Whalesbook
Deepening Nordic Partnerships
India is significantly strengthening its strategic and economic connections with Nordic countries. This renewed focus leverages Iceland's leading expertise in renewable energy and the blue economy. The discussions at the India-Nordic Summit highlight a joint commitment to advancing climate action and technological innovation.
Synergy in Geothermal and Blue Economy
Prime Minister Narendra Modi and Iceland's Prime Minister Kristrún Frostadóttir met at the India-Nordic Summit in Oslo. Their talks centered on increasing collaboration in clean energy and the blue economy. Key areas of discussion included geothermal energy use, carbon capture, and storage technologies. Iceland's strength in the blue economy is seen as a major advantage, with the India-EFTA Trade and Economic Partnership Agreement (TEPA) expected to drive significant growth in bilateral trade and investment. India is also advancing its geothermal exploration, including projects in Himachal Pradesh, and exploring geothermal heat for cooling. The India-Iceland SITE Network, established in October 2025, further supports this by combining Iceland's renewable energy systems with India's implementation capabilities.
The India-EFTA Trade Advantage
The India-EFTA Trade and Economic Partnership Agreement (TEPA), effective since October 1, 2025, is central to the growing economic ties between India and the EFTA member states, including Iceland. This agreement, finalized after 16 years of negotiations, aims to eliminate tariffs on most goods and open up trade in services and investment. EFTA countries have pledged to invest US$100 billion in India over the next 15 years, targeting the creation of one million jobs. The pact is expected to boost exports from India in sectors like pharmaceuticals, textiles, and machinery, while EFTA nations will gain better access for their products, such as Swiss cheese and chocolates. The agreement spans 14 chapters, covering intellectual property, sustainable development, and dispute resolution. Its implementation is a key topic at the 3rd India-Nordic Summit, underscoring its importance for future economic collaboration.
Potential Challenges Ahead
Despite the significant opportunities presented by the India-EFTA TEPA, potential challenges remain. India's existing trade deficit with EFTA nations, largely due to gold imports from Switzerland, continues to be a factor. While the agreement seeks to increase India's exports, the country's reliance on imported gold persists, with related duties largely unaffected by the pact. Furthermore, achieving the projected US$100 billion in FDI from EFTA countries depends on sustained economic reforms in India and a stable global economic environment, which could be impacted by external shocks. Navigating the diverse regulatory landscapes of the four EFTA countries will also require thorough due diligence from Indian businesses. Additionally, a strong focus on specific trade sectors like pharmaceuticals and machinery could expose both economies to fluctuations in demand.