Denmark can help ‘Make in India’ lead to ‘Make India’
Freddy Svane, Ambassador at the Royal Danish Embassy in New Delhi, is positive that India-Denmark relations are currently at their best ever. He talks about the major contours of the Green Strategic Partnership between the two countries, and how India is now emerging as a critical part of the global strategy for Danish companies.
IBT: Let’s begin with a brief overview on what India-Denmark relations have been like over the years? What are the main inflection points and how is it looking at present?
Freddy Svane: In fact, we are celebrating 400 years of the first interaction between India and Denmark this year. In November 1620, minor fleets came to Tranquebar in Tamil Nadu and that led to the establishment of trading post. Over the years we expanded into Serampore which is close to today’s Kolkata. For whatever reason, we also came in possession of the Andaman and Nicobar Islands and made a minor attempt to do some trade in Goa as well. An important point to be made is that we didn’t want to colonize – we were, and we are traders by heart. Eventually, we left in 1845, handing over whatever we had to the British.
Then we had moved into modern India after the Second World War ended, even though we had a couple of Danish companies operating already in India. We also had two engineers from FL Smith that settled down in Mumbai – Henning Holck-Larsen and Søren Kristian Toubro, and in fact, they created what is L&T today. It was not Danish in the sense, but still many of the Danish values are very much present.
IBT: What would you identify as the major highlights of Indo-Danish cooperation post-independence?
Freddy Svane: In the 1960s, Denmark came in big time with DANIDA (Danish Development Assistance). We cooperated with India in a number of fields, including education and agriculture. In fact, Denmark was part of what we call the White Revolution; we brought in cows from Denmark, which were cross-bred with Indian cows. The milk yield increased drastically and today India is the world’s largest milk producer.
We were also, in fact, a part of the Green Revolution through a company called Haldor Topsøe and its owner Frederik Axel Topsøe (who passed away a couple of years ago). He developed a lot of technology that was aimed at reducing the use of fertilisers.
IBT: How do the relations between the two countries stand at present? What is the vision and key elements of the proposed Green Strategic Partnership between India and Denmark?
Freddy Svane: In 2008, our then Prime Minister, Anders Fogh Rasmussen (later Secretary General for NATO), intensified efforts to strengthen ties with India. I joined as an ambassador in 2010. Although we had very good relations, we still had an issue with the Kim Davy case that led to friction in ties. But things have improved post-2014 once again, and now I think we have the best relationship ever.
We are personally talking about a Green Strategic Partnership, which is based on the mantra that the Indian Prime Minister Narendra Modi defined – namely that India has the scale and Denmark has the skills. When I rejoined India as an ambassador last year, I also added ‘speed’.
It essentially implies a strong focus on many of the strategies that the Indian PM has launched, like doubling the income of farmers, new India, etc. It will have a very strong focus on whatever relates to clean tech, energy, water, food processing, logistics, etc. So, this is based on cooperation; not us trying to sell whatever we have.
IBT: Can you share some specific areas where the two countries are collaborating at the government level? Also, what are the major areas where Danish companies are making investments into India?
Freddy Svane: One such example is wind energy. From September this year, we will have an expert sent to Ministry of New and Renewable Energy (MNRE), which will help the Indian side in developing the regulatory framework for the wind industry. We have also set up a centre of excellence for offshore wind in Chennai and signed a number of MoUs – wind turbines, solar panels, smart grids, robots, etc.
Trade has always been very small. Denmark’s exports to India are valued at just around 2 billion Danish Krone (US$ 320 million) annually. One issue of course is that Danish products are highly priced in comparison, so I think we need to find a better balance with the requirements in India. Luckily, we have seen many Danish companies investing in India. Danfoss, a world leader in cooling, has huge operations in Chennai. Vestas, a wind turbine maker, has a unit in Ahmedabad where they are doing the blades for wind turbines and another one in Chennai, where they are doing the nacelles, apart from an R&D centre.
If you take logistics, Maersk has been present in India for many years, presently through its daughter company at Nhava Sheva. In fact, they are supporting and handling somewhere between a fifth and a third of all containers coming to India, which is a huge operation. Then they are also operating the Pipavav terminal in Gujarat.
We are building a foundation for even more expanded trade and cooperation in many fields – strong focus on water, food processing, farming, energy, etc. Also, our focus is on how we can combine some of these things – turning waste into wealth, waste into energy, etc. Consider the issue of farmers burning husk and straws in Punjab and Haryana. A Danish company Burmeister & Wain Scandinavian Contractors has provided the technology. There are two power plants in Punjab where paddy waste is being incinerated instead of burning on the field, where the pollution of course will be higher and always unlimited.
So, I think we like the idea of Make in India – I would also like to see this program turn into Make India. So, the aim is to produce things in India for the domestic market and exports.
I think here we already are ready. Our universities are ready, our business people are ready and politically we are also ready. Our relationship for the time being is really excellent and we are looking at all possible close and cordial cooperation with the Indian Government and the State Governments.
IBT: When it comes to Indian companies exploring Denmark for trade an investment, what has been the progress so far and what unique advantages does Denmark offer as an investment destination for Indian companies?
Freddy Svane: We have a well-functioning infrastructure and very welcoming schemes to bring in foreign investments, experts, etc. I think we are largely a technologically driven society, even though we are still a farming society. But our service industry is big, and we are very strong when it comes to digital solutions. In the public sector, we are very strong when it comes to logistics – we have done everything related to shipping but also what is supporting and has to support shipping.
All the big Indian IT majors like TCS, Wipro, Infosys and HCL are in Denmark. Around 30-40,000 Indian IT specialists are working in Denmark on and off. They have been the backbone of Denmark.
In that context, Indian IT competencies are not only about scale, but skills as well. The industry has been a very important partner for the globalised and technology-driven Danish industry.
If you look into other sectors, the investment from the Indian side is far less and the only major investment that I recall from the last couple of years was when Wipro took over the Danish company called Deisignit.
So, I hope to see even more investments in future but also accepting the fact that the opportunities are far bigger in India that’s why I think, we would see many more Danish companies investing in India. Even when it comes to utilising digital platforms, you are extremely good. And we all know if you have to globalise even further, you would have to embed these technologies. I think, India in that context will be kind of substance for growth, I mean if we have a little bit of Indian skills, a company can grow even more.
IBT: What is the perception of Danish people when it comes to India or Indian companies?
Freddy Svane: If you take the Danes, India is known of course, particularly when it comes to Taj Mahal and yoga. When we had the Coronavirus eruption, we had a lot of Danes in Goa, which is a preferred destination for vacations. We also have Danes who have settled over there. Goa is a special place for Danes when it comes to India.
When you take companies, I think to start with, much had to do with L&T, which created a kind of environment or ecosystem for Danish companies. India has always been seen by our business people as little bit complicated, a place where you could have some production but it would never ever become an important part of your global strategy. But you have to be there given the size of Indian market, the number of Indians and so forth. But ease of business constraints have historically prevented them from making major commitments.
It has changed over the years and one part of it is due to the fact that early on, Indian operations with Danish companies were considered as relatively minor and the local GM had absolutely no say. But that is no longer the case.
If you take big companies like Danfoss, Grunfdfoss and Maersk today, Indian operations are a part of global strategy. This summer, I met with many of the leading Danish company executives and they also endorse this view unequivocally.
If India would like to see companies relocating, it has really to offer what is required. If you want India to become the preferred destination of big foreign investments, then you have to utilise this small window of opportunity available now due to the geopolitics. You have to ensure that companies can get licenses, land, electricity, water, etc without hassles. India can do it, and now is time for action.
I do see very comforting reforms coming up. I think one of the empowered groups have been working on that (Invest India), and they are trying their best to develop new systems. So, India must change, and I know India is changing. I am also positive about the system, where you have the states competing to rope in FDI through special schemes, regulations, etc. But we need to see change in terms of concrete tangibles on the ground.
IBT: How can India truly leverage the power of its SMEs in your view, given that they form a major component of the industrial landscape in the country?
Freddy Svane: I think SMEs form the backbone of economies across the world, be it Denmark, India, US or Germany. You have so many SMEs in India. Of course, you need to address these companies and their special needs and so forth. You also need to realise that at some point of time, you cannot just make them survive, because they might not be fitted for the kind of development that you would like to see in the future.
The good thing in India is that I think you are very innovative and very entrepreneurial. So, even if out of consolidation, many go bankrupt, some new SMEs will surface and create a far better ecosystem for a stronger Indian economy.
I think I can give you one example from Denmark. If you look into agriculture, we had thousands of small-sized farms many years ago. Today we hardly have around 5,000 farms, and this is a business story. Danish farmers consider themselves as businessmen. A lot of farmers had to give up their farms and look for other job opportunities. The number of people working in farming and on the farms decreased drastically. It was a painful process that took over 30 years.
Today we have a very strong agricultural sector; we produce food that can feed four times the size of the whole population. We have 6 million people, so we are producing agricultural produce that can feed four times our populace. Our farming techniques are extremely specialised and our farmers own processing companies. So, if you are into meat, fish or fruits or vegetables and so forth, everything is being processed – handled not through private companies but through cooperatives.
On top of that they also have what I call a global advisory service for the farmers, where the newest technology across the world often will be introduced and there you will test new products, new technology, use of drones or unmanned farming devices. So, I think you cannot just leave things as they are, that goes for India and its small and medium sized companies as well. You need to foster a change but a change that will make you stronger, and I am pretty sure that can happen in India. COVID-19, for better or worse, might have forced some to close down, a trend you will see across the world.