A Swedish Corner in the EU-India Trade Deal, Why the Nordic Nation Stands to Gain
At a time when the global economy is being reshaped by geopolitical uncertainty, climate imperatives, and shifting supply chains, the conclusion of a Free Trade Agreement (FTA) between India and the European Union (EU) is both timely and consequential. It reflects a shared conviction that open, rules-based trade and trusted partnerships are essential to sustainable growth.
For India and Sweden, longstanding partners bound by common values, innovation, and a commitment to sustainability, this defining moment is not only a vote of confidence in each other’s economies, but also an opportunity to move beyond deepened economic ties towards a deeper, more strategic partnership. As Sweden’s Ambassador to India Jan Thesleff and Volvo Group’s Kamal Bali argue, the FTA has the potential to unlock investment, accelerate innovation, and strengthen value chains that benefit businesses and consumers on both sides.
The Big Picture: India’s Moment
India today is the world’s fourth-largest economy and one of the youngest nations globally, with nearly 65% of the population under the age of 35. It is home to the fastest-growing IT talent pool globally. This unique combination of scale, demographics, and digital capability makes India an increasingly attractive destination for long-term investment, innovation, research, and industrial partnerships.
The EU-India FTA is more than a trade pact. It is a statement of intent that India and Europe will advance together, through a partnership that is practical, resilient, inclusive, and makes sense for both parties. For European companies, the agreement lowers entry barriers and simplifies procedures, opening up new opportunities in one of the world’s most dynamic markets.
For Sweden specifically, the FTA represents a chance to deepen a relationship that has already proven its worth. Swedish companies have been present in India for over a century, contributing to manufacturing, mobility, clean energy, digitalisation, healthcare, and industrial innovation. Nearly 7% of EU companies in India are Swedish, making Sweden the largest exporter to India among EU nations, while India is Sweden’s eighth largest export market.
Sweden’s Innovation Edge
Sweden is one of the world’s most innovative countries and Europe’s leader in unicorns per capita. Its strong innovation ecosystem, spanning start-ups, research institutions, and global companies, makes Sweden a natural and valuable partner for India’s rapidly expanding innovation and entrepreneurship landscape.
The FTA will encourage new Swedish firms to enter the Indian market, building on a strong base of around 300 Swedish companies that already employ 2.5 million people across India and their supply chains. This footprint is set to grow further as barriers fall and opportunities expand.
For Indian companies, particularly MSMEs, the agreement offers improved access to European markets, enabling them to integrate more deeply into global value chains and scale their capabilities. This two-way flow of trade and investment will benefit all parties, expanding opportunities for innovation, business, jobs, and people-to-people ties.
The Automotive and Mobility Sector
From an industry perspective, the agreement holds particular scope for the automotive and mobility sector. As India moves forward with its ambitions for cleaner, safer, and more efficient transportation, Sweden is well-positioned to be at the forefront of this development.
Sweden brings expertise in commercial vehicles, electrification, and alternative energy pathways, coupled with road safety technologies that align closely with India’s priorities. Companies like Volvo have already established a strong presence in India, and the FTA will create conditions for further collaboration, investment, and technology transfer.
The agreement will also support the EU’s and India’s green transition, building on existing cooperation such as the Leadership Group for Industry Transition (LeadIT). By promoting low-carbon technologies, sustainable industry practices, and joint leadership on global climate action, the FTA reinforces the commitment of both sides to a sustainable future.
Projected Gains
Once the FTA is ratified, trade between India and Sweden is projected to double to over $14 billion within five years. This is a significant increase that will benefit businesses and workers in both countries. But the true value of the agreement, as Thesleff and Bali note, will lie not just in numbers, but in the quality of partnerships it enables and the trust it reinforces.
The FTA creates a framework for collaboration that extends beyond trade. It facilitates investment, encourages joint research and development, and strengthens supply chain integration. It sends a signal to businesses in both countries that the relationship is valued and that the conditions for cooperation are improving.
Beyond Economics: A Strategic Partnership
The EU-India FTA is not just about economics; it is about geopolitics. In a world of increasing uncertainty, where supply chains are being reshaped and alliances are being tested, trusted partnerships matter more than ever. India and Sweden share common values—democracy, openness, the rule of law—that provide a solid foundation for long-term cooperation.
The agreement also has implications for Europe’s broader engagement with India. As the EU seeks to diversify its partnerships and reduce dependence on any single country, India emerges as a natural partner. Its large market, young population, and growing technological capabilities make it an attractive destination for European investment and collaboration.
For Sweden, the FTA is an opportunity to demonstrate its commitment to open trade and multilateralism. In a world where protectionist pressures are rising, Sweden stands with India in advocating for rules-based trade and economic integration.
The Road Ahead
The ratification of the FTA is just the beginning. Realising its full potential will require sustained effort from both sides. Businesses must be informed about the opportunities and supported in navigating new procedures. Regulatory barriers must be addressed. Trust must be built and maintained.
But the foundation is strong. The relationship between India and Sweden has been built over more than a century of engagement. Swedish companies have invested in India, created jobs, and contributed to the country’s development. Indian talent has enriched Sweden’s innovation ecosystem. The FTA builds on this history and creates a framework for the next phase of partnership.
Conclusion: A Blueprint for the Future
The EU-India FTA lays the foundation for a new era of partnership. By working together, India and Sweden can turn shared ambition into shared success. This is not just a trade agreement, but a blueprint for the next chapter of global growth.
For Sweden, the agreement represents an opportunity to deepen ties with one of the world’s most dynamic economies. For India, it offers access to European markets and a partnership with one of the world’s most innovative nations. For both, it is a statement of intent: that in a world of uncertainty, they will advance together.
As Thesleff and Bali conclude, the time has come for Sweden to be a part of India’s remarkable growth journey towards Viksit Bharat 2047. The FTA makes that possible. The rest is up to the businesses, innovators, and entrepreneurs who will seize the opportunities it creates.
Q&A: Unpacking the Sweden-India Angle in the EU FTA
Q1: Why is Sweden particularly well-positioned to benefit from the EU-India FTA?
Sweden has a long history of engagement with India, with Swedish companies present in the country for over a century. Nearly 7% of EU companies in India are Swedish, making Sweden the largest EU exporter to India. Around 300 Swedish companies already employ 2.5 million people across India and their supply chains. Sweden is also one of the world’s most innovative countries and Europe’s leader in unicorns per capita, making it a natural partner for India’s expanding innovation ecosystem. The FTA will lower barriers for new Swedish firms to enter the Indian market.
Q2: What specific sectors are expected to benefit from enhanced India-Sweden cooperation?
The automotive and mobility sector is highlighted as having particular scope. Sweden brings expertise in commercial vehicles, electrification, alternative energy pathways, and road safety technologies that align with India’s ambitions. The green transition is another key area, building on existing cooperation like the Leadership Group for Industry Transition (LeadIT). The FTA will promote low-carbon technologies, sustainable industry practices, and joint climate action. Clean energy, advanced manufacturing, digitalisation, healthcare, and industrial innovation are also areas of potential collaboration.
Q3: How will Indian companies, especially MSMEs, benefit from the FTA?
Indian companies, particularly micro, small, and medium enterprises (MSMEs), will gain improved access to European markets. The FTA enables them to integrate more deeply into global value chains, scale their capabilities, and expand their business opportunities. By lowering entry barriers and simplifying procedures on the European side, the agreement creates conditions for Indian firms to compete more effectively in one of the world’s largest and most affluent markets.
Q4: What are the projected trade gains from the FTA for India and Sweden?
Once the FTA is ratified, trade between India and Sweden is projected to double to over $14 billion within five years. This significant increase will benefit businesses and workers in both countries. However, the authors emphasise that the true value of the agreement lies not just in numbers, but in the quality of partnerships it enables and the trust it reinforces—in investment, joint R&D, supply chain integration, and long-term cooperation.
Q5: Beyond economics, what is the strategic significance of the FTA?
The FTA is a statement of intent that India and Europe will advance together through a practical, resilient, and inclusive partnership. In a world of geopolitical uncertainty, trusted partnerships based on shared values—democracy, openness, the rule of law—matter more than ever. The agreement signals that both sides are committed to open, rules-based trade and multilateralism at a time when protectionist pressures are rising. It also facilitates Europe’s diversification away from over-reliance on any single partner, with India emerging as a natural ally.
