Other BriefingsIndia-Norway Trade and Investment Relations
As global markets evolve and industries undergo transformation, the bilateral relationship between Norway and India is poised to be dynamic. The partnership can leverage Norway’s expertise in sustainable energy alongside India’s rapidly expanding industrial and technological sectors. A shared commitment to increasing the use of renewable energy will address both global challenges and strengthen economic engagement between both nations.
The current bilateral relationship between Norway and India presents vast opportunities for growth and collaboration in the coming years, with sectors such as renewable energy, maritime technologies, and sustainable development taking center stage. Both nations have fostered cooperation across various industries. The recent trade agreement between Norway, the European Free Trade Association (EFTA), and India underscores this partnership, offering tariff-free access for nearly all Norwegian exports to India and marking a significant milestone in their economic ties.
TEPA: A new era in India-EFTA trade relations
The recently signed Trade and Economic Partnership Agreement (TEPA) between India and the EFTA—comprising Switzerland, Iceland, Norway, and Liechtenstein—marks a significant milestone. Signed on March 10, 2024, this agreement is expected to positively impact Norwegian businesses operating in India, opening doors to one of the world’s largest and fastest-growing markets.
Norway’s Minister of Trade and Industry, Jan Christian Vestre, highlighted that the Norwegian exports to India previously faced tariffs as high as 40 percent on some goods, but under the new agreement, nearly all Norwegian exports will now enjoy zero tariffs. This reduction in trade barriers is set to boost Norwegian exports and create jobs across Norway, particularly benefiting industries such as renewable energy, health technology, and maritime sectors.
According to the Norwegian Business Association India (NBAI), the agreement will enable Norway to play a critical role in India’s green and digital transitions, with significant potential for collaboration in renewable energy, green mobility, the circular economy, and seafood industries.
Economic impact of TEPA
The economic implications of TEPA are expected to be substantial. Despite a dip in trade activity between India and Norway during the financial year 2023-24, experts on both sides remain optimistic about the future trajectory of their trade relations. The agreement is anticipated to reinvigorate trade flows, fostering closer economic ties and providing Norwegian companies with expanded market access in India.
India-Nordic Summit
The upcoming India-Nordic Summit is scheduled to be held by the end of 2024. The summit involves Denmark, Sweden, Finland, and Iceland, and offers a platform for deepening ties between India and the Nordic region.
According to the media reports, discussions are expected to cover trade, investment, technology transfer, climate innovation, and sustainable development.
Norway’s economy transformed following its discovery of oil and gas in the North Sea, which subsequently positioned it among the world’s most advanced economies. Today, the combined economies of the Nordic region, including Norway, are ranked in the top 15 globally. According to May-Elin Stener, Norway’s Ambassador to India, Norway’s strong economic standing and extensive coastline align well with India’s growing maritime needs. One example of this collaboration is Norway’s use of electric ferries built by Kochi Shipyard, now operational in India.
According to Stener, Norwegian businesses are increasingly interested in India, and cooperation between the two countries is expected to grow significantly over the next decade.
Earlier in June 2024, the Norwegian envoy discussed country’s role in the recent trade agreement between India and the four-nation EFTA, which also includes Liechtenstein, Iceland, and Switzerland. Stener emphasized that the treaty would enhance cooperation, as India is the 5th largest and fastest-growing economy. She noted that the pact provides a secure framework for western businesses to operate in India.
As per Stener, Norway is committed to boosting investments in India, particularly as EFTA’s agreement with India includes a chapter on investment.
In a media interaction in Chennai, Tamil Nadu, the Ambassador highlighted Norway’s interest in three sectors, namely renewable energy, maritime, and the circular economy.
Additionally, Stener noted that Norway will host the Third India-Nordic Summit in Oslo later in 2024, continuing the framework established by the First and Second Summits in Stockholm (2018) and Copenhagen (2022), respectively.
India-Norway trade ties
There is growing interest in India from all Nordic nations, with significant potential for expanding trade and investment, particularly through the recently signed TEPA between India and the European Free Trade Association, of which Norway is a key member. Although trade activities experienced a notable decline in FY 2023-24, there has been a marked increase in the export of machinery and mechanical appliances from India to Norway, indicating strong prospects for future trade growth.
|
India-Norway Trade Relations Year-on-Year (Value in US$ Million) |
|||||
|
Trade |
2019-2020 |
2020-2021 |
2021-2022 |
2022-2023 |
2023-2024 |
|
India’s export to Norway |
421.61 |
322.48 |
379.72 |
569.19 |
403.08 |
|
Growth % |
|
-23.51 |
17.75 |
49.89 |
-29.18 |
|
India’s import from Norway |
630.79 |
673.66 |
2,092.36 |
938.06 |
793.85 |
|
Growth % |
|
6.8 |
210.6 |
-55.17 |
-15.37 |
|
Total |
1,052.40 |
996.14 |
2,472.08 |
1,507.25 |
1,196.93 |
|
Growth % |
|
-5.35 |
148.17 |
-39.03 |
-20.59 |
Source: Department of Commerce, Ministry of Commerce and Industry, GoI
|
India’s Exports to Norway (Value in US$ Million) |
|||
|
Commodity |
2022-2023 |
2023-2024 |
Growth % |
|
Organic chemicals |
83.78 |
82.85 |
-1.11 |
|
Products of the milling industry; malt; starches; inulin; wheat gluten |
72.07 |
63.66 |
-11.68 |
|
Other made-up textile articles; sets; worn clothing and worn textile articles; rags |
29.22 |
28.12 |
-3.75 |
|
Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof. |
17.73 |
27.31 |
53.99 |
|
Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts. |
21.16 |
20.95 |
-0.97 |
|
Wadding felt and nonwovens; spacial yarns; twine, cordage, ropes and cables and articles thereof. |
21.02 |
19.7 |
-6.26 |
|
Residues and waste from the food industries; prepared animal foder. |
10.52 |
18.27 |
73.61 |
|
Articles of iron or steel |
22.36 |
17.5 |
-21.74 |
|
Articles of apparel and clothing accessories, not knitted or crocheted. |
14.69 |
14.8 |
0.72 |
|
Natural or cultured pearls,precious or semiprecious stones,pre.metals,clad with pre.metal and artcls thereof;imit.jewlry;coin. |
12.63 |
11.71 |
-7.24 |
|
Rubber and articles thereof. |
8.53 |
9.97 |
16.93 |
|
Vehicles other than railway or tramway rolling stock, and parts and accessories thereof. |
10.47 |
9.31 |
-11.02 |
|
Optical, photographic cinematographic measuring, checking precision, medical or surgical inst. And apparatus parts and accessories thereof; |
62.85 |
6.56 |
-89.56 |
Source: Department of Commerce, Ministry of Commerce and Industry, GoI
|
India’s Imports from Norway (Value in US$ Million) |
|||
|
Commodity |
2022-2023 |
2023-2024 |
Growth % |
|
Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes. |
414.95 |
332.02 |
-19.99 |
|
Nickel and articles thereof. |
133.57 |
121.6 |
-8.96 |
|
Iron and steel |
56.06 |
46.48 |
-17.09 |
|
Fertilisers. |
57.81 |
34.17 |
-40.9 |
|
Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof. |
29.89 |
34.15 |
14.24 |
|
Aluminium and articles thereof. |
40.12 |
26.02 |
-35.15 |
|
Ores, slag and ash. |
|
21.62 |
|
|
Ships, boats and floating structures. |
26.72 |
17.71 |
-33.71 |
|
Optical, photographic cinematographic measuring, checking precision, medical or surgical inst. And apparatus parts and accessories thereof; |
13.48 |
17.56 |
30.29 |
|
Miscellaneous chemical products. |
16.94 |
17.48 |
3.19 |
|
Organic chemicals |
14.77 |
16.21 |
9.73 |
|
Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts. |
15.56 |
16.08 |
3.31 |
|
Plastic and articles thereof. |
27.64 |
15.99 |
-42.15 |
Source: Department of Commerce, Ministry of Commerce and Industry, GoI
India is among Norway’s top 25 trade partners, ranking 23rd, and exporting goods such as textiles, petroleum, and machinery.
On the other hand, Norway’s imports of metals and chemicals from India highlight the complementary nature of their trading relationship.
India-Norway Double Taxation Avoidance Agreement (DTAA)
The DTAA plays a pivotal role in enhancing bilateral trade and investment by preventing the double taxation of income that is earned in one country and transferred to the other. The agreement ensures that businesses and individuals operating across both countries are not subject to tax on the same income in both jurisdictions, making cross-border trade and investment more efficient and attractive.
|
Recipient Country |
Withholding Tax Rates (%) from Certain Types of Income |
|||
|
Norway |
Dividend |
Interest |
Royalty |
Fee for technical services |
|
10 |
10 |
10 |
10 |
|
Source: India Briefing
The India-Norway DTAA has contributed significantly to strengthening economic relations between the two countries. In 2023, both India and Norway signaled their intent to modernize the DTAA to reflect changes in global tax regulations, such as those under the OECD’s Base Erosion and Profit Shifting (BEPS) framework.
Expanding business opportunities for Norway in India
Numerous business opportunities exist for Norwegian companies looking to expand in India. Over 90 Norwegian companies are already operating in the country, many of which are satisfied with the business environment and are planning to grow further.
India’s vast and growing economy provides Norwegian companies with opportunities in several key areas, including:
- Clean technology and environmental solutions: As India focuses on sustainability, there is rising demand for clean technology. Norwegian companies offering solutions in environmental technologies, waste management, and sustainable urban development can find promising opportunities.
- IT and digital services: India is a global leader in IT services, and Norwegian companies can leverage India’s skilled workforce for software development, IT consulting, and cybersecurity services.
- Renewable energy: With ambitious targets in solar and wind energy, India presents a lucrative market for Norwegian firms specializing in renewable energy technologies like solar panels and wind turbines.
- Maritime and offshore industry: Norway’s expertise in maritime and offshore industries aligns well with India’s growing maritime sector, offering opportunities for collaboration in shipbuilding and marine equipment.
- Healthcare and MedTech: As India’s healthcare industry grows, Norwegian companies specializing in healthcare technology and telemedicine can capitalize on this expanding market.
- Agriculture and food processing: With a focus on sustainable farming and food safety, Norwegian businesses can collaborate in areas like precision farming and food processing.
- Education and skill development: Norway can partner with Indian institutions to address skill gaps and enhance workforce development in India’s growing young population.
- Smart cities and infrastructure: Norwegian firms can contribute to India’s urban transformation initiatives by offering solutions in smart city infrastructure, transportation, and sustainable construction.
Norway has shown a keen interest in tapping into India’s skilled workforce. Indian professionals, particularly in fields such as IT, engineering, and healthcare, bring valuable expertise that can benefit Norwegian industries. By establishing talent exchange programs and fostering strategic collaborations, Norway aims to leverage Indian talent to drive innovation and enhance its global competitiveness.
Indian professionals are recognized for their technical proficiency and work ethic, making them highly sought after in Norway’s job market. Their contributions are enriching Norway’s multicultural work environment and boosting the country’s productivity and competitiveness in the global economy.
Key takeaways
- Dynamic partnership: India and Norway are combining their strengths in sustainable energy and technology to address global challenges and foster economic growth.
- TEPA agreement: The 2024 Trade and Economic Partnership Agreement (TEPA) eliminates tariffs on most Norwegian exports to India, boosting trade and economic ties.
- Economic impact: TEPA is expected to revitalize India-Norway trade, especially in renewable energy, health tech, and maritime sectors, creating jobs and opportunities.
- Trade trends: Despite a recent dip, key sectors like machinery and appliances from India to Norway are growing, with continued trade in minerals and fuels from Norway.
- India-Nordic Summit: The 2024 India-Nordic Summit will focus on deepening ties in trade, investment, and sustainability between India and Nordic countries.
- Business opportunities: Norway sees growth potential in India’s markets for clean technology, IT, healthcare, and maritime industries.
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