“There are many Swedish companies that are active in China. We see an appetite from Swedish companies to broaden their presence in Asia. India is one of the preferred choices. We see companies coming in, setting up manufacturing and expanding their business here to put their eggs in different baskets,” Thesleff told Mint.

“Every year, Sweden makes a business climate survey in around 50 countries around the world. We go out to Swedish companies and ask them how they see the business climates, challenges and benefits in establishing themselves in a certain country. In the last survey that was published in 2023, India was the market that had the strongest positive sentiment,” he added.

According to the 2023 Global Business Climate Survey conducted by Business Sweden, 86% of the respondents perceived the business climate in India to be either good or very good, an increase of almost 20 percentage points over 2022.

According to Invest India, the government’s trade promotion agency, India saw FDI inflows of $2.38 billion from Sweden between 2000 and 2023. Sectors like automobiles, industrial machinery, electrical equipment and metallurgy attract the most investment. Defence ties have also grown closer with Swedish firm SAAB receiving clearance to establish a 100% FDI manufacturing unit to produce Carl Gustaf M4 rockets. The investment will total ₹5 billion, according to Invest India.

While economic cooperation in innovation, clean energy and defence are new areas of interest, bilateral trade has typically underperformed. In 2022, bilateral trade reached $5.5 billion after declining during the pandemic. However, Sweden is keen to use export credits and financial support to boost cooperation using its official agencies like SEK and Swedfund.

“We have three agencies that are active in India and potentially could be even more active. The first is our export credit agency SEK, the second is EKM and the third is Swedfund. They can provide facilities when it comes to financing and export credit guarantees. For big projects, they can also provide feasibility studies and expertise,” said Thesleff, adding that Sweden’s focus in on favouring trade and not aid.

The proposed India-EU free trade agreement could also help the bilateral economic relationship.

“We see the FTA as something that is very important for both parties. It’s equally important for India or maybe even more than for Europe. There is a kind of window of opportunity as India is transforming itself. India also has a demographic dividend. You’re not only a big country, but a big country with a continuously young population for the coming 20, 30 or 40 years, while most of the world around, including Europe and America, are aging societies. I think that there’s a time window to conclude this kind of agreement, because disagreement will open India to the world in a way that I think is hard to underestimate,” Thesleff argued.

Given steady immigration to Sweden over the last few decades, the number of Indians in the country totals roughly 60,000.

“That might not seem a lot from an Indian point of view, but this means 0.7% of our population. I think that in 2030, 1% of our population will be Indian,” Thesleff added.

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Published: 13 Mar 2024, 05:59 PM IST