, renewable energy, and engineering. Notable Indian firms include Infosys, Tata Consultancy Services, and HCL. In July 2022, Infosys acquired Danish life sciences consulting company BASE Life Sciences for €110 million, further expanding its presence in Denmark.

In 2022, Prime Minister Narendra Modi invited Danish companies and pension funds to invest in India’s infrastructure sector, emphasizing opportunities within the country’s ongoing development projects. Modi highlighted India’s growing infrastructure needs and the country’s focus on sustainability, renewable energy, and green technology. He encouraged Danish investors to collaborate with Indian firms in these areas, reflecting the strong ties between India and Denmark under the Green Strategic Partnership. This partnership aligns with India’s development goals and aims to promote sustainable economic growth through foreign investments.

Denmark-based Rockwool’s expansion in India

On August 22, 2024, Denmark-based Rockwool, a company specializing in insulation production, announced the establishment of its largest factory in India. The new factory, to be built in Tamil Nadu with an investment of INR 5.5 billion (US$ 65 million), will produce recyclable stone wool insulation materials. This will be Rockwool’s second facility in India, after Gujarat, which is expected to enhance the company’s presence in the Indian market.

Infosys-TDC net collaboration

In the tech sector, Indian IT giant Infosys has partnered with Denmark’s TDC Net, a digital infrastructure provider, to modernize its IT systems. The collaboration, announced on July 30^th, 2024, aims to enhance customer experience, simplify IT platforms through AI-driven automation, and reduce operational service costs. Campbell Fraser, CTIO of TDC Net, expressed confidence in Infosys’ ability to drive a successful transformation, while Infosys executive Upendra Kohli emphasized the focus on customer satisfaction and operational efficiency.

Novo Nordisk: Investments in pharma and AI integration in India

India and Denmark’s relationship in the pharmaceutical and healthcare sectors is set to deepen, with Danish pharmaceutical giant Novo Nordisk and its investment arm, Novo Holdings, leading the way. In March 2024, it was reported that the company is planning to expand its operations, increase investments, and partnerships with Indian AI start-ups, a move signaling a significant strengthening of ties between the two countries in these critical areas.

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It is also worth noting that the Danish pharma giant has also invested in several Indian healthcare companies like Manipal Hospitals and AI-based health tech firm Qure.ai aims to invest US$300-500 million annually in Asia over the next five years.

Novo Nordisk, known globally for its diabetes treatments and the Wegovy weight-loss drug, is reportedly ramping up its presence in India. The company’s Bengaluru center, which has been operational for 17 years, is at the heart of this expansion. The center manages vast amounts of data related to the safety and efficacy of Novo’s medicines, playing a crucial role in clinical trials and side effect monitoring.

It has also been reported that Novo Nordisk plans to boost its total workforce in India by 16 percent, reaching 5,000 employees by 2025.

Meanwhile, the company is also planning to tap into India’s start-up ecosystem by partnering with 10 local AI companies. These partnerships aim to streamline tasks such as document summarization, extracting insights, and enhancing quality checks for drug regulatory submissions.

India as a global hub for pharmaceutical R&D

India now handles half of Novo Nordisk’s global drug safety assessments, a crucial function that tracks reports of side effects and shares them with global health regulators. The Bengaluru center also contributes to producing safety reports, risk management plans, and other key publications throughout the drug development process.

John Dawber, Novo’s managing director for global business services, believes that India is becoming “an almost perfect mirror image” of the company’s Denmark headquarters in handling critical data related to research and development. This increased responsibility for the Indian center marks India’s growth in global pharmaceutical R&D segment.

Strengthening maritime cooperation

At present, India and Denmark are working closely to advance sustainable maritime practices under the India-Denmark Green Strategic Partnership. The collaboration covers a wide range of areas, including green shipping, port state control, maritime education, and research and development. Denmark, a leader in sustainable maritime technologies, is helping India achieve its goals under the Sagarmala initiative and Maritime India Vision 2030.

The Memorandum of Understanding (MoU) signed between India and Denmark in 2019, and revised in 2022, has been expanded to include the establishment of a Centre of Excellence (CoE) for green maritime technologies in India. Denmark’s expertise in port digitalization, automation, and cybersecurity has been instrumental in helping India pursue its goal of becoming a global leader in smart ports.

Green strategic partnership

India and Denmark have a longstanding relationship that has deepened significantly with the signing of the Green Strategic Partnership. In 2020, Danish Prime Minister Mette Frederiksen and Indian Prime Minister Narendra Modi co-chaired a Virtual Summit, marking a milestone in Indo-Danish relations. The leaders agreed to elevate ties to a Green Strategic Partnership, focusing on climate change, green transition, and sustainable development. This partnership also aligns with India’s other major initiatives, such as green hydrogen mission, and smart cities, positioning Denmark as a key strategic partner.

This partnership aims to advance political cooperation, promote economic growth, create jobs, and address global challenges, especially focusing on sustainability and reducing carbon emissions. Key sectors of cooperation include renewable energy, urban development, water, and intellectual property rights.

Denmark-India partnership for a green future

Denmark’s Minister for Industry, Business, and Financial Affairs, Morten Bødskov, on his recent visit to India in 2024, emphasized the growing partnership between the two countries in driving a “green future.” Denmark aims to contribute clean technology, while India brings scale, creating opportunities for enhanced collaboration. Speaking at a renewable energy event, Bødskov highlighted increasing cooperation between Danish and Indian companies, particularly in green technology and climate change mitigation.

Energy cooperation: India-Denmark Energy Partnership (INDEP)

A key element of Denmark’s collaboration with India is the India-Denmark Energy Partnership (INDEP), a five-year program (2020-2024) focused on energy cooperation. The partnership covers areas such as offshore wind power, regulatory frameworks, and investment in green energy. INDEP, in collaboration with the Indian Ministry of New and Renewable Energy and the Ministry of Power, integrates global standards into India’s energy landscape. As of 2022, a Centre of Excellence for Offshore Wind and Renewable Energy has been established to facilitate knowledge-sharing between the two countries.

Business outlook

For companies considering the India-Denmark business corridor, the strong trade and investment relationship between the two countries presents promising opportunities. The collaboration between India and Denmark is evolving rapidly, with key sectors such as pharmaceuticals, healthcare, technology, and green energy at the forefront. Danish companies, especially Novo Nordisk, are significantly expanding their operations in India, focusing on AI integration and R&D. The Green Strategic Partnership facilitates an investment-friendly environment in India, with a focus on sustainable growth ideas and innovation. Denmark’s investments in India’s infrastructure and the growing presence of Indian IT firms in Denmark signify mutual interest in each other’s markets.

Companies can explore partnerships, especially in sustainable development, renewable energy, and digital innovation, to take full advantage of this dynamic bilateral relationship. The presence of support organizations like the Indo-Danish Business Association (IDBA) further strengthens business cooperation, making this an opportune moment for enterprises looking to expand their international footprint in these two markets.

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