Finland’s Ambassador to India, Kimmo Lähdevirta, in an interview with BW Businessworld, discusses the steady growth in bilateral trade and investment, the prospects of the India–EU free trade agreement, and expanding cooperation in technology, start-ups, climate, and the Arctic, while underlining the untapped potential in the India–Finland economic partnership. Excerpts:
We spoke exactly one year ago. After one year, are there any updates on India–Finland bilateral relations? How do you assess the current state of the relationship?
There has been steady growth in trade and investments in both directions. The overall trend is clearly positive. However, the current level of engagement is still relatively low, which means there is significant room for growth on both sides. We hope that initiatives such as the EU–India free trade agreement, which is now at a fairly advanced stage, will provide a considerable boost. That is how I see the situation at present.
When it comes to investments, whether Finnish companies investing in India or Indian companies investing in Finland, which key sectors do you see as most important?
From Finland’s perspective, investments in India have been strong in the telecom sector, where companies like Nokia are major investors. In addition, there are several Finnish companies in manufacturing. Large firms such as KONE and Wärtsilä, among others, have made significant investments in India. At the same time, we also see Indian companies investing in Finland, particularly in services, engineering, and related fields. There is also cooperation and investment in areas such as tourism and manufacturing.
There is a proposed free trade agreement between India and Europe. What is Finland’s role or contribution to this FTA?
Free trade negotiations are formally conducted by the European Commission. However, the Commission always consults member states, and Finland, as a member state, has provided its input for the negotiating mandate that the Commission then carries forward. We are also kept regularly informed about the progress of the negotiations. In that sense, I feel we are quite close to an agreement. We should know more very soon, as the EU–India summit is taking place next week. By that time, I am fairly confident that we will have a deal. The European Commission is also visiting India around Republic Day, with Commission President Ursula von der Leyen and Council President António Costa expected to be present. So, fingers crossed.
If the FTA is finalised, which Finnish sectors do you think will benefit the most?
A large share of Finnish exports to India consists of manufactured goods. Industrial products are therefore a key area where we hope import duties will come down. This is one of the most important aspects for us. Beyond that, there are also several opportunities in the services sector and other areas that we consider significant.
Will cooperation on technology and climate also increase as a result of the FTA?
Yes, the agreement covers several areas in different ways. Technology, in particular, is a key element. Overall, the FTA should improve trade facilitation and help create a more level playing field for businesses on both sides.
What is the policy-level cooperation between India and Finland, especially in the start-up ecosystem?
We have had cooperation in this area for many years. On the Finnish side, Business Finland is the main implementing agency. Through initiatives such as the Talent Boost programme, they are actively trying to attract talent from India. In addition to experts working in various fields, we are also encouraging start-ups to come to Finland and experience the start-up ecosystem and innovation environment that we have there.
A brief comment on geopolitics. A lot is happening in Europe. What is your perspective?
Finland strongly supports free trade. We would like to see trade barriers, including tariffs, being lowered globally. Developments that move in the opposite direction are not something we would like to see.
Are you concerned about Arctic security?
The Arctic is of key importance to Finland, as we are an Arctic nation. We take developments in the region very seriously and believe there are important measures that need to be undertaken together with our allies.
Do you see scope for future cooperation with India in the Arctic?
Yes. India has already expressed interest in areas such as Arctic research. We already have cooperation in the climate and environmental sectors. There are also certain similarities between the Arctic and the Himalayas, particularly in terms of their impact on wider regions, water systems, and environmental issues. |
