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Why PM Modi’s visit to Sweden is crucial for the global economy | India News

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NEW DELHI: Prime Minister Narendra Modi has embarked on a crucial visit to Stockholm where he will meet the prime ministers of Denmark, Finland, Iceland, Norway and Sweden as part of the first India-Nordic summit.

Smart cities, renewables, trade, growth, global security, investment and climate change will dominate discussions. Sources said Modi has been particularly keen to build closer ties with the Nordic countries and there are hopes for some significant outcomes.

The Prime Minister landed on Monday at the Stockholm Arlanda Airport accompanied by a business delegation. He was received by his Swedish counterpart Stefan Lofven and received a ceremonial reception.

This first ever joint meeting comes at an important 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.

Nordic countries PM is visiting-Infographic-TOI

MIXED SIGNALS


The heads of government of the Nordic countries, already rattled by the sound of US President Donald Trump’s protectionist cries, are expected to highlights benefits of free trade during the summit.

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

Export-oriented Nordics are particularly wary of the world’s largest economies shifting towards 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, Bloomberg reported.

MORE BUSINESS WITH 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 India — the world’s largest democracy. A free trade agreement with the EU has been years in the making, with few results.

nordic trade gfx

“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, according to Bloomberg. “Compared to China, it has the potential to grow.”

The pull towards India’s $2.3 trillion economy is obvious. 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, according to a Bloomberg report.

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. While foreign investment into the country can create much-needed jobs, the BJP 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 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, meanwhile, is keen to sell its windmills 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, Bloomberg said. “They’re hoping that India’s interests in this region will grow.”

SECURITY AGREEMENT


India and Sweden will also sign a host of bilateral agreements, including a general security agreement, which is a precondition for Sweden to share sensitive technology with India if, for instance, Swedish company Saab is chosen to build fighter jets in India. The agreement has been finalised and will be signed during the PM’s visit.

Bilaterally, India and Sweden may sign an innovation partnership agreement. The pact is derived from a broader agreement by India and Sweden in 2016 during the visit of the Swedish PM Stefan Lofven to India — the two sides are hoping to focus on a few areas which will get greater attention.

THE SCHEDULE


The summit sees Sweden’s Lofven host Modi on Tuesday 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.

The Prime Minister will also call on King of Sweden Carl XVI Gustaf during the day and meet industry captains from both countries to chart out a future roadmap of cooperation in sectors such as trade and investment, science and technology, clean energy and smart cities.

It will be only the second time that all five Nordic countries will have a summit with one country, the only other time was with the United States during Barack Obama’s term. The only difference — this will be a summit of heads of government, not including heads of state.

For India, it will mark another first. It will be the first time India and Denmark will put behind an uncomfortable phase in their bilateral ties for a summit-level meeting, the first since the Purulia arms drop case soured relations between New Delhi and Copenhagen.

After Stockholm, Modi travels to London to attend the Commonwealth Heads of Government Meeting, where Britain hopes to bolster its trade ties around the world in anticipation of Brexit. Modi will hold bilateral talks with British counterpart Theresa May.

The External Affairs Ministry had on Saturday said Modi would also meet German Chancellor Angela Merkel during a brief stopover in Berlin on April 20 after concluding his visits to Sweden and the United Kingdom.

(Inputs from Bloomberg)

Updated: April 17, 2018 — 5:40 am

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