Almost 99 per cent transactions are digital in Estonia

One of the leading ICT countries Estonia has solved problems the world struggles with – digital identity, cyber security, Ultra high access, usage and interoperability across citizens, business and state levels. The Estonian state offers over 3000 e-services to citizens, businesses and now e-residents. Ambassador of Republic of Estonia, Riho Kruuv  speaks out in an interview to THE BLUE MOON.

Is the growth in two-way trade relations between India and Estonia encouraging over the past few years?

Last year we celebrated the 25th Anniversary of the establishment of diplomatic relations between our countries. The opening of the Embassy in New Delhi has given a tremendous boost to our ties with India. In 2014 when the Embassy opened, Estonia’s exports to India were worth €40.4 million whereas, in the first half of 2016, we exported goods worth €35.1 million. In relative terms to all Estonia’s exports, India’s share has grown from 0.3% to 0.6% in less than two years. I believe these numbers are bound only to increase as we move forward. As the Member State of the European Union, the Free Trade Agreement between India and EU is important in the long run. Estonia is a strong supporter of free trade and investment policies, and we hope that FTA negotiations can be finalised soon and bilateral investment treaties will be extended until the time FTA formulates. For a small export-oriented economy, this agreement is imperative to us in lifting our bilateral trade relations to a new higher level. 

Increasingly, Indian companies are investing abroad, including Europe. What are the potential investment avenues for Indian investors in Estonia?

Estonia has over the past 25 years created an excellent track record and its commitment to ICT as country strategy creating unique skills, experience and mindset. Value propositions exist in solution sourcing with an industry experienced in working with regional and global clients, helping manage critical data, solutions and infrastructure.

Knowledge transfer is key focus area with globally successful and valuable ICT innovations. As a world leader, we are well placed to advise companies on digital transformation and implement e-governance solutions. In the startup space, early pioneers like Skype and Transferwise have provided invaluable capital, confidence and experience providing the next generation of startups an excellent platform.

We have recently introduced simpler migration rules to facilitate moving to Estonia for people who are to work in a startup company to encourage global entrepreneurs looking for a platform for a quick launch. Almost 99% of the transactions are digital in Estonia, with financial services firms embracing digital ID’s, e-Tax, cashless society and cyber initiatives from the beginning. Financial technology is today one of the fastest growing sectors in Estonia with high innovation, world class startups and state of the art R&D. 

Cyber security is today a growing concern world over, in 2007 Estonia successfully defended a large scale cyber attack. This attack helped us in becoming aware of the risks evolved, created the need to develop and manage safeguards for our solutions and networks, lead to highly reputed and globally recognised research organisations.

Further growth is expected in cyber security from trends such as Cloud, IoT and growth of mobile services, etc. We are happy to see that HCL, one of India’s IT giants, has recently opened an office in Estonia. We are working to bring similar enterprises in other sectors, as well. Given that Estonia now offers e-residency to Indians which allows one to create and run an EU-based company in Estonia from a distance, we especially hope that many small and medium size Indian businesses will choose to open an office in Estonia, perhaps to be closer to their European or North American clients.

Estonia can boast with a 0% corporate income tax on re-invested profits which greatly helps companies in a growth stage. More details are available on same at

By the way, one of the most prominent e-residents of Estonia is Minister of Justice and IT, Ravi Shankar Prasad! 

Could you share some light on the India Foresight Project?  How do you see its progressing and what impact it has made on India-Estonia relations?

The India Foresight Project by the Estonian Development Fund has played a pivotal role in enhancing Estonian- Indian business relationships. The contributions that were made by members of this Project stressed the importance of creating more awareness about India as an economic partner in the Estonian business communities. One of the key outcomes of the India Foresight Project was the opening of the Embassy in New Delhi.  

Estonia’s emergence as leading player in e-governance. How do you think this knowledge can help India in its e-governance drive?

E-governance can be a key area of cooperation between the two countries. The Digital India and smart city initiatives can draw a lot of similarities to e-Estonia. The Estonia state offers over 3000 e-services to its citizens, business and now foreigners. As a result, Estonian state saves two per cent of GDP per annum by being paperless also, increasing competitiveness and citizen engagement.

Estonians save 5.4 working days on average per annum by using e-services and are free to manage their affairs remotely. We are aware of what a paramount difference digitalization of governance has made to the 1.3 million people in Estonia. We can barely imagine what a difference it can bring to the lives of 1.3 billion people in India!

In 2014, Estonia and India formally signed a MoU to further our cooperation on e-governance. The e-governance Academy regularly organises training for Indian civil servants explaining the functioning and architecture of Estonian e-governance systems.

During the previous visit of Minister of Justice and IT, Ravi Shankar Prasad to Estonia, we had an opportunity to explore further ways how to increase this cooperation. Looking at the future we may now bring our co-operation to a new level by exchanging more students and co-operate in research & development related to e-governance and cyber security.

Estonian e-governance solutions companies are very interested in sharing the knowledge and the implementation expertise. However, it is unlikely that these companies will come to India unless they are matched with the right partners. 

Could you elaborate on the innovation and startup culture in Estonia? What can India learn from Estonian innovation and startup system and vice versa?

In fact Estonia has been ranked number one for the number of startups per capita. Over the last 15 years, Estonia startup communities have managed to create an eco-space which allows for cohort growing, winning awards and attracting investments.

Among various cultural nuances between the two communities, Estonian can probably be less self-critical and try not to, undersell their ideas. What Estonians can apparently learn from Indians is how to do a sales pitch. One clear difference between the startups in Estonia and India is the fact that more or less each Estonian startup has to expand globally during an early phase to succeed. Indian startups, on the other hand, have a vast and rapidly-growing domestic market which may put them in a different place. Ideally, we would like to see an innovation platform that will bring together various stakeholders in the startup ecosystems in Estonia and India and create opportunities for Tech Transfers, Startup Connect, Internships, Joint Grand Challenges, Co-innovation and Soft Landing services.

How can India and Estonia increase the people to people contact and tourist flow on both sides?

India has made a remarkable move in recent years by offering e-visas to much of the world. This step alone has made India much more readily accessible for Estonian tourists and business visitors alike. Estonian Embassy in New Delhi has started to use VFS offices to allow people to apply for Estonian visas from 16 cities across India. VFS is a great example of how an Indian company can provide an excellent client service and, therefore, become the biggest visa facilitation service provider in most countries where they exist.

We also continue to attract more students from India year-on-year whereas Estonia is still a relatively unknown tourist destination over here, something that I would like to see changing over the next couple of years.

In March 2017, the British Airways will launch a Tallinn-London route which will start flying to Heathrow Airport twice a week and is expected to increase its frequency in a few months.

We believe the Indian tourist will enjoy travelling to Tallinn via this new destination.  There are many connections with the fastest being Finnair (9 hours from Delhi to Tallinn with a layover in Helsinki with Finnair). You do have many other choices too i.e. Air France (via Paris), generally Jet Airways (via Amsterdam and Paris), KLM (Amsterdam), Lufthansa (via Frankfurt and Munich), Turkish Airlines (via Istanbul).