Comment by Ivar Slengesol, Director of Strategy and Business Development, Export Credit Norway
In 2017, India accounted for just NOK 2.4 billion of Norway’s total exports of goods at NOK 860 billion. Although representing an increase on previous years, this figure is still on a par with exports to other, far smaller, Asian countries like Malaysia, Thailand and Vietnam. Exports to China were seven times greater, at NOK 17 billion.
India is set to become the world’s most populous nation by 2030, with 1.5 billion inhabitants.
Ivar Slengesol, Export Credit Norway
India’s economy is growing by 7% to 8% annually. Population growth is also high: India is set to become the world’s most populous nation by 2030, with 1.5 billion inhabitants. In other words, the country represents a huge market.
One possible explanation for low Norwegian exports to India is that doing business in India can be notoriously challenging. India has a history of protectionism, corruption and convoluted bureaucracy, but the current government, under Prime Minister Narendra Modi, is seeking to improve framework conditions for the business sector.
India has improved its ranking in the World Bank “Ease of Doing Business” index significantly over the past two years, from 130 to 77. (Norway is ranked 7th.) Achieving this advance in such a short time is impressive, particularly given the country’s size and complex system of government, under which considerable power is devolved to the state level.
Challenging market conditions alone cannot fully explain Norway’s 0.3% export total, however. Sweden’s exports to India, for example, total more than NOK 10 billion – four times Norway’s figure.
The Norwegian Government’s strategy for cooperation with India” in December last year is a welcome first step. The primary objective is to “strengthen Norway’s bilateral relations and economic ties with India”. The sub-objectives include boosting Norwegian businesses’ market share in India’s maritime and energy sectors.
Norwegian business are well-positioned for success in these sectors. It is important that the detailed action plans which are to be prepared in support of the strategy specify clearly the current size of Norwegian companies’ market shares, by how much these are to be increased and how this is to be achieved.
Export Credit Norway’s task is to promote Norwegian exports by providing customers with loans on favourable terms. Indian law and financial regulations have complicated this task. This is why we are trying out alternative approaches. This week, we signed a letter of intent related to cooperation with an Indian lending institution. The ultimate objective is a framework agreement which gives further impetus to export financing, particularly with regard to small and medium-sized enterprises.
The time for talking about India’s potential is over. Team Norway can now begin achieving results.