The Finnish Ambassador to India, Kimmo Lähdevirtain an interview with BW Business Worlddiscusses the steady growth of bilateral trade and investment, the prospects of the India-EU Free Trade Agreement and the expansion of cooperation in technology, start-ups, climate and the Arctic, while highlighting the untapped potential of the India-Finland economic partnership. Excerpts:
We spoke exactly a year ago. After a year, are there any updates on India-Finland bilateral relations? How do you assess the current state of the relationship?
Trade and investment have seen steady growth in both directions. The overall trend is clearly positive. However, the current level of engagement remains relatively low, meaning 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 considerable momentum. This is how I see the current situation.
When it comes to investments, whether it is Finnish companies investing in India or Indian companies investing in Finland, which key sectors do you consider to be the most important?
From Finland’s perspective, investment in India has been significant in the telecommunications sector, where companies like Nokia are major investors. Additionally, there are several Finnish companies in the manufacturing sector. Large companies 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 led by the European Commission. However, the Commission always consults the Member States and Finland, as a Member State, has made its contribution to the negotiating mandate which the Commission then pursues. We are also kept regularly informed of the progress of the negotiations. In this sense, I think we are quite close to an agreement. We should know more very soon, as the EU-India summit takes place next week. At that point, I’m pretty confident we’ll have a deal. The European Commission is also visiting India on the occasion of Republic Day, in the presence of Commission President Ursula von der Leyen and Council President António Costa. So we keep our fingers crossed.
If the FTA is finalized, which Finnish sectors do you think will benefit the most?
A large part of Finland’s exports to India are manufactured goods. Industrial products are therefore a key area where we hope for a reduction in import duties. This is one of the most important aspects for us. Beyond that, there are also several opportunities in the service sector and other areas that we consider important.
Will cooperation in the areas of technology and climate also intensify thanks to the FTA?
Yes, the agreement covers several areas in different ways. Technology, in particular, is a key element. Overall, the FTA is expected to improve trade facilitation and help create a more level playing field for businesses on both sides.
What is the political cooperation between India and Finland, especially in the start-up ecosystem?
We have been cooperating in this field for many years. On the Finnish side, Business Finland is the main implementing agency. Through initiatives such as the Talent Boost program, they are actively trying to attract Indian talent. In addition to experts working in various fields, we also encourage start-ups to come to Finland and experience the start-up ecosystem and innovation environment we have there.
A brief comment on geopolitics. There’s a lot going on in Europe. What is your point of view?
Finland strongly supports free trade. We would like to see trade barriers, including tariffs, reduced globally. Developments going in the opposite direction are not something we would like to see.
Are you concerned about security in the Arctic?
The Arctic is of great importance to Finland, as we are an Arctic nation. We take developments in the region very seriously and believe that important steps must be taken with our allies.
Do you see possibilities for future cooperation with India in the Arctic?
Yes. India has previously expressed interest in areas such as Arctic research. We already have cooperation in the climate and environment sectors. There are also some similarities between the Arctic and the Himalayas, particularly in terms of their impact on larger regions, river systems and environmental issues.
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