Norway’s trade agreement with India of historic significance

A new partnership for prosperity

Jan Christian Vestre

Photo: Norwegian Ministry of Industry and Fisheries
On March 10, Jan Christian Vestre, then minister of trade and industry, signed the historic trade agreement  between India and the countries of the European Free Trade Association.

Norway and the other European Free Trade Association (EFTA) countries have reached a new trade agreement with India. The agreement is historic and will result in zero duty on almost all Norwegian exports to India.

“This is a very important agreement for business. India is the world’s fifth largest economy and represents an enormous market that will provide great export opportunities for Norwegian businesses. After the European Economic Area agreement, this could become one of the most important trade agreements Norway has ever entered into,” said Norwegian  Prime Minister Jonas Gahr Støre.

The agreement was signed in New Delhi on March 10 by, among others, Norway’s Minister of Trade and Industry, Jan Christian Vestre, and India’s Minister of Commerce and Industry, Piyush Goyal.

“Over the past year, we have worked intensely and purposefully to make this happen. Norwegian companies that export to India today face high customs barriers of up to 40% on certain goods.

“With the new agreement, we have secured zero customs duty on almost all Norwegian exports to India. This is a breakthrough that can mean a lot for workplaces all over Norway,” said Vestre.

The trade agreement is part of the government’s export initiative All of Norway Exports. Norway will be the first of the European countries whose businesses will pay no duty on  most goods they export to India. These are advantages that businesses in the  European Union countries and the United Kingdom  currently do not have.

“A good example are Norwegian seafood businesses, which today have to pay a whopping 33% duty in India. With this agreement, Norwegian salmon and mackerel will receive zero tariffs after five years. This gives Norwegian exporters a major competitive advantage compared with competitors in Europe and the rest of the world,” said Vestre.

Human rights and climate

For the first time, India has agreed to include a reference to human rights in a trade agreement. Through the agreement, India also confirms that it will implement the obligations in the Paris Agreement, other ratified multilateral environmental conventions, United Nations International Labour Organization conventions on labor rights, and international conventions on gender equality.

“Human rights are a central part of Norwegian foreign policy. It has therefore been important for Norway to include human rights and international environmental conventions as part of the agreement,” said Støre.

Promoting investments

The trade agreement helps to strengthen cooperation between the two countries and gives Norway a new arena for discussions with India.

“In a troubled world with geopolitical and security political tensions, it is important to link India more closely to the West. The trade agreement also elevates climate ambitions and will ensure workers’ rights and women’s rights,” said Vestre.

The EFTA countries undertake to work for investment promotion and the creation of more jobs in India. A separate office will be established by India to help Norwegian companies operate in the Indian market.

“India is going through a major green and digital transition where Norwegian businesses have a lot to offer in everything from renewable energy, health technology, green mobility, and seafood. The agreement provides great opportunities for trade and investment in a market that is growing at a high pace. Through investments in India, Norwegian companies can contribute to sustainable development, said Vestre.

What the trade agreement means for Norwegian workplaces

With the trade agreement, customs duties are removed on almost all goods and services. Here are some examples:

Yara exports mineral fertilizers from Herøya in Telemark and Glomfjord in Nordland to India, with 1,600 jobs in Norway. The company currently pays up to 8% duty. With the new agreement, the tariff will gradually be reduced to 0%.

Figgjo exports designer porcelain from Sandnes in Rogaland to India, with 73 workplaces in Norway. The company must currently pay 11% duty. With the new trade agreement, the tariff will gradually be reduced to 0%.

Glencore Nikkelverk exports metals for the green transition from Kristiansand in Agder to India, with 500 jobs in Norway. The company currently pays up to 5.5% duty. With the new trade agreement, the tariff will gradually be reduced to 0%.

Polar Quality exports salmon from Bodø in Nordland to India. They have 12 workplaces in Norway. The company currently has to pay 33% duty. With the new trade agreement, the tariff will gradually be reduced to 0%.

Kongsberg Maritime exports batteries and instruments from Kongsberg in Buskerud to India. They have 3,000 jobs in Norway. The company currently has to pay up to 11%. With the new trade agreement, the tarif

This article originally appeared in the May 2024 issue of The Norwegian American.

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