Indo-Norway cooperation transcends traditional contours of trade
Helge Tryti, Commercial Counsellor, Royal Norwegian Embassy, elaborates on the future of Indo-Norway cooperation, which is strongly geared towards energy and marine resources. In addition, he believes that given the size of the Indian market, setting up manufacturing facilities can be a more prudent option for companies rather than just exporting.
IBT: Norway has framed a New India strategy that outlines priorities till 2030. What is the rationale behind the strategy and what are the key focus areas?
Helge Tryti: The two key areas that are important for Norway in its relationship with India are the ocean and energy. We have a competitive advantage in these areas, and also see major demand from the Indian side.
We have had good cooperation in both shipping and ship building for a number of years. India is the second largest provider of seafarers to Norwegian ships. We have all the latest technologies when it comes to a clean maritime sector with electric propulsions, hydrogen and other new fuels. An example is the use of LNG in India. Norway has the largest LNG fleet in the world currently and we have a good LNG fueling infrastructure along the coast. About half of the world’s LNG ships in operation are Norwegian, which showcases our vast experience.
We also have expertise in regasification, floating regasification units, etc. and new technologies are being developed. We are building fast boats with Hydrogen as propulsion. We think hydrogen is an up and coming technology for a number of applications that require clean fuel.
Then we have the aquaculture industry. India is one of the largest exporters of aquaculture products, primarily shrimps. Norway is also one of the larger exporters of seafood. We have technological expertise for all the different elements going in aquaculture, including recirculation systems (RAS), feed, vaccination, fingerling production etc.
We have a long standing cooperation with India when it comes to the fishery sector. It started with the Kerala Fishery Project (Kochi) in 1953. In Manali, Himachal Pradesh, we had some test sites set up in late 1980s, for farming of Rainbow Trout, which is also a high potential area for development. Then there is the surveillance of oceans, ports and deep sea mining. There has been a big interest in Krill fishing from the Indian side. So, basically the whole blue ocean area is of great importance and potential area for cooperation between our countries
When it comes to energy, Norway has the largest production of renewable energy in Europe. Around 98% of all our electricity is renewable, primarily hydropower-based. Now we are also building up land-based wind and coming up as one of the larger players in the offshore wind market.
Norway has also initiated cooperation with Indian DST’s on the Grid and Smart Grid technology. In addition, we have taken many delegations to Norway to look at how we are developing the Grid and Smart Grid with Nord Pool, which runs the leading power market in Europe.
We see now that the Grid is getting more and more integrated. Power cables are installed between Norway and EU so we can trade and balance the grid more easily. Energy from solar and wind can, in situations of excess production, be converted and stored as hydrogen. This can in turn be used to balance the grid when the sun is not shining or the wind is not blowing.
Norway is the fastest adapter of electric vehicles with the highest share of EVs per capita in the world. This is because of the EV policy by the Norwegian government. It has incentives like exemption of 25% VAT on purchase, no import or purchase taxes, toll roads and ferry fees waived off by 50%, low annual road tax, 50% discount on municipal parking, 40% reduced company car tax, access to bus lanes and exemption from 25% VAT on leasing. About 70% of all new cars sold run on electricity and more than 50% are pure electric.
IBT: Any case studies you could mention, where Norway is really helping India address some of the challenges across sectors which you have mentioned?
Helge Tryti: India and Norway have a task force on Blue economy and two joint working groups in the blue ocean space – one in marine and one in maritime.
The Norwegian company ASKO Maritime just signed an agreement with Cochin shipyard for construction of two autonomous electric vessels to run in Norway. It’s been a long time since India built a ship for a Norwegian ship owner, so that’s a good sign. Apart from that, Cochin Shipyard has many Norwegian suppliers for all sorts of maritime equipment that you need in a vessel.
As an example, the part owned Norwegian company Maritime Montering is delivering the interiors to the aircraft carrier being built at Cochin Ship Yard. Other types of maritime equipment that Norwegian companies can deliver could be for propulsion, navigation equipment, propellers, water-proof doors, cabling, kitchen – whatever you need on board a ship.
Also, we would like to cooperate on developing the inland waterways and coastal shipping. In Norway, sea-based transportation plays a vital role and I think it is important for India to get heavy transports off the roads. Typically we have many ship yards building catamaran type of ships – dual keel with a very small draft of approximately 1 ½m +/- 20 cm. India is asking for 2½-5 m draft for the inland waterway vessels.
Modern passenger ferries in Mumbai, along the coast, in the backwaters or inland waterways can be a good addition for passenger transportation in India. For example, instead of 50 buses running from Cochin to Mumbai every day, we could potentially have a speed boat along the coast taking a lot more passengers.
IBT: What is your perspective on the recent reforms India has taken like Make in India or improving the ease of business for companies, even for foreign companies? How do you see it possibly impacting Norwegian investments in the coming years?
Helge Tryti: Norway has set up quite a few factories in India over the years. We have Elkem in chemicals, Yara in fertilizers, four aluminum plants and factories within paint and food sectors as well. In all, we have 18 Norwegian companies producing in India. Make in India is a good thought. However, we have seen difficulties in importing goods needed for the production to the extent that one of the factories at one point was close to shutting down in India. I think import can be a challenge, when you cannot produce the way you would like to produce because there are restrictions on what you can import. Such issues should be addressed on priority.
IBT: How has been the past record of Indian investment in Norway and what benefits does Norway offer to India as an investment destination?
Helge Tryti: Innovation Norway in India does not work much on getting international investments to Norway. But we do have some areas where we promote investments. For example, investments in data centers, where we have clean energy and a very stable political environment. Norway is a cold country and typically we have a number of data centers being built inside the mountains. So, they are safe and can run on clean energy. Sustainability is becoming very important for a number of international businesses. Indian data centers located in Norway can be a good solution for Indian IT companies.
There are two more areas where Norway is seeking investment, which have high potential. As Norway is blessed with substantial hydropower resources, there is good potential to produce green hydrogen. With carbon capture and storage, you can also go for making blue hydrogen, ammonia, syngas, methanol and a whole lot of downstream chemicals.
Another area is battery manufacturing. There is focus on green energy at present, for which you need storage. Norway is an ideal destination for producing batteries because first of all, battery production requires much energy, which can come from our green energy resources. Secondly, the required materials – Lithium, Graphite, Cobalt etc are available in Norway or in the Nordic region.
IBT: How is the post-COVID scenario looking for the economy, and how are you looking at your relationships with countries like India?
Helge Tryti: COVID should not have any major impact as such. When it comes to Norway, we were hit in more than one way due to COVID. Oil and gas prices fell quite a bit because of lockdown and reduction of activity in the world – that’s our major export sector. Being a large energy provider, reduction in activity hits us.
Then we have tourism, like anywhere else in the world. Tourism is dependent on having tourists every year on a continuous basis. Closed borders because of Covid hinder the international tourists we depend on. But Norway is fortunate in the way that we managed to keep the country somehow rolling by subsidizing companies, giving them compensation and making sure that they survive at least the first wave.
Many employees were laid of temporarily, but our government partly paid salaries to the unfortunate that lost their jobs.. Norway is fortunate in that it can afford that. Lately, the unemployed numbers due to COVID have dropped substantially. The unemployment rate skyrocketed initially. Although it’s not back to normal, it’s getting much better.
IBT: How do you view the present level of trade between India and Norway and the potential going forward?
Helge Tryti: If you look at the official trade balance between Norway and India, it’s not very impressive. But I think that the numbers do not show the right picture for a number of reasons. One of your biggest industries is IT and IT-related, which does not show up on the trade balance. We have a big shipping industry – at least 2 large ships coming to India every day and a lot of sea farers on the ships. Most foreign PhD students in Norway are Indian.
Even when it comes to trade, it doesn’t reflect the real trade. The numbers only show direct trade between Norway and India. Much of our trade goes via international hubs like Singapore, Dubai, etc. Also, when we provide oil and gas, that will often not show up, because it’s not necessarily from Norwegian wells.
We could have produced it in Africa or the Mexican Gulf or somewhere else. Then it can be sold to India through in international subsidiary and not show up on the India-Norway trade balance.
As another example, Norwegian salmon exported to India could look like it comes from Poland, as that is where it was processed. India is also a huge market for some of our other main exports like aluminum. But the Indian market is so big, that exporting is not necessarily the best solution. Rather, it is prudent to set up a facility for what you are producing in India for a shorter way to the market. So, I think we need to look at the whole business and how it works, to see how well we are doing when it comes to cooperation. I would rather use the word cooperation than trade balance, and the business cooperation is good.
IBT: What are the areas of business potential you see for Indian firms when it comes to Norway?
Helge Tryti: In IT services, obviously India is very highly recognized and well thought of. We also benefitted from importing raw materials for the pharma industry during COVID, which was difficult to get.
It’s not just Norway; the world has got a wakeup call during COVID, wherein we see how dependent we all have become on imports from China. I think we will be looking for alternatives, at least to have options for not putting all the “eggs in one basket”. You can also see that the FDI in India during COVID has not fallen. On the contrary, it has stayed stable or increased. Apple has started to produce its iPhone in India. Similarly, I think a lot of companies will be looking to India for production.
Mr. Helge Tryti is for the last 7 years Commercial Counsellor at the Royal Norwegian Embassy in India and the Director, Innovation Norway India. During his career, Mr. Tryti has held a number of management positions, nationally and internationally, focusing on business development in companies like Xerox, IBM, KPMG, Storebrand and Eika Group. He holds an MBA in International Management from Thunderbird Global School of Management and a Master of Business and Marketing from BI Norwegian Business School.