India Finland flags combined

Article by Ekaterina Serova published on the webpage International Centre for Peace Studies.

In 2024, Finland and India will celebrate the 75th anniversary of diplomatic relations. So far, Finland has launched the first comprehensive DESI-strategy1 on cooperation with India, which emphasizes Finnish intention to continue further strengthening bilateral ties in ICT industry, education, circular economy, and in the field of sustainable development.

However, the analysis shows that in many respects such intentions and initiatives are determined by the internal needs of Finland itself, rather than that of India, including the need of replacing the Russian market and Chinese FDI with the Indian one.

Facing a massive skilled labour shortage, Finland is steadily developing tools to involve a number of highly qualified Indian immigrants and talented students in knowledge-based industries. Thus, various government projects on attracting talents from Asia and Latin America are in progress. The ‘Talent Boost’ programme is a good example, which, in addition to India, focuses on Brazil, the Philippines, and Vietnam.

Finland seeks, as it once did in relations with the former USSR and Russia, to introduce itself to Indians as a bridge or mediating country that can deliver the necessary product services when entering European markets and replacing Chinese companies in critical economic and technological fields. On the other hand, Finland could become a launching pad for Indian tech companies to expand their footprints in Europe. To begin with, Cyent, a Hyderabad-based engineering and technology solutions company, has fully integrated the Finland-based entity Citec into it, becoming India’s first acquisition in Scandinavia and helping to strengthen India’s position in Sweden, Norway, Germany, and France.

Today, Finland relies on cooperation only with large Indian IT companies such as Infosys, Wipro, Tech Mahindra or Tata Consultancy Services, which in turn broadens opportunities for bringing Finnish software products to highly competitive markets of the USA, Singapore, and Australia. On the other hand, the motivation is not merely about earning profits, but Finland’s desire to maintain the status of a technological power in conditions of fierce competition and, in fact, being squeezed out of this niche by local manufacturers. For example, Finnish business houses study risks of abandoning Nokia devices in favour of cheaper smart devices offered by the Indian company Reliance Jio.

As for energy cooperation, both countries are members of the Minerals Security Partnership (MSP), established by the United States in 2022. At first glance, it is not obvious how Finland and India ended up on the same bench, but the liberal agenda proffered by both leads to policy-linkages between these two countries. The MSP aims to leverage the resource base of non-Western countries to reduce European dependence on China and accelerate the transition to clean energy.

In this regard, it is worth mentioning that the Finnish energy company Wärtsilä and Lappeenranta-Lahti University of Technology (LUT) contribute to developing a model for India's transition to a low-carbon economy by 2050. Finnish business emphasizes that the potential of using hydrogen energy remains high in India and requires new facilities, including energy storage systems and small power plants.

It is believed that India will use Finnish technologies in the construction of renewable energy facilities. Furthermore, LUT university and the National Institute of Advanced Studies (NIAS) are also engaged in developments in the field of small modular nuclear reactors. The expected visit of Minister Raj Kumar Singh to Finland is likely to give a new impetus to the development of bilateral cooperation in the fields of mutual interest. Finland-India relations are poised for a smooth take-off in the days to come.

Ekaterina Serova is Deputy Director, The Arctic Centre, Institute of Northern European and Arctic Studies Petrozavodsk State University Doctoral student, School of International Relations, St.Petersburg State University. The views expressed here are her own.

Source: International Centre for Peace Studies

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