Trade & investment between India and Denmark do not match the potential

After participating in vibrant Gujarat in 2015 and getting good success in it, Denmark came in again in 2017 as the partner country and signed a number of MoUs within the areas of energy, water, smart city and maritime; some of the participants even got concrete business opportunities on the spot. THE BLUE MOON interviewed  Ambassador Peter Taksoe-Jensen of Denmark on the subject of trade and investment between India and his country. This is what he said:  

Bilateral trade between India and Denmark has shown a continuous decline from $ 1.2 billion in 2012-13 to $1.1 billion in 2016-17 as per the figures given by Department of Commerce, government of India. What is the reason for these declining figures?

While trade and investments between India and Denmark does not match the potential, the numbers are rapidly improving over recent years. Danish imports of goods from India last year rose by 5.1% relative to 2015. In addition, Danish imports of services from India increased by 12 % from USD 729 million in 2015 to USD 817 million in 2016.

While total global trade of Denmark was $ 295.7 billion (2015), trade with India is too dismal. What could be the reasons?

In 2015, India was Denmark’s 38th largest export market for goods, but jumped two spots to 36th position in 2016.

In 2015, India’s import of Danish goods accounted for USD 380 million. In 2016, this number increased by 11.3 %.  

India’s service exports to Denmark  decreased by 9% from US$ 793 million in 2014 to US$ 725 million in 2015, while Denmark’s service exports to India decreased by 17% from US$1281 million in 2014 to US$1062 million in 2015; why this decline?

Currently, 125 Danish subsidiaries are established in the Indian market, but the potential is far greater. Especially companies within sectors such as water, renewable energy, infrastructure, pharmaceuticals, life science, agriculture, food processing, shipping, logistics and IT should be considering the developments in India. At the Danish Embassy in New Delhi and our Trade Office in Bangalore, we work hard to support Danish companies in benefitting from the potential in India.

The honourable Minister for Food Processing, Mrs. Badal, visited Denmark 24-25 August to attend the World Food Summit in Copenhagen and engage with Danish companies in the agriculture and food-processing sector. As a result of that visit, Denmark will become partner country at the World Food India 2017on 3-5 November, where we expect a large Danish business delegation to be headed by the Danish Minister for Food and Environment. Events such as this are helpful in drawing the potential in India to the attention of Danish companies.   

Will Denmark benefit from India signing the FTA with EU and vice versa?

Despite the delay in signing an FTA, the business possibilities are too extensive and attractive to discourage neither the Danish nor the Indian stakeholders.

As a small and open economy, Denmark depends on global trade and we would like to see an ambitious FTA between India and the EU. When the Lisbon Treaty entered in to force in 2009 the EU member states delegated the mandate to negotiate free trade agreements to the EU Commission in Brussels and the EU member states are no longer directly involved. Since India’s termination of the bilateral investment treaty with Denmark and the other EU countries, it has furthermore become urgent to find a way to assure investors of their position going forward. We very much hope that an agreement can be made soon.

What is the source of electricity in Denmark percentage wise – fossil fuel, hydro-electric, nuclear and renewable?

As the first country in the world, Denmark decided to set a goal to become independent of fossil fuels by 2050. The ambitious goal will be reached by increasing energy efficiency and resource optimisation; by expanding the share of renewable energy from sources such as wind and biomass; and by driving the development of an intelligent energy system capable of managing the fluctuations of renewable energy. A full transition away from fossil fuels is perfectly possible with today’s technology.

Denmark used to be dependent on imported oil and we were very hardly hit by the oil crises in the 1970s. Visionary policies were put in place to take a new path to meet growing energy needs and, at the same time, to cater for environmental concerns. As a result, green issues such as energy efficiency, renewables, waste and resource management, clean air and water and sustainable cities have become deeply embedded in policy development. The key learning from the last 40 years is that economic growth and environmental policies can indeed go hand in hand – what we call green growth in Denmark. Since 1980, the Danish economy has grown by almost 80 per cent without increasing gross energy consumption.

Today renewable energy sources accounted for 65.5% of total Danish electricity generation, which is an increase of 5.4% from 2014. Wind energy (48%) was the primary renewable source for electricity followed by biomass (12.9%).

 Denmark is said to be producing 156,300 barrels per day, exporting 98,430 barrels a day and again importing 86,480; Could you please clarify this export and import again of the crude?

In 2016 the Danish crude oil production was around 9 million m3, corresponding to 157,245 barrels per day, a 6 % decline compared to 2014. Just under 5 million m3 or approximately 60% of the oil is exported. The import of crude oil was 4.6 million m3.

A business delegation led by Danish Trade and Development Minister Mogens Jensen along with representatives from 18 Danish companies participated in “Vibrant Gujrat 2015”. What has been the outcome? Any investment/business finalised? If not, what are the reasons?

The Danish business delegation to Vibrant Gujarat in 2015 was a great success. A number of MoUs were signed with clear business opportunities. One such agreement was made by Vestas, a global leader in wind turbines, to establish a blade factory in Gujarat. The plant was inaugurated earlier this year and employs approximately 500 people. 

Denmark held status as partner country in Vibrant Gujarat 2017 and 22 companies headed by the Danish Minister for Energy, Utility and Climate participated. The minister had bilateral talks with Prime Minister Modi and Denmark hosted a country seminar under the title “Making Cities Smart”. A number of MoUs were signed within the areas of Energy, Water, Smart City and Maritime, and some of the participants even got very concrete business opportunities on the spot. 

What is the number of Indians visiting or migrants in Denmark?

The Danish Embassy issued more than 18.000 visas and residence permits to Indians for Denmark in 2016. We have seen a rapid increase in the number of Indians going to Denmark over the last four years and expect the numbers to further increase with the opening of Air India’s direct flight between New Delhi and Copenhagen in September this year.

 Many Indians travel to Denmark for work. In fact, Indians by far constitute the largest share of all work permits issued to foreign nationals in Denmark. Last year, close to 4.000 Indians took up jobs in Denmark, mainly in the IT and engineering fields. We estimate that a total of 12.000 Indians today reside in Denmark.