India-Sweden bilateral trade can double in 5 years if India-EU FTA, India's green transition plans materialise

India-Sweden bilateral trade could double in five years if India-EU Free Trade Agreement (FTA) materializes and India sticks to the country’s green transition plans, Sven Ostberg, Consul General of Sweden in Mumbai has said.

In an interaction with Fortune India, Ostberg said negotiations on the India–EU FTA have accelerated significantly over the past year. “Twelve chapters have been concluded, and both sides are working intensively to close the remaining eight. The aim is to finalize the agreement by the end of 2025, with a formal signing expected at the India–EU Summit in January 2026”, he said.

According to Ostberg, India-Sweden bilateral trade grew from about $2.8 billion in 2016 to nearly $7 billion in 2024, but is modest compared to the potential of both economies. Swedish FDI in India stands at around $2.5 billion, making Sweden the 21st largest investor.

“With the FTA and India’s green transition, trade could easily double again within five years. Key growth drivers will include green technologies (renewable energy, EV infrastructure, and hydrogen), smart manufacturing and automation, digital services and cyber security, healthcare and life sciences. If these sectors scale as expected, bilateral trade could cross $15 billion by 2030, with FDI flows rising significantly as Swedish firms localize production and R&D in India”, he said.

Over 280 Swedish companies operate in India, employing more than 220,000 people directly. While sectors like automotive, telecom, and retail are well represented, there is significant untapped potential in green hydrogen, advanced battery recycling, cyber security, and healthtech, Ostberg said. “Swedish SMEs in industrial automation, chemical process technology, and life sciences are also looking to expand their footprint. Digital infrastructure and AI-driven manufacturing analytics are emerging areas where Swedish expertise can complement India’s scale and talent”, he pointed out.

According to him, the recent MoU between Maharashtra government and Swedish companies Candela and Echandia, Garden Reach Shipbuilders & Engineers (GRSE) and Sweden’s Berg Propulsion  are  strategic steps toward modernizing India’s maritime capabilities.

“These MoUs are significant because they go beyond investment—they represent innovation and sustainability in maritime transport. Candela Technology AB will work with the Maharashtra government to introduce electric hydrofoil passenger vessels, enabling water taxi services between Mumbai and Navi Mumbai Airport. This will ease road congestion and reduce emissions, creating a cleaner and faster mode of urban transport. Similarly, Echandia Marine AB is partnering to develop marine battery energy systems for tugboats, cutting carbon emissions by up to 30%. These projects align perfectly with Maharashtra’s Blue Economy vision and India’s climate goals. For Sweden, it’s an opportunity to showcase world-leading clean-tech solutions in a market that is scaling rapidly. For India, it means modernizing its maritime ecosystem with sustainable technologies—an area where Swedish expertise is unmatched”, he explained.

Ostberg also said that while India-Sweden relationship is strong, a few gaps remain. “Many Swedish businesses and the public still lack nuanced knowledge about India’s market potential, leading to cautious investment decisions. Complex compliance requirements and IP protection concerns in India can deter Swedish SMEs”, he said.