Home / News / World /  Narendra Modi makes a business trip to Nordic free-trade bastion

Helsinki/Copenhagen: Narendra Modi can expect an earful on the benefits of free trade when he visits Stockholm for a summit with Nordic peers already rattled by the sound of Donald Trump’s protectionist war-drums.

The first ever joint meeting between the prime ministers of India, Denmark, Finland, Iceland, Norway and Sweden comes at a critical juncture for the global economy, with the European Union still trying to figure out if it will obtain a permanent exemption from US tariffs on foreign steel and aluminum.

Modi for his part, has been sending conflicting messages about his free trade credentials: Having declared at the World Economic Forum (WEF) in January that India was open for business, the premier made a U-turn less than a month later by raising import duties to their highest level in three decades.

The last thing that the export-oriented Nordics need from the world’s biggest economies is more protectionism.

“We want to move in the opposite direction to the US and create more positive examples of what free trade can do," Danish foreign minister Anders Samuelsen said in an interview ahead of Tuesday’s summit.

Wooing India

Given India’s preference for dealing with individual countries rather than the EU as a whole, the summit is a golden opportunity for the Nordics—a region of 27 million people with an economy roughly the size of Canada’s—to do business with the world’s biggest democracy. A free trade agreement with the EU has been years in the making, with slim results.

“There’s a realization among Nordic governments of the potential importance that India can play in the coming years," said Henrik Aspengren, a researcher at the Swedish Institute of International Affairs. “Compared to China, it has the potential to grow."

India’s $2.3 trillion economy has obvious attractions for Nordic businesses. Sweden, for instance, is sensing an opportunity to showcase its Saab AB Gripen fighter jets ahead of a July deadline for bids in India’s procurement process of 110 locally-manufactured aircraft.

Saab, which has been supplying India’s armed forces for decades, argues that the Gripen is ideally suited for the country’s purposes and has proposed setting up an aerospace ecosystem to manufacture the jets under Modi’s Make-in-India plan.

However, India is a tough negotiating partner. Leaders in New Delhi crave foreign investment that can create much-needed jobs. But Modi’s government has been resistant to signing trade deals that could flood India with foreign goods. At the same time, defence firms bidding on contracts have to contend with a slow and dysfunctional military procurement process.

Swedish premier Stefan Lofven isn’t discouraged. That deal “would be fantastic, of course," he told Bloomberg, adding that he expects to discuss it with Modi. “If Sweden can facilitate that such a deal can happen, we will. It would be strange if it didn’t also come up here."

Denmark, for its part, is keen to sell its wind mills and food-processing machinery, according to Kunal Singla, who heads the Danish industry lobby’s office in India.

“Countries like Sweden or Denmark are looking to boost trade with India," Aspengren said by phone.“They’re hoping that India’s interests in this region will grow."

The one-day summit sees Sweden’s Lofven host Modi during the morning, while the other heads of government will each be granted 30-minute bilaterals in the afternoon. A working dinner will then bring them all together in the evening. Bloomberg

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout