Published 10 November 2014

India 

– Opportunities for Sweden where Trade meets Innovation

The dominance of the Western World in today’s globalized economy is slowly diminishing in favor for Asia. This trend will not decrease; instead Asia’s importance for the global economy will increase further in the coming years.

While Asia will continue to be a very important market for Swedish companies it is also clear that competition from this part of the world will continue to increase when countries such as China and India try to move upwards global value chains and transform into knowledge and innovation-based economies. This political and economic goal will simultaneously generate new demands that international counterparts, such as Sweden, will have to face.

In order to obtain access to the Indian market, the Indian government calls for more technology transfer in addition to collaborations to strengthen the capacity of the Indian work force, for example through skills development and education and research collaboration. The Indian government also emphasizes the need for product development and manufacturing in India. For Sweden it is important to be aware of this development and to prepare a national strategy with which to navigate in this new environment. One of the objectives of this report is to contribute to a discussion about how this new reality and the challenges that follow should be addressed.

There is considerable knowledge about India and its social development needs within the Swedish bureaucracy. Sweden and India also enjoy well-developed institutional mechanisms with which to further promote relations. Every second year joint commission meetings are held under the auspices of the Swedish Ministry for Foreign Affairs and the Indian government’s Ministry of Commerce and Enterprise. Moreover, a number of Memorandums of Understanding (MoU) have been established in important areas of cooperation, for example science and technology, healthcare and public health, energy, the environment, and defense. These areas of cooperation also tend to coincide with the priorities of the Indian government under Prime Minister Narendra Modi. By promoting infrastructure development Modi strives to create the right conditions for India to develop into a global manufacturing hub. Modi also wants to raise the quality of education, skills development and research, in addition to achieving energy security. The establishment of an affordable and universal healthcare system is another area of priority, as is access to water, sanitation and a clean environment.

This report has been guided by the question of how Sweden should interact with India in order to help India achieve its development priorities while at the same time promoting Swedish interests in research, innovation and trade. Current developments suggest that issues such as collaboration in education and research and trade are becoming more and more intertwined when countries try to transform their economies into innovation and knowledge-based economies. Education and research are therefore important components that may affect the decision to enter into commercial agreements. For Sweden it is important to ensure that collaborations in education and research are established with India so that this type of infrastructure is in place and can be used as part of the package of commercial agreements in the future. Collaboration in education and research is also important in order to ensure that the competence needs of Swedish industries and universities are met. Such collaboration also strengthens the cultural bonds between our countries.

Lastly, it should be added that it is important that Sweden adopts a long term perspective vis-a-vis India, and that personal relationships are given enough time to develop. India is a relations-based society in which personal relationships play a crucial role. The fact that both Sweden and India will have completed parliamentary elections during 2014 means that there is a golden opportunity for the political leadership and bureaucrats to deepen ties, especially now that India’s Bharatiya Janata Party (BJP) gained a majority of its own in the Indian parliament’s lower house (Lok Sabha). The absence of an Indian coalition government means that there is less uncertainty as to whether the government will be able to honor and live up to the agreements that it enters into. Since Narendra Modi took over as Prime Minister there has been a constant flow of foreign government ministers visiting Delhi, and Mr. Modi himself has also undertaken a number of visits abroad. This illustrates the huge current interest for India, both from foreign governments and multinational corporations. Sweden should observe this trend and act accordingly to strengthen Sweden’s visibility and competitiveness on the Indian market.

Title
India  – Opportunities for Sweden where Trade meets Innovation

Serial number
Direct response 2014:19

Reference number
2014/248

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