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Finnish companies aim to ramp up their presence in India from next year onwards after the India-European Union (EU) free trade agreement (FTA) is implemented. However, India’s push for domestic manufacturing could pose challenges for some high-end Finnish products that are difficult to manufacture locally, according to Antti Herlevi, Counsellor for Trade and Investments at the Embassy of Finland in New Delhi.
“Starting next year, there will be more and more Finnish companies coming to the Indian market,” Herlevi said.
India and the EU concluded the FTA in January. Both sides have also completed legal scrubbing of the text of the agreement and are on track to sign it by the end of this year. The trade pact is likely to be implemented in the first half of 2027.
The India-EU FTA is a “big step” for European and Finnish companies and will make it easier for them to enter the Indian market, Herlevi said. However, New Delhi’s ‘Make in India’ push could pose a challenge for some Finnish companies, particularly those offering high-end products that are relatively expensive and difficult to manufacture locally.
“Some of the high-end products manufactured in Finland and Europe are difficult to sell in India because they cost a little more. India is price-sensitive. Then manufacturing facilities in Finland are more developed, so it is not easy to start manufacturing in India. At the same time, India is pushing ‘Make in India’, so there are barriers there,” the diplomat said.
The interest among Finnish companies in investing in India has increased following the trade deal, Herlevi said. However, he acknowledged that the cost competitiveness of Finnish products and the difficulty of replicating some sophisticated European manufacturing capabilities in India remain challenges.
Herlevi cited Finnish company Watermaster as an example. The company makes amphibious dredgers using technology that is not yet available in India. While it has entered the Indian market, it continues to manufacture some components in Finland, he said.
He also mentioned that these challenges could be addressed as Finnish companies increasingly partner with Indian firms and explore local manufacturing. Finnish companies such as Nokia and Elematic are already manufacturing in India, he said.
Overall, Finland sees significant potential for expanding bilateral trade with India in sustainability and circular-economy solutions, as well as the maritime, information and communication technology (ICT), and space sectors, Herlevi said.
During Finnish President Alexander Stubb’s visit to India in March, the two countries had set a target of doubling bilateral trade by 2030. India and Finland had bilateral trade of $1.69 billion in 2025-26 (FY26), which included $1.14 billion in imports from the European nation.
“The potential and eagerness of Finnish companies” is particularly strong in sustainability and circular-economy solutions, Herlevi said, adding that Finland also sees opportunities in the maritime and space sectors. Nokia’s presence in ICT is expected to remain an important component of the bilateral economic relationship.
Moreover, Finland could also potentially support Indian exporters in meeting the EU’s sustainability-related requirements, including those under the Carbon Border Adjustment Mechanism (CBAM) and the bloc’s deforestation regulation, Herlevi said.
“I am sure there are Finnish entities that can provide support with that,” he said, adding that it would require further discussions.
Herlevi’s comments come as Indian exporters prepare for a more demanding European market, where environmental and sustainability requirements are increasingly becoming part of market access.
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