INDIA-DENMARK BILATERAL RELATIONS 

The Kingdom of Denmark is located in northern Europe, and is the Southern-most of Scandinavian countries. Denmark is Europe’s longest standing monarchy, firmly established since the year 985. On adoption of country’s first written constitution in 1849, absolute monarchy gave way to representative democracy. Denmark’s geographical position and its membership of Nordic Council, NATO, OSCE and EU, has resulted in a unique role for it as a bridge between Europe and the Nordic countries. It has assumed the rotating presidency of the EU on 1July 2002. The third India-EU Summit was held in Copenhagen in October 2002 under the Danish Presidency of the EU.

Bilateral Visits

Pandit Nehru’s visit to Denmark in 1957 laid the foundation for friendly relationship between India and Denmark. Subsequently, a number of high level visits have served to consolidate political and economic ties between the two countries. PM Poul Nyrup Rasmussen led a large business delegation during his visit to India in September 1995.  A Bilateral Investment Promotion and Protection Agreement (BIPA), a Protocol on Foreign Office Consultations as well as a MoU for co-operation between the CII and the Confederation of Danish Industries (DI) were signed during the visit.

Mr. Poul Nielson, Development Cooperation Minister, visited India in April 1998 to attend the meeting of the Global Environmental Facility. A delegation of the Foreign Policy Committee of the Danish Parliament visited India from 27 February to 1 March 2000. The Foreign Minister, Mr. Niels Helveg Petersen visited in February ‘97. Danish Minister for Environment, Mr. Hans Christian Schmidt participated in the annual Sustainable Development Summit Organised by TERI at New Delhi From 9-12 February 2002. He also met with the Union Environment Minister Shri T.R. Balu.


EAM Shri Jaswant Singh visited Copenhagen on 2-3 April 2001.  This visit marked the resumption of political-level contacts after a gap of around 3 years since nuclear tests by India in May 1998.  He met with Danish PM and Foreign Minister and discussed bilateral and multilateral issues. Danish Foreign Minister, Mr Per Stig Moller visited India on 29-30 April 2002 as a part of his familiarization trip to South Asia.

Former Prime Minister Shri Atal Bihari Vajpayee visited Copenhagen from October 9-11,2002 in connection with the third India-EU Summit, which was followed by the India-Denmark Bilateral Summit that took place after a gap of 19 years (previously late Mrs Indira Gandhi had visited Denmark in 1983).  The former Prime Minister was accompanied by the then EAM Shri Yashwant Sinha, former Minister for Disinvestment, Shri Arun Shourie and a large official and business delegation.  The PM addressed the India-EU Business Summit on October 9, 2002, which was organised jointly by the business communities of EU and India represented by the Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), Union of Industrial and Employers’ Confederations of Europe (UNICE) and the Confederation of Danish Industries (DI). 

During the political discussions with the EU leaders, the two sides expressed their commitment to promote and protect all human rights, including the right to development and fundamental freedoms.  They reiterated their determination to combat terrorism in all its forms.  The two sides also reviewed the progress in the India-EU relations since last Summit held in New Delhi in November 2001 and agreed for further enhancement of bilateral economic relations, including trade. The two sides also reviewed the situation in south Asia and the Middle East and discussed several important international issues of mutual interest.

During the India-Denmark bilateral summit held on October 11, 2002, both the sides agreed to further enhance and expand their bilateral trade and economic relations.  Her Majesty Queen Margrethe II hosted a lunch and the Danish Prime Minister Mr Anders Fogh Rasmussen hosted a dinner in the honour of PM Shri Vajpayee.

The 3rd India-EU Business Summit adopted a set of specific recommendations to facilitate and improve India-EU trade and investments in specific sectors like biotechnology, power & energy, textiles & clothing and financial services.


Visit of the Danish Crown Prince to India

 Close on the heels of the Third India-EU Business Summit, the Crown Prince of Denmark HRH Prince Frederik headed a Danish export campaign to New Delhi and Mumbai from February 1-8, 2003. The Crown Prince was accompanied by the Deputy Prime Minister and Minister for Economic and Business Affairs Mr Bendt Bendtsen.  The Danish Deputy Prime Minister held discussions with Shri Jaswant Singh, Minister of Finance & Company Affairs and Shri Arun Shourie, Minister of Communications, Information Technology & Disinvestments.  The Danish business delegation focussed on energy, environment, farming and health sectors, and organised business conferences, seminars and contact meetings in India.

Foreign Office Consultations

The annual Foreign Office Consultations institutionalized since 1996 have provided a framework to discuss ways to add substantive content to our political and economic relations.  The 4th round of FOC with Denmark was held on 14 December 2000 in New Delhi. The 5th round of FOC with Denmark took place in Copenhagen on 29 August 2003, during which the two sides agreed to further intensify the political dialogue between the two countries in various areas. The next round of FOC is proposed to be held in India in 2004.

Economic & Commercial Relations

Indo-Danish economic relations, which have traditionally revolved around Denmark’s developmental aid to India under its Danida programme, are headed for a paradigm shift in the direction of growth in trade and investment.  In 2003 India repaid its state loan to Denmark amounting to DKK 528 million as part of Government of India’s decision to repay its outstanding loans amounting to $1.6 billion to 14 countries, including Denmark. Consequently, Denmark has decided to phase-out the bilateral strategic aid to India by the end of 2005.

The Danish Ministry of Foreign Affairs in a press release dated 19 December said “the change in Danish-Indian cooperation reflects the fact that India’s role on the global stage is changing. India’s economy is booming. There is growing focus on India as a regional power and an important partner in a globalised world. India now sends the signal that she wishes to make her presence felt as a donor towards poor nations, which is why aid cooperation with Denmark will be brought to a close.”

Clearly, Denmark recognises India’s reforms and capabilities to emerge as a major economy in the 21st century and is keen to enhance political, economic and trade cooperation with India. Denmark has shown interest in encouraging mutually beneficial cooperation with India in the knowledge-based industries, particularly biotechnology and information technology, besides non-conventional energy resources, food processing, shipping and pharmaceuticals.

During the Foreign Office Consultations (FOC) held between India and Denmark in August 2003, both sides acknowledged that there is scope for further increasing the annual bilateral trade of US $400 million by focusing on non-traditional areas like Information Technology, Biotechnology, pharmaceuticals, food-processing and non-conventional energy resources. It was mentioned that there are great strengths on both sides for further encouragement of Small and Medium Enterprises (SMEs) in India.  Both sides also agreed in principle to establish a Joint Commission to give more focus to political, security and economic aspects of the bilateral relationship.

India and Denmark have concluded a Bilateral Investment Promotion and Protection Agreement (BIPPA) and a protocol on the Avoidance of Double Taxation in the 1990s. Institutional frameworks between the trade bodies on both sides exist in the form of MoU for cooperation between the Confederation of Indian Industry (CII) and the Confederation of Danish Industries (DI) concluded in 1995 and a Joint Business Council (JBC) between FICCI and the Danish Chamber of Commerce and Industry, launched in October 2002.

Bilateral Trade

The ongoing economic reforms process in India has resulted in considerable growth and diversification of bilateral trade. In addition to the traditional components of the trade basket, Denmark now also exports windmills and their components, communication equipment, and other hi-tech items to India.  The annual bilateral trade hovers around US$500 million.

India's bilateral trade with Denmark increased from DKK 2883.0 million ($381.4 m) in 2002-2003 to DKK 3599.9 million ($559.7 m) during 2003-2004, registering a health growth of about 25%. The balance of trade remains in India's favour, though it declined marginally from DKK 674.4 million ($89.2 m) in 2002-2003 to DKK 474.9 million ($73.9 m) in 2003-2004.

India-Denmark Trade Statistics 

(Financial-year)

 

Financial Year

India’s Exports to Denmark

India’s Imports from Denmark

 

Total Trade

India’s Trade
Balance Surplus

DKK Million

US$ Million

DKK Million

US$ Million DKK Million US$ Million DKK Million US$ Million

  2003-2004

2,037.4

316.8

1, 562.5

242.9

3,599.9

559.7

474.9

73.9

2002-2003

1,778.7

235.3

1,104.3

146.1

2,883.0

381.4

674.4

89.2

2001-2002

1,608.3

195.9

1,199.9

146.2

2,808.2

342.1

408.4

49.7

2000-2001

1,628.7

199.9

1,153.8

141.6

2,782.5

341.5

474.9

58.3

1999-2000

1,320.1

181.8

1,121.3

154.4

2,441.4

336.2

198.8

27.4

1998-1999

1,321.2

195.2

   778.9

115.1

2,100.1

310.3

542.3

80.1

Financial Year: April - March                                                                                        Source: Denmark's Statistics

                   (Note:  All figures in US $ are approximate figures)


(Calendar-year)

Calendar Year

India’s Exports to Denmark

India’s Imports from Denmark

Total Trade

India’s Trade Balance Surplus

2004*

608.3 419.0 1,027.3 189.3

2003

1,983.4

1,458.2

3,441.6

525.2

2002

1,657.3

1,055.6

2,712.9

601.7

2001

1,618.9

1,176.6

2,795.5

442.3

2000

1,558.6

1,229.6

2,788.2

329.0

1999

1,294.2

   995.9

2,290.1

298.3

* January-March

India's Exports

India's exports to Denmark have grown from DKK 1778.7 million (~ US$ 235.3 million) in 2002-2003 to DKK 2037.4 million (~ US$ 316.8 million) in FY 2003-2004, registering a healthy growth rate of nearly 15%. Apparels (41%), Textile Yarns/ Fabrics (9.5%), Organic Chemicals (3.76%), Metal Goods (3.69%), Footwear & components (2.75%), Pharmaceuticals (2.64%) and Furniture (2.36%) are the important commodities of India’s exports to Denmark.

Denmark’s imports from India account for less than 0.5% of Denmark’s global imports; so clearly there is considerable potential for increasing India’s exports. Focus needs to be given to non-traditional areas like Information Technology, Telecommunications, Ports, Power, Biotechnology, Food Processing, Wind Mills, Engineering Goods and Health Care Sector for giving a fillip to the bilateral trade, besides further exploiting India’s traditional strengths in garments, sea-foods and small-scale industries.
 

Top Ten Commodities of India's Exports during 2003-2004

India’s Exports

to Denmark
(Value: DKK Million)

FY
 2002 –2003

FY
2003 –2004

Increase/
Decline

Percentage
Increase/
Decline

Apparels

836.80

851.84

15.04

  1.8%

Textile Yarns & Fabrics, Carpets

194.50

206.65

12.15

  6.2%

Organic Chemicals

  76.60

  69.25

- 7.35

  9.6%

Miscellaneous Metal Goods

  75.28

  75.08

- 0.20

  0.3%

Footwear & Components

  56.01

  84.21

28.20

50.3%

Medicinal/Pharmaceutical Goods

  53.79

  72.96

19.17

35.6%

Goods of Non-Metallic Minerals

  48.41

  69.86

21.45

44.3%

Furniture

  48.18

  45.65

- 2.53

  5.3%

Electrical Machinery & Apparatus

  40.55

  42.63

  2.08

  5.1%

Travel Goods

  33.69

  41.05

  7.36

21.8%

Jewellery, Toys, Sports Goods

  26.12

  30.11

  3.99

15.3%

Heating/Lighting/Sanitary Items

  25.40

  25.64

  0.24

  0.9%

Tea, Coffee, Cocoa, Spices

  20.26

  14.57

- 5.69

28.1%

Fruit & Vegetables

  19.50

  18.46

- 1.04

  5.3%

Industrial Machinery & Accessories

  19.34

  20.97

  1.63

  8.4%

Colouring & Tanning Agents

  16.81

  33.99

17.18

  102.2%

Fish & Shellfish

  14.49

    9.71

- 4.78

33.0%

Dairy Products, Eggs

  12.86

  28.20

15.34

  119.3%

Vehicles & Components

  11.28

  58.11

46.83

  415.2%

Raw Mineral Oil & Derived Products

    0.01

  67.90

67.89

-

 

India’s Imports

India’s imports from Denmark showed a dramatic increase of 41.5% from  DKK 1104.3 million in 2002-2003 to DKK 1562.5 million in 2003-2004. Major items of India’s import from Denmark include power machinery & motors, medicines/pharmaceuticals, industrial machinery, metal waste/ore, windmills, vessels and communication equipment.

Danish Investments in India

Denmark ranks as the 27th largest foreign investor in India, ahead of countries such as Spain, Portugal, Russia, and Ireland. Approvals for Foreign Direct Investment (FDI) from Denmark totalled Rs 426.47 million in 2003, declining marginally from the figure of Rs. 549.21 million in 2002.  The total Danish investment approvals in India from 1991 till November 2003 have reached the figure of Rs. 6793.25 million. 

The AP Møller Group, which has invested US $ 90 million in India in the recent times by acquiring a 29% equity stake in the Gujarat Pipavav Port, is one of the leading investors from Denmark.  Other major investors from Denmark include TDC Tele Denmark (Rs 950 million), Cheminova Agro (Rs 777 million), F.L.Smidth & Co. (Rs 745.90 million), Danfoss (Rs 352 million), Adtranz Signal (Rs 350 million), Chr.Hansen (Rs 338 million), Danisco (Rs 220 million), Maersk Medical (Rs 193 million), Sabroe Refrigeration (Rs 165.20 million), APM Group (Rs 139.49 million), DISA (Rs 114.16 million), Micon (Rs 100 million), LM Glasfiber (Rs 94.60 million), NKT Elektronic (Rs 69 million), Lundbeck (Rs 60 million), Egmont International Holding (Rs 51 million) and Maersk Data (Rs 50 million).

Until 1991, Danish investments had been concentrated in the cement and fertilizer sectors.  However, after 1991 the range of industries within which Indo-Danish technical and financial joint ventures have been established has widened considerably to include sectors like computer software, radio-paging, refrigeration systems, wind-turbines, automotive V-belts, pharmaceuticals, beer production and publishing activities.

Of late, the Danish investors have shown considerable interest in India. The Danish investment management group Bankinvest’s newly launched investment funds focusing solely on Indian and Chinese shares have attracted more than 18,000 Danish customers who have invested a total of DKK 1,083 Million (US$ 180 Million) in these shares.  In particular, Bankinvest has identified five large-scale Indian undertakings – Bajaj Auto, Infosys, Ranbaxy, Reliance Industries, and the State Bank of India – as first-class investment targets from the point of view of Danish shareholders.  The leading Danish Bank, Jyske Bank, has also floated India-specific shares for the first time in February 2004.

The Danish ‘East Asiatic Co.’ recently put forth its intention to invest DKK 140 million (about Rs. 1 billion) in a new nutrition factory in India – the company’s single-largest investment since 1995. Denmark’s largest industrial group, the container shipping and oil exploration giant A.P. Møller /Maersk has made further, huge investments in the Gujarat Pipavav Port, through its subsidiary APM Terminals, increasing its total stake in the port to 29% by buying shares to the tune of DKK 330 million. It is reported that in the next two years, as much as DKK 1.4 billion (Rs. 10 billion) will be invested by APM Terminals with the purpose of expanding the port to a full-rigged container terminal. In December 2003, the Indian Investment Centre (IIC) recorded another sizable investment of Rs. 340.1 million made by Global Renewable Energy Partners – a subsidiary of the Danish windmill major Micon A/S now merged with its former competitor Vestas A/S – with the objective of developing wind farm projects in rural India.

Keeping in view, the growing interest of Danish investors in India, an Investment Promotion Seminar is proposed to be organised in Denmark in September 2004 with the active cooperation of Confederation of Indian Industry (CII) and the Børsen, the leading financial newspaper of Denmark, with a view to promote India as a preferred destination for Danish investments.

                                Danish Investment Approvals in India 

Calendar Year

FDI Approvals (in Rs million)

1991-1995

2441.60

1996

  729.01

1997

1067.15

1998

   295.41

1999

   761.65

2000

   263.41

 2001 

   259.34

 2002 

   549.21

             2003

  426.47

Total (since 1991)

 6,793.25

   Source:  Secretariat for Industrial Assistance (SIA), Ministry of Commerce & Industry  

       

Indo-Danish Joint Ventures in India

A total of 221 Indo-Danish joint ventures (JVs) have been formed in India (until October 2003), of which 149 are financial joint ventures and 72 are of a technical nature. 20 new Some of the recent Indo-Danish JVs that are established in India include that of the leading Danish pharmaceutical company Lundbeck A/S (Rs. 60 million investments) and the major Danish industrial combine Danfoss A/S (Rs. 276 million investments). Danish information technology company ‘Navision’ is also reportedly planning to invest Rs. 480 million in India.

Biotechnology & Information Technology


Biotechnology and Information Technology are the two potential and emerging areas in which India and Denmark can utilise their synergies to boost their bilateral trade and economic cooperation. 

Biotechnology

During the visit to Denmark of a high-level Indian Biotechnology Delegation led by Secretary in the Department of Biotechnology, in September 2002, several areas of possible cooperation in the field of biotechnology between the two countries were identified. These include:

Ø      Proteomics and protein mass spectrometry

Ø      Bioinformatics

Ø      Joint research in Tuberculosis, with the ultimate aim of developing an effective   drug or vaccine.

Ø      Joint research establishing an essay system for following the biological activity of the traditional Indian medicines.

Ø      Joint Stem-cell Research

Ø      Joint Study of metabolic diseases (Obesity and Type 2 diabetes)

Ø      Conducting a workshops on Indo-Danish collaboration in proteomics and bioinformatics and in Stem-cell research

Ø      Exchange of faculty, research scholars and students on short and long term basis.

Ø      Joint collaboration between Danish and Indian pharmaceutical companies on development of drugs against malaria and leishmaniasis.

Ø       Possibility of establishing a joint R&D Centre in India in future.

A Memorandum of Understanding (MoU) between India and Denmark in the field of Biotechnology has been agreed upon by both the sides and is expected to be signed during the visit of the Danish Minister for Science, Technology, and Innovation Mr. Helge Sander to India in the coming months.  The MoU is expected to provide institutional framework for a more focussed cooperation between the two countries in this emerging field.

Earlier in July 2002, the University of Southern Denmark had entered into a MoU with the Institute of Bioinformatics in Bangalore aimed at collaborative research and the exchange of scientists.  The University has also been cooperating with Central Drug Research Institute (CDRI), Lucknow in certain medical projects.

In February 2004 a leading Indian biotech company M/s Avesthagen opened an office in Copenhagen and is engaged in the development of a new pharmaceutical along with its Danish subsidiary, Copenhagen Capacity.


Information Technology

There are over a dozen Indo-Danish joint ventures in the Information Technology sector that are operating in India in different areas like software development, data processing, consultancy, SIM card personalization centres, pipeline simulation software, etc.  Navision, Maersk Data, LIC Consult, Licenergy, Adtranz Signal, Procon, Rescom, Tumlara Corporation, Tellabs and BarcoNet are some of the important companies that have set up joint ventures in India.  Navision has already invested over US$ 12 million in its India projects and is expecting to generate sales worth US$ 20 million by December 2004.

Two leading Indian companies Tata Consultancy Services (TCS) and Larsen and Toubro (L&T) have been successfully operating in Denmark for the past several years. TCS, which started its operations in Denmark in 1990, is primarily involved in Manufacturing, Telecom, Transportation, Banking and Insurance & Retail. As far as technology areas are concerned, E-Business is the key focus of TCS with the main areas being ERP, .NET and Engineering (CAD/CAM). In February 2004, Subramaniam Ramadurai, CEO of TCS visited Denmark to persuade Denmark’s second largest mobile telephone company Sonofon to let TCS handle a major part of its developing and operating IT works.

On the other hand, L&T started its operations in Denmark for the entire Nordic region in April 2000 with a focus on areas like software projects, resource augmentation, consultancy and offshore projects. L&T has set up a strategic partnership with Ramboll Informatik in August 2000 for addressing Denmark specific customers.  L&T accounts nearly 25-30% of the market share of all the Indian operations in Denmark. The company has won noteworthy contracts in Denmark during the last couple of years.

Besides the Indian companies mentioned above, the Indian software giant Satyam and the IT-training experts, NIIT, are also keen to enter the Danish market. The Information Technology-Division of Lister Technologies, Chennai is also in the process of setting up a branch office in Copenhagen. 

In February 2004, Azim Premji, CEO of WIPRO visited Copenhagen and struck a deal with the Danish IT Factory, appointing the Danish company as a sales office for WIPRO for the Scandinavia region.

More and more Danish companies are now outsourcing work to India. During 2003, the Scandinavian Airlines, SAS, outsourced its entire, complicated ticket accounting system to Mumbai-based IT-undertakings, following the example of the British Airways. Other Danish companies like Valtech and Front Avenue are among a growing list of companies that are looking towards India for potential outsourcing. 

The number of Indian IT professionals in Denmark has also grown constantly during the past 3-4 years.

Shipping Sector

 Shipping and development of port infrastructure are promising areas for encouraging meaningful bilateral cooperation between India and Denmark.  The first India-Denmark Shipping Conference was organised in October 2003 in Copenhagen. The Conference was inaugurated by the Danish Deputy PM Mr. Bendt Bendtsen and the then Minister of Shipping of India Mr. Shatrughan Sinha. The Conference focused on i) strengthening the Indo-Danish maritime dialogue - including stimulation of commercial relations, integrated global networks, hub ports, and commercial partnerships; ii) possibilities of public/private partnerships and co-operation between India and the EU in the area of shipping; iii) exchange of views on current shipping policy issues, including market access, OECD, and WTO; iv) cooperation on safety and security within the framework of IMO and v) training of sea-farers and mutual recognition of certificates

Clearly, enhanced efforts should be made by both sides to boost cooperation in various sectors of economy.  India has already become a favoured destination for outsourcing by several Danish companies. The Confederation of Danish Industries (DI) has gone on record to state that there are “many possibilities for Danish companies to do business with the big Indian market”.  In the reverse direction, it could just as easily be said that there are similarly many opportunities for Indian companies to do business with the highly sophisticated Danish market.

****

 June 2004
 

 

 
Home
 
About us
 
Visa Services
 
Consular Services
 
Commercial Wing
 
NRI Corner
 
News & Media
 
Culture
 
Tourist info
 
Study in India
 
Science & Technology
 
India-Denmark Relations
 
India-Denmark Review 2003
 
India Links
 
Denmark Links
 
Forthcoming Events
 
India in Danish Press
 
Prime Minister's Visit to Denmark
 
Photo Gallery
 
Ministry of External Affairs
 
Learn Hindi on the Web

 


Click to see Map of India