The Arctic Axis: Why India–Nordic Ties Matter in a Shifting Global Order

 As great power rivalries intensify from the Arctic to West Asia, India and the Nordic countries are deepening cooperation across trade, technology, and geopolitics.

PM Modi is set to visit Oslo, Norway, for the third India-Nordic Summit in May 2026. Initiated in 2018, in Stockholm, Sweden, this engagement has, over the years, focused on innovation, technology, climate change, renewable energy, the blue economy, and maritime cooperation.

Illustration by The Geostrata

This year, the summit comes amid the crisis in West Asia, the straining of the transatlantic ties and the declining rules-based world order with major powers disregarding international laws and the spirit of liberalism and globalisation. The summit will bring together the leaders of the "Nordic 5", including Denmark, Finland, Iceland, Norway, and Sweden.

TRADE, INVESTMENT, AND THE NEW ECONOMIC ARCHITECTURE

India has signed the landmark India-EFTA Trade and Economic Partnership Agreement (TEPA) in 2024 with Switzerland, Norway, Iceland, and Liechtenstein, with a target of $100 billion in EFTA investments over 15 years, aiming to create 1 million direct jobs. The deal features preferential access to Indian exporters for textiles, engineering goods, and processed foods, while EFTA gets better access for pharmaceuticals, machinery, and specialty foods. The trade ties are further strengthened after the India-EU FTA, also known as the "mother of all deals", concluded in January 2026 and is expected to come into force by early 2027.

The deal provides preferential access to India for 97% of tariff lines (covering 99.5% of trade value), including significant tariff elimination on labor-intensive sectors like textiles, leather, footwear, and marine products. 

With a market of 1.4 billion people and the roll out of significant economic reforms, including the recent GST overhaul and simplified tax structure, India offers a favourable climate for Nordic investments, particularly the sovereign wealth funds. Norway hosts the world’s largest sovereign wealth fund, valued at over $2 trillion. India is among the region’s key trading partners, and its exports have grown over 39% from 2018-19 to 2022-23. Notably, exports to Finland and Norway have increased by over 100% and 80%, respectively.

The Nordic region has also been witnessing significant decline and aging, with over 21% of the population aged above 65. India’s young and skilled talent pool can play a crucial role in addressing these challenges, particularly in sectors such as healthcare, information technology, engineering and manufacturing, renewable energy, and maritime industries.

GREEN PARTNERSHIPS: CLIMATE, ENERGY, AND INNOVATION

Clean energy is another major dimension of the India-Nordic partnership. India is actively engaging with Denmark, a leading power in wind energy, through the renewed Memorandum of Understanding (2025-2030), supporting India's target of achieving net-zero emissions by 2070.

This MoU is a continuation of the earlier one signed in 2020. The Green Strategic Partnership, formed in 2020, aims to strengthen the cooperation on energy and climate change, environment/water and circular economy, sustainable urban development including smart cities, and business, trade and shipping. Similarly, Sweden’s key initiatives like the Leadership Group for Industry Transition (LeadIT) and the India-Sweden Innovations Accelerator (ISIA) have fostered over 250 projects in renewable energy, solar pumps, and waste-to-value systems.

The India-Nordic Dialogue for Investments in Climate Action (INDICA) was launched in June 2025 as a platform to foster, facilitate, and accelerate green partnerships and investments between India and Nordic nations. It connects Nordic investors with Indian policymakers to advance sectors like renewable energy, electric mobility, and waste management.

WEST ASIA, ENERGY SHOCKS, AND STRATEGIC REALIGNMENTS

While trade and economic cooperation remains the main agenda of the summit, the ongoing crisis in West Asia is likely to overshadow several discussions. The war has severely impacted the global economy, especially with the attacks on key oil sites in the Gulf and volatile security conditions in the Strait of Hormuz, where 20% of the world's energy flows out. While several nations worked to release their strategic reserves, this proves to be a temporary patchwork.

Even the International Energy Agency’s commitment to release 300-400 million barrels of oil would only meet a fraction of the daily demand of 20 billion barrels of oil that flows through the Strait. Consequently, the US had temporarily eased sanctions on oil imports from Russia and Iran. However, Europe opposed this move, arguing that it could further strengthen the Russian economy and thereby boost its war machine.

As the war in Europe continues to prolong without a clear resolution at sight, these nations increasingly look to India as a trusted partner in engaging Moscow to help minimise the humanitarian and economic costs of the war.

TRANSATLANTIC STRAINS AND THE SEARCH FOR STRATEGIC AUTONOMY

The war in West Asia also severely weakened the Transatlantic strategic partnership. It is crucial to understand that all the Nordic nations are members of NATO, and President Trump has threatened to withdraw from the alliance following Europe's distance from Washington’s war in Iran. The Trump administration, since the very beginning, has been critical of Europe and NATO, and the US-Iran war only worsened it.

Additionally, President Trump's expansive ambitions to acquire Greenland for strategic reasons, criticising Denmark's governance of the territory as  “Poorly run, piece of ice” and the equally hostile response from the NATO allies through Operation Arctic Endurance, under the leadership of Denmark, to reinforce Arctic security and assert Danish sovereignty, has significantly weakened the Transatlantic trust.

Washington’s sweeping tariffs and arm-twisting tactics in its trade deals further pushed India and Nordic nations closer. Prior to the recent India-US trade agreement that reduced tariff rate to 18%, the US had imposed 50% tariffs on major Indian exports.

Likewise, it imposed 15% tariffs on EU exports. These unilateral measures, undermining the free-trade order, have further reinforced the convergence between India and the Nordic countries.

The Trump administration's Donroe doctrine – a renewed manifestation of the Monroe Doctrine to assert the American hegemony in the Western Hemisphere and the reduced strategic weight of Europe – reflected in recent policy releases including the National Security Strategy, further reflects the challenging times in Washington’s relations with Europe. In this scenario Europe is actively seeking to reduce its dependence on the US by fostering ties with other major powers, including India, Canada, Japan, and Latin America.  

CHINA IN THE ARTIC: DE-RISKING AND STRATEGIC ALTERNATIVES

China, on the other hand, has been rapidly expanding its footprint in the Arctic region. Its polar silk road includes the strategic development of shipping lanes and infrastructure in the Arctic, as an extension of its flagship Belt and Road Initiative (BRI). China ranks as one of the top trading partners for many individual Nordic countries, these nations are dependent on crucial imports dominated by high-value items, including electrical equipment, machinery, pharmaceuticals, vehicles, and ships.

Beijing aims to secure crucial mineral resources in the region, heavily investing in shipping, trade routes, and processing facilities across the world and dominating 90% of rare earth refining globally. In its 2018 white paper, China officially declared itself a "near-Arctic state," arguing that its proximity to the Arctic Circle justifies its participation in regional affairs, research, and resource extraction.

The Nordic nations are wary of the risks associated with growing economic entanglement with China and are focusing on developing domestic rare earth deposits like the large Fen complex in Norway, and resisting Chinese investments in critical infrastructure projects in Greenland, Norwegian Kirkenes, etc. In this context, these countries view India as a reliable partner in their efforts to de-risk from Beijing.

Russia remains the most significant stakeholder in the Arctic region, backed by its robust ice-breaker infrastructure, strategic and scientific assets, control over the Northern Sea Route, etc.

With rapidly retreating glaciers in the Arctic owing to global warming and climate change, this route is of huge significance for India and the world, especially after the recent crisis in the Middle East which exposed the vulnerabilities in the existing trade corridors in the Persian Gulf, with maritime blockades by both the US and Iran in the Strait of Hormuz.

Building on the lines of the RELOS Pact signed with Moscow which became operational on January 12, 2026, facilitating access to key Russian Arctic ports, New Delhi should also deepen engagement with Nordic countries to develop a broader strategic partnership in the Arctic for sustained engagement in logistics, trade, critical mineral exploration and clean energy. 

INDIA AS A STABILISING POWER IN A COMPETITIVE ARTIC

In December 2023, India flagged off its first-ever winter expedition to the Himadri station, enabling studies during the polar night and atmospheric and oceanic measurements to understand the impact of Arctic ice melt on the Indian monsoon. In 2022, New Delhi unveiled its Arctic policy titled 'India and the Arctic: building a partnership for sustainable development’.

This policy is based on six pillars, including the strengthening of India's scientific research and cooperation, climate and environmental protection, economic and human development, transportation and connectivity, governance and international cooperation, and national capacity building in the Arctic region. 

The upcoming India-Nordic summit can play a crucial role in India's arctic policy. It also aligns with other broader tenets in India's foreign policy goals.

For instance, at the first summit, the Nordic nations supported India’s membership in the Nuclear Suppliers Group (NSG) and its push for a permanent seat in the UN Security Council.

With the region transforming into a potential theatre of geopolitical rivalry among global powers, New Delhi seeks to reinforce its presence as a strategic power and a stabilising factor in the region. This involves a sustained focus on strengthening political ties, deepening strategic partnerships, expanding economic engagement, and advancing technological cooperation.

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BY HARSHITHA

TEAM GEOSTRATA

info@thegeostrata.com