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Increased nervousness around investments in China, says Norway’s ambassador to India

There is an increased nervousness around investments in China, said Norway’s ambassador to India, Hans Jacob Frydenlund, in an interview to Mint. Frydenlund spoke about a new Cold War in the making with Russia’s hot war in Ukraine.

He added that the Ukraine war has wiped out any trust in Vladimir Putin, with the conflict being a primal national security interest for Norway. He also spoke about Norfund, a Norwegian investment fund for emerging markets, increasing its focus on India, with a substantial proportion of its funds going to India. Edited excerpts:

Where do you see the India-Norway relationship today?

What I see today is rapidly increasing cooperation between Norway and India. Trade has doubled since I arrived in India three years ago and this year also looks promising. We have worked on an “India Strategy” that was developed in 2018 and was implemented in 2019. We have identified areas of particular importance for cooperation. The first was democracy and development of a rules-based international order. Then we have Oceans, climate, energy and higher education among others. We’re in the middle of a major climate crisis. Norway is very ambitious about being as green a country as possible. But if India doesn’t succeed we will not succeed. Norway has just 5 million inhabitants while India’s population is 350 times that size. However, we have some strengths like oceans and energy and there is some basis of cooperation there. Since oceans have always been at the heart of the Norwegian economy, we’re particular strong with that. Over 80% of our exports come from ocean-related industries like petroleum and fishing. This focus on oceans, climate and energy drives our cooperation with India. We have established a task-force on sustainable blue economy and we have implemented projects in integrated ocean management. We’re cooperating on several projects on marine litter like single-use plastics. We are also developing cooperation on green shipping. We have established a similar task force on energy and renewables. We have a wide range of actors on the Indian side: the Ministries of renewable energy, power and petroleum and natural gas. On our side, we have the Ministry of Foreign Affairs, Ministry of Oil and Energy and the Ministry Environment among others.

How exactly does Norway hope to help India meet its energy needs?

Norway is a resource poor country. The country is just one big rock. Only 3% of the territory is arable. But we are rich in oceans, hydroelectric power and petroleum. We were also the first country to make green hydrogen. One of the most interesting transactions for us when Reliance Industries bought an energy company named REC Solar, a Norwegian company. We bring these technologies to the table. Energy companies like Equinor have established themselves here. NorGas, another Norwegian company, is looking into liquified natural gas delivery.

India’s energy development is a priority for us. By cooperating on renewable energy, improving links to the grid and investing in battery technology will help. The development of solar is crucial. Statkraft, which is a Norwegian renewable energy company, has opened its first solar plant while Norfund, which is our state investment fund for emerging markets, made a $100 million investments in rooftop solar last year. The fund has a capital of about $1 billion for emerging markets investments and a substantial proportion has been going to India.

There seems to be an increasingly flow of investment out of China towards countries like India. Given that Norway has had tensions with China, will we see some of its investments flow towards India?

That is a decision for individual companies to make. India will have to provide enough incentives for investments and we have a number of companies that have invested here. At the same time, we just had a business climate survey which showed that investments are going to the whole of India. Investments in India are going to Mumbai, Delhi and the western part of the territory which are seen as more attractive than others. There is an increased nervousness around investments in China. Norwegian companies are not different from other companies in the world and it will take time before these changes in investment flows materialise.

Energy and climate is a major part of Norway’s foreign policy. Do you see the recently concluded CoP 27 as a success?

We seem to go from one CoP to the next. This one has not been considered as a success but there has been some movement forward like accepting the principle of “loss and damage” and creating a fund for the same. There has been criticism against developed countries for not providing funding but Norway has been providing its share for adaptation and loss and damage. As a former colleague, Erik Solheim (former Executive Director, UN Environment Programme) has pointed out, when it comes to CoPs, we have to look at what we don’t achieve and not what we achieve. For example, India was criticised for not committing to greenhouse gas reductions at CoP26 but afterwards it came out with very ambitious national goals. So while we didn’t get exactly what we wanted out of CoP 27, we have kept this super tanker moving and we must keep it moving. So you can look at this CoP as a glass half-full or half-empty.

One pillar of your country’s India Strategy has been cooperation of upholding the rules based order. The conflict in Ukraine has seen Norway condemn Russia while India has been more circumspect about Moscow’s actions. Has that impacted cooperation in any way?

It has not because we have been able to keep an open and frank discussion about Ukraine. India has been clear about their thinking and we have been very quite clear about the consequences of the war. We are neighbors to Russia. This war wiped out any trust whatsoever in Putin. We have been working since the end of the Cold War to build trust and bridges and it has been wiped in just a few hours. If you had told me a few months ago that Finland and Sweden would join NATO, I would have said it was unrealistic. Now they are in the process of becoming members. This is a primal national security interest for us. The element of fear that we had in the Cold War is back.

The European Union has termed China a “systemic rival”. Norway has had its troubles with Beijing in the past. Do you see China as a threat?

We will not solve the world’s problems without having India and China on board. That is becoming the most important international threat. We are seeing a more assertive China that tries to project its power. That is a challenge but we need to deal with countries to manage problems. Geopolitics has changed but we cannot ignore countries and treat them as a mutual threat. We have to cooperate and deal with each other.

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