Trade Talks with Finland to Enhance India’s Renewable Energies Sector

October 14, 2014 Posted by India Briefing Reading Time: 4 minutes

India and Finland are set to sign a number of agreements this week in order to boost cooperation in several key industries. According to official sources, deals are expected to be struck in the manufacturing, science and technology, education and energy sectors.

Finland’s status as a knowledge-based, clean technology economy is understood to be the main motivator behind the slew of deals. Having accounted for 7.1 percent of the world’s 36 billion tonnes of carbon emitted in 2013, India is now actively seeking new ways to reduce its ever-increasing carbon footprint, and improving bilateral relations with the Scandinavian country has been identified as an effective means to do so.

First Indian Head of State to Visit the Arctic Circle

The deals arrive just after President Pranab Mukherjee’s recent five-day visit to Finland and Norway; the first of its kind by an Indian head of state. The purpose of Mukherjee’s visit was multifarious and included working on the two countries’ overall government-to-government and business-to-business relations, but improving India’s image as an environmentally friendly economy has quickly emerged as a key area of interest.

Earlier this year, energy minister Piyush Goyal announced that India will become a “renewables superpower” and bring in US$100 billion in green energy investment over the next five years. Attracting investment from some of Finland’s clean technology industries – a term used to describe processes that predominantly use renewable materials – would provide a huge boost to this goal.

Speaking on the talks between the two countries, an Indian official said that: “India views Finland as an important member of the European Union and a repository of modern technology and Finland sees in India a large market for its products and a favorable investment destination for its high technology industries.”

He added that: “In Finland we also have a reliable trade partner, heavily industrialized in a very green way. We have USD 1.5 billion of trade and there are over 100 Finnish companies in India which are working here including in R&D.”

Thawing of Bilateral Relations

The expected agreements between the two countries provides an interesting contrast to relations between India and one of Finland’s biggest companies, Nokia. The communications technology giant recently shut down one of its largest facilities in India, partly over its own troubles in the mobile handset market, but also largely due to a tax dispute with the Indian government that at one point had the Finnish finance ministry involved.

The example of Nokia might have deterred other Finnish companies from jumping on the ‘Make in India’ bandwagon; a new campaign thought up by Prime Minister Narendra Modi to attract foreign investment in India. The successful talks between India and Finland, however, show that healthy bilateral relations are not only very much alive, but look set to grow further.

There are currently around 130 Finnish companies operating in India, including names like Metso and Ahlstrom with manufacturing facilities. On the back of this increased trade cooperation, they might soon be joined by an abundance of new, environmentally friendly manufacturers.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email india@dezshira.com or visit www.dezshira.com.

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