India-Sweden trade poised to double if India-EU trade pact is finalised

According to Sven Ostberg, Consul General of Sweden, India and Sweden’s bilateral trade could double within five years if the India-EU Free Trade Agreement is concluded and India continues its green transition. Ostberg noted that negotiations on the trade pact have accelerated significantly over the past year. Twelve chapters have been completed, and both parties are working intensively to finalise the remaining eight. The goal is to complete the agreement by the end of 2025, with formal signing planned for the India-EU Summit in January 2026.

Ostberg observed that India–Sweden trade increased from approximately US$2.8 billion in 2016 to nearly US$7 billion in 2024. He emphasised that this volume remains modest relative to the size and capabilities of both economies. Swedish foreign direct investment in India is approximately US$2.5 billion, ranking Sweden 21st among foreign investors.

Ostberg stated that the combination of a Free Trade Agreement and India’s green transition could enable bilateral trade to double within five years. He identified green technologies such as renewable energy, electric vehicle infrastructure, and hydrogen, as well as smart manufacturing, automation, digital services, cybersecurity, healthcare, and life sciences, as primary growth drivers. If these sectors expand as expected, bilateral trade could surpass US$15 billion by 2030, supported by increased investment as Swedish companies localise production and research in India.

Currently, more than 280 Swedish firms operate in India, employing over 220,000 individuals. While the automotive, telecommunications, and retail sectors are well established, Ostberg highlighted significant untapped opportunities in green hydrogen, advanced battery recycling, cybersecurity, and health technology. He further noted that Swedish small and medium-sized enterprises in industrial automation, chemical process technology, and life sciences are considering expansion. Additionally, digital infrastructure and AI-driven manufacturing analytics represent emerging areas where Swedish expertise could complement India’s scale.

Ostberg emphasised the significance of recent agreements between the Maharashtra government and Swedish companies Candela and Echandia, as well as the partnership involving Garden Reach Shipbuilders and Engineers and Sweden’s Berg Propulsion. He described these memoranda of understanding as strategic steps toward modernising India’s maritime capabilities and reflecting a broader shift toward innovation and sustainability in maritime transport. Candela Technology AB will collaborate with the Maharashtra government to deploy electric hydrofoil passenger vessels for water taxi services between Mumbai and Navi Mumbai Airport, reducing road congestion and emissions. Echandia Marine AB will contribute to the development of marine battery energy systems for tugboats, potentially reducing emissions by up to 30%. Ostberg stated that these projects align with Maharashtra’s Blue Economy vision and India’s climate objectives, while providing Sweden an opportunity to showcase its clean technology leadership in a rapidly expanding market.

Ostberg also acknowledged ongoing challenges in the bilateral relationship. He noted that many Swedish companies and members of the public lack a comprehensive understanding of India’s market potential, which can result in investor caution. He further indicated that complex compliance requirements and intellectual property concerns in India may discourage Swedish small and medium-sized enterprises from pursuing more aggressive expansion.

Source: Fortune India