India, Finland enter deal to boost defence ties

The Governments of India and Finland have signed a preliminary agreement to further defence ties, covering intergovernmental activities as well as private partnerships and investments

January 15, 2020

The agreement covers cooperation in production, procurement, research and development of defence-related equipment

Under the scope of the agreement, cooperation between Finnish companies and Indian defence PSUs is likely to be explored

The defence deal follows the 19th Session of the biennial India-Finland Joint Commission, held in New Delhi in November 2019

Bilateral trade between India and Finland had totaled US$1.4 billion in 2018-19. Finland is India’s 60th largest trade partner globally

The Governments of India and Finland have signed a preliminary agreement to further defence ties, covering intergovernmental activities as well as private partnerships and investments. The agreement, signed on January 15, covers cooperation in production, procurement, research and development of defence-related equipment. The deal, which also includes industrial cooperation, was inked on the sidelines of the Raisina Dialogue 2020. Under the broad ambit of the agreement, cooperation between Finnish companies and Indian defence public sector undertakings (PSUs) is likely to be explored. 

A draft agreement between the two countries in the field of defence amongst others has been under discussion since the DefExpo 2018 and has now been formalised in the run-up to DefExpo 2020, to be held in Uttar Pradesh capital Lucknow between February 5-9, 2020. In 2019, a Finnish delegation has also attended the Aero India show in Bengaluru, after which the Finnish Government had expressed its interest to participate in the ‘Make in India’ vision and formalise an arrangement for defence industrial cooperation. The agreement comes amid growingIndian-Finland trade and investment cooperation.

The latest defence cooperation follows the 19th Session of the biennial India-Finland Joint Commission, held in New Delhi in November 2019. The agenda for the joint commission, which came on the 70th anniversary of India-Finland diplomatic relations, included WTO issues, India-EU BTIA, bilateral trade, and investment relations, and associated challenges and opportunities. On the occasion, the two sides had discussed cooperation in the environment, cleantech, ICT and science, education and skill development, transportation, among others. The EU member currently regards India as a strategic partner.

Bilateral trade between India and Finland had totaled US$1.4 billion in 2018-19. Finland is India’s 60th largest trade partner globally and the 10th largest within the EU. Similarly, India is Finland’s 23rd largest trade partner globally and the fifth largest within Asia. Presently around 100 Finnish companies have operations in India while about 30 Indian firms mainly from the software and consultancy sector are active in Finland. Finnish companies have invested close to US$440 million between April 2000 to June 2019. Within the EU, Finland ranks 12th among countries investing in India.