Indo-Latvian relations are cordial and are warming up though there is room for improvement on the trade and economic front. Trade and investment is steadily increasing between the two countries. The relations between India and Latvia are friendly and wide ranging. Latvia is envisaged as the nation that occupies a pivotal position as gateway to the opportune Baltic market. Latvian leadership at all levels is keen to strengthen relationship with India and would like to see this relationship grow. Consequent to the Latvia’s accession to the EU, Latvia has been promised EUR 5.7 billion grants over seven years for supporting various projects for which any company in a joint venture with a Latvian company would be eligible. This along with the investment friendly policies of the Latvian government provides great opportunity for Indian firms to make forays in the Latvian market.
Relations between India and Latvia are warm and growing. Latvia seeks an enhanced engagement with India based on recognition of India’s credentials as a democracy and economic power and a perception of common cultural roots. India’s relations with Latvia reach back to the time when it was part of the Soviet Union and had a twinned status with Rajasthan. India recognized Latvia as a sovereign and independent state on September 7, 1991 and established diplomatic relations on February 25, 1992.
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In the 16 years since, there have been a number of visits from Latvia to India, including by the Latvian President in 1997, by Speaker in 2003, Deputy Prime Minister in 2003, Foreign Minister in 2006, Minister for Culture in 2007 and Minister for E-Governance in 2007. From India, the recent high level visits to Latvia include visit of Minister of State for External Affairs Shri Rao Inderjit Singh in October, 2005 and; Minister of State for External Affairs Shri Anand Sharma in March 2007. The last round of Foreign Office Consultations was held in May 2008 in New Delhi. The Latvian Economics Minister accompanied by a business delegation visited India in February, 2010.
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Commensurate with desire for enhanced relations, a number of institutional Agreements/arrangements have been put in place for promoting trade, investments and other relations including (i) Declaration of Principles and Directions of Co-operation signed in September, 1995; (ii) Protocol on Foreign Office Consultations signed in September 1995; (iii) Air Services Agreement signed in October 1997; (iv) Agreement on the Inter- Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation signed on June 27, 2001; (v) Cultural Exchange Programme signed in May 2006 and; (vii) Bilateral Investment Protection Agreement signed in February, 2010.
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The Latvian government has identified India as a country of strategic importance and has concurrently accredited the Latvian Ambassador to Lithuania to New Delhi. The Latvian Government has appointed its Honorary Consuls in Delhi and Chennai. The Latvian Government has also authorised the Hungarian Embassy in Delhi as well as the Consulate of Netherlands in Mumbai to issue visas to Indian nationals for Latvia. The Indian Mission in Stockholm is concurrently accredited to Latvia.
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Latvia envisages itself as a gateway to both the EU and Russian hinterland in view of its location. Latvia looks to India for greater investment and trade and use of its all weather ports. This along with the investment friendly policies of the Latvian government provides great opportunity for Indian firms to make forays in the Latvian market. Potential areas of investment from India include pharmaceuticals and healthcare, telecommunications, IT and software development, heavy engineering biotechnology, timber and pulp. Growth in trade can be driven by export of textiles, gems and jewellery, chemical dyes and pharmaceuticals. As per trade data from India, bilateral trade stood at USD 158.8 million in 2008-2009.
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Indian exports to Latvia include tea, coffee, tools, pharmaceuticals, chemicals, garments, iron & steel etc. Indian imports include chemicals, fertlisers, iron & steel, machinery etc. There are around 42 registered Indian ventures in Latvia which range from production to marketing to software development. Indian investment in Latvia is about USD 1.7 million.
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Under the Cultural Exchange Programme for 2006-08 between the two countries, several ICCR sponsored cultural troupes have performed in Latvia. Latvians have been regular beneficiaries of ITEC training programmes, the courses for foreign diplomats offered by the FSI as well as scholarships provided to Latvian students by ICCR.
Latvia’s total exports to India in US$ – 3.2 million
Main export items were base metals and articles of base metals (59.9%), textiles and textile articles (10.9%) and machinery and mechanical appliances (7.9%).
Latvia’s total imports from India in US$ – 18.3 million
Main import articles items were products of the chemical and allied industries (52.1%), prepared food stuffs (15.8%) and textiles and textile (11.9%).
Latvia’s trade with India in 2006 (USD)
Latvia’s total exports to India in US$ – 8 million
Main export items were base metals and articles of base metals (41.1%), machinery and mechanical appliances (27.7%) and optical instruments, clocks and watches, musical instruments (12.5).
Latvia’s total imports from India in US$ – 27.8 million
Main import items were base metals and articles of base metals (32.2%), products of the chemical and allied industries (29.4%) and prepared foodstuffs (10.4%).
Latvia’s trade with India in 2007 (US$)
Latvia’s total exports to India in US$ – 13.1 million
Main export items were base metals and articles of base metals (44.1%), optical instruments, clocks and watches, musical instruments (20.8%) and machinery and mechanical appliances (15.2%).
Latvia’s total imports from India in US$ – 34.8 million
Main import items were base metals and articles of base metals (32.4%), products of the chemical and allied industries (29.4%) and textiles and textile articles (12.4%).
Latvia’s trade with India in 2008 (US$)
Latvia’s total exports to India in US$ – 10.1 million
Main export items were optical instruments, clocks and watches, musical instruments (35%), machinery and mechanical appliances (25.6%) and base metals and articles of base metals (18.2%).
Latvia’s total imports from India in US$ – 24 million
Main import items were products of the chemical and allied industries (33.8%), textiles and textile articles (24.2%) and prepared foodstuffs (11.9%).
Latvia’s trade with India in 2009 (US$)
Latvia’s total exports to India in US$ – 11 million
Main export items were Base metals and articles of base metals , Machinery and mechanical appliances and Products of the chemical and allied industries.
Latvia’s total imports from India in US$ – 20 million
Main import items were products of the Chemical and allied industries, Textiles and textile articles and Prepared foodstuffs.
Chemical and allied products, foodstuffs and textiles have traditionally been Indian strongholds among our export products to Latvia. As there is a huge demand for these products so India can continue to build on its position to increase its stake in these areas in total Latvian imports.
In recent years there has been increase in demand for oils & fats in Latvia. India’s share has also increased in total Latvian imports.
Export of vegetables is another area where more efforts can be made to increase India’s share as India has lot to offer in this area.
There is a sizeable market for footwear etc in Latvia.
ICT remains the pivotal area where India can collaborate with the Latvian companies. Potential areas of cooperation and trade/investment include:
» Oil and petroleum
» Pharmaceuticals and Healthcare
» Telecommunications
» IT and software development
» Heavy engineering; export of textiles (especially denim)
» Gems and jewellery
» Chemicals and dyes
» Vegetables and fruits
» Leather and leather products
» Third country exports
