Sweden should focus on India to boost its own growth

Sweden should focus on India to boost its own growth

Sweden should focus on India to boost its own growth

Looking east

Sweden is very keen to expand its ties with India. Sensing the importance of India which has grown to the fifth largest economy in the world, Sweden is the twelfth largest FDI (Foreign Direct Investment) investor in India. India is Sweden’s third largest trading partner in Asian continent next to China and Japan. Swedish exports to India constitutes only one per cent of its international trade and has tremendous growth potential in the coming years. Sweden is now suffering from slump in demand for its exports due to debt crisis in Europe. Therefore it is looking forward to expand its horizons to countries in Asian Continent which are less affected by the world economic slowdown.

Remarkable growth

Sweden recorded a 5.5% growth last year. This is a remarkable performance given the European recessionary conditions. Sweden is particularly keen on South India which it wants to groom as its trade and investment destination. Sweden is keen to develop projects like waste-biomass-energy conversion projects, operation & development of ports and transmission networks for power lines. Recently the Swedish Ambassador to India Lars-Olof Lindgren visited Chennai and had a discussion with the Tamil Nadu government.

Excellent fighter aircrafts

Sweden lost an opportunity for a defence contract last year. Sweden was confident that Indian Airforce would pick up its single-engine powered Medium Multi-Role Combat Aircraft because of its operational efficiency and lightweight virtues. But Sweden lost the contract narrowly. Maybe, the lobbying efforts were not adequate to clinch the deal. However, Sweden has not lost hopes and is trying to press Indian defence ministry to have a relook at these aircrafts.

Swedish economy

One novel thing that is happening is that even small and medium sized Swedish companies are coming to South India and establishing their factories here. Usually only large companies venture out and establish their shops. Sweden is Western Europe’s fastest growing economy. Sweden is a AAA rated nation. Half of its economic output comes from exports, which is a healthy sign. But stalled global recovery can put pressure on the Swedish economy. The Swedish Ritsbank raised the interest rates in July last year and signalled that two more rate hikes were warranted. If the global economy goes into recession, definitely Swedish economy will be hurt large as Sweden does not have a huge population to rely upon. Before July last year, the Ritsbank raised interest rates seven times in one year. The repo rates were brought to 2% in July. Swedish government forecast a growth of 4.6% for its economy last year and a 3.8% growth this year. Finance Minister Anders Borg is keeping his fingers crossed over the happenings in the European theatre in the next few months. Now Ritsbank has cut the interest rate for the first time since 2009. Seven-day repo rate was also lowered to 1.75%. Swedish krona is traded at around 9 krona per euro and 6.8 krona per dollar.

Power and energy sector

Sweden wants to clinch deal with Indian companies in sustainable energy sector. Energy sector in India is poised for big boost. Various sources of power like wind energy, solar power, thermal power, nuclear power and hydroelectric energy are being developed to solve India’s power problem. The next three or four years are crucial for India’s power sector. Sweden will do well not to miss the opportunity here.

Sweden should focus on India to boost its own growth

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