The Vice President of India, M Venkaiah Naidu visited the three Baltic nations: Lithuania, Latvia and Estonia from August 17-21, 2019. The visit was unprecedented, it was the first high-level trip from India to these nations. While India has hosted the Lithuanian Vice President, the Latvian President and Prime Minister and the Foreign Minister of Estonia in the past, there had been no reciprocal high-level visits until recently. It was only in 2016 when Minister for Electronics and Information Technology, Mr Ravishankar Prasad visited Estonia. This visit corrected the imbalance between incoming and outgoing heads of states, sending out the message that India recognises the importance of the Baltic nations.
The Baltic nations have come a long way from the history of occupations, finally gaining independence in 1991. Today, they stand as global leaders in artificial intelligence, e-governance and e-security. Coming to the Fourth Industrial Revolution, India sees an organic alliance with these countries, thus, calling for outreach from the Indian side. Furthermore, China is fast increasing its footprint in the Baltic region in the setup of the ‘New Great Game,’ so, India has to step up.
India’s foreign policy for Europe has concentrated only on Western Europe, with the UK, France, Germany, Italy and Spain. The Baltic outreach is a correction of this skewed worldview and a move to strengthen bilateral relations with small nations rather than treating them as subsets of their relationships with other big powers. The Vice President’s visit is expected to open more novel opportunities for cooperation in sectors discussed below.
Bilateral trade between India and Latvia stood at about US$141 million in 2015-16. Major Indian exports were tea, coffee, tools, pharmaceuticals, chemicals, garments, iron and steel. Indian imports majorly composed of chemicals, fertilizers, iron and steel, and machinery. In the case of Estonia, total bilateral trade in 2018-19 was US$172.53 million with machinery and equipment, garments, knitwear, coffee, tea, spices, footwear and pharmaceutical products as major export items. Imports from Estonia were mainly in iron and steel, fertilizers, electrical machinery, paper and paperboard, and paper pulp. Bilateral trade between India and Lithuania stood at about US$ 215 million in 2015-16. Major Indian exports to Lithuania included vegetable saps and extracts, fish fillets and other fish meat, medicaments, footwear, ferroalloys, carpets and rice. Lithuanian exports to India included mineral or chemical fertilizers, potassic, dried leguminous vegetables, wadding of textile materials, nickel waste and scrap, diagnostic or laboratory reagents on backing and machzone-therapy appliances.
There is a scope for growth of textiles, agro-products, gems and jewellery, chemical dyes and pharmaceuticals exports to the Baltic nations. Import of technology would be an important area in the relationship between these nations and India.
As a response to China’s Belt and Road Initiative, India is keenly pushing the International North-South Transport Corridor. This is meant to provide an alternative to the Mediterranean Sea and the Suez Canal as a shorter route for the movement of trade through Central Asia and Russia. A major plus point of the project is that it will help Asian and European countries to transport their cargo at double the speed compared to the Suez Canal. This route can be expanded to connect Baltic, Nordic and Arctic regions and thus enhance connectivity.
Latvia’s ice-free Riga port connects the Baltic region with the rest of Europe, Russia and Central Asia. An agreement on this port can help Indian exports reach European markets.
The European Union is developing the “Rail Baltica” project under the Trans-European Transport Network (TEN-T). This project connects cooperating member states to the Baltic nations with the existing European Rail network. This project aimed at taking the Baltic nations out of the Soviet shadow.
Cyber-Security and IT
Estonia is a world leader in information technology, e-governance, cyber-security and innovation. The software developers from the country developed the code for Skype and Kazaa. The country is home to NATO Cooperative Cyber Defence Centre of Excellence. In 2007, it became the first country to allow online voting in the general elections. High-tech industries now account for 15% of the country’s GDP. The Indian government and businesses are trying to come to terms with the disruption caused by artificial intelligence and big data. Deeper collaboration between Estonian and Indian businesses can reap benefits for both. The experiments with proxy voting and simultaneous polls would call for government-to-government collaboration and best practices from Estonia would come handy. An MoU for Cooperation in e-Governance and emerging digital technologies and Cooperation in Cyber Security has been signed in this regard. Lithuania sees an opportunity in Brexit and is fast emerging as a hub in Fintech. With the Fourth Industrial revolution, these bilateral relationships will become vital for India.
Science & Technology
Lithuania can be a strong technology partner in agro-processing and pharma, with expertise in dairy and cheese production. Agri-tech can help realise the vision of improving agricultural productivity hence, doubling farmer incomes by 2022 for India. It can help fuel growth in India’s food processing industry which is at a nascent stage with only 5% of the total production being processed. Laser technology has emerged as a strategic trade item from Lithuania to India, especially sought after by Indian universities and research centres.
Estonia, Latvia and Lithuania have very high energy dependence on Russian gas pipelines, owing to their Soviet past. The European Union Climate and Energy Package has helped the Baltic Nations improve the energy security stance by increasing production from renewable sources of energy. Despite its shale oil reserves, Estonia is transitioning away from fossil fuels to biofuels, photovoltaics (PV) and wind. Estonia was the first European country to adopt electric and hybrid cars. It hosts big solar parks with a total capacity of 3GWh. The Baltic nation is planning to plunge into wind power, despite the shale reserves fulfilling 85% of the energy needs. Lithuania too is venturing into the renewable energy space through wind power and biomass (biogas and waste). The country aims to increase the share of renewables in its electricity mix to 23% by 2023.
Given the speed with which these nations are diversifying their energy needs, they can be useful partners in the International Solar Alliance started in Paris by PM Modi. They could play a vital role in enabling the rapid deployment of solar energy globally and facilitating technology transfer. Given high import dependency for its energy needs, India can facilitate study tours for officials for the transfer of best practices from these countries.
Education & Employment
There has been an increase in the number of outbound students to the Baltic Nations. According to data from the Indian embassy, 100 Indian students are currently studying in Latvia, 211 in Estonia and 600 in Lithuania. The main attraction is affordable education without compromising on the quality. Indian Vice President also lauded the e-residency scheme launched in 2014 by Estonia as “a launchpad for Indians in the Baltic, Nordic and European markets.”
Despite encouraging numbers, the mobility of students and the workforce is still below potential. Education fairs and awareness programmes are essential to tap the market.
Indian companies such as Indorama, Wipro, Tata Consultancy Services, Larsen & Toubro and Bharat Forge have made investments in the region. Indian companies are being wooed by promoting this region as a cost-effective and productive destination with high research capabilities. An investment of US$200 million has been made by Indorama, a Lohia Group company in the Klaipeda Economic Zone in Lithuania on a plant to manufacture plastic resin. The Indian embassy and Assocham carried out ‘Make in India: Roadshow’ to promote India as an exciting investment location.
India and Baltic regions have common linguistic roots and cultural similarities. For instance, Sanskrit and Lithuanian have around 10,000 words in common. The study of Indian languages (mainly Hindi and Sanskrit) is carried in Vilnius University at the Centre of Indian Studies, under the Department of Oriental Studies. The University of Tartu in Estonia began teaching Sanskrit in 1837. The Baltic nations have a great interest in Yoga and Ayurveda. The University of Latvia in collaboration with the Arya Vaidya Pharmacy, Coimbatore has been conducting a 3-month Diploma course in Introduction to Ayurveda since February 2015.
Cooperation in Multilateral Forums
The outreach to Baltic nations has helped India secure a non-permanent seat in the United Nations Security Council from 2021-22. These nations have also supported India as a permanent member in an enlarged and reformed UNSC. The support from small nations puts pressure on bigger nations to pay attention to the agenda of reforms. Besides, Estonia would have a non-permanent seat in the UNSC beginning from 2020. India and Estonia can support each other in the UNSC if bilateral relations see an upward trend. A seasoned diplomat noted that these nations can prove to be good interlocutors for India vis-a-vis the European Union. A bone of contention between India and the European Union has been the Comprehensive Bilateral Trade and Investment Agreement (BTIA), and Baltic nations can play a constructive role in negotiating that.
Given the vibrancy of the partnership, it can be safely concluded that only sky’s the limit. Governmental support, availability of skilled labour, ease of doing business and a conducive environment are essential to realise the objectives of the partnership. Godspeed.
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