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Feb 15, 2016, 09.12 PM | Source: CNBC-TV18

Focus shifting from China to India: Swedish PM

In an interview with CNBC-TV18's Shereen Bhan, Stefan Lofven, Prime Minister of Sweden, talked about his view of the Indian economy, his expectations of what the Sweden-India economic partnership could look like and how Sweden's own economy is looking like back home, among other things.

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Focus shifting from China to India: Swedish PM

In an interview with CNBC-TV18's Shereen Bhan, Stefan Lofven, Prime Minister of Sweden, talked about his view of the Indian economy, his expectations of what the Sweden-India economic partnership could look like and how Sweden's own economy is looking like back home, among other things.

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In an interview with CNBC-TV18's Shereen Bhan, Stefan Lofven, Prime Minister of Sweden, talked about his view of the Indian economy, his expectations of what the Sweden-India economic partnership could look like and how Sweden's own economy is looking like back home, among other things.

Lofven was in the country to attend the Make in India summit organized by the central government.

Below is the verbatim transcript of Stefan Lofven's interview with Shereen Bhan on CNBC-TV18.

Q: While you were addressing the audience and the Prime Minister, Narendra Modi, you said that the world's focus has shifted away from China to India and all eyes are on India today. What has changed about India to your mind to get this kind of attention?

A: India is going through a dramatic development in its economy. Growing, India will be the largest country in the world in few years. It is the world's largest democracy so it is a development that is attracting a lot of the world's view.

Q: What that means for Sweden in specific because you are here with the largest business delegation. Swedish companies have been operating in India for a while now, in fact we have about 1,200 companies registered in India, but if I were to look at the numbers as far as exports and imports are concerned or bilateral trade, it is still subpar, there is a lot of promise and potential but we have been able to achieve that, in fact the numbers for this year are lower than what we saw in FY12 for instance. Why do you see that gap and why do you believe that we haven't been able to capitalise on the full potential yet?

A: As you point out, Swedish companies have been present here for many years. Ericson since 1903 and Swedish companies employ some 150,000-160,000 people in India. Let's say if a company put up a plant in India, so they do export but it is not necessarily only to Sweden of course, so they export in this region but they export worldwide, so that is how the global economy function.

I see the possibility of increase in trade between India and Sweden of course but the most important thing now is that the Indian economy is growing and we want to be part of that and we do know that we can deliver very good services and products. So we have a huge possibility.

Q: In terms of the government to government partnership or government to government participation, when you talk about Sweden wanting to participate in India's transformation, what is that going to mean exactly. In your conversation with the prime minister for instance what can we expect now on the bilateral front. What independent companies do, that will depend on their strategy, not just for India but for the world, so that's aside, but on government to government basis what can we expect in terms of outcomes?

A: Both the governments of course want to support this cooperation between our companies, the enterprises because we both know that we need manufacturing of goods and services in order to have a good welfare also in our countries. So I think the support but also the view that we have so many areas in which we can cooperate, let's take Smart Cities for example, the environmental change is a risk for the whole world. We need to address it. When two governments, when two countries cooperate with a focus on creating a much better environment for our kids and our youth - that is an important cooperation.

Q: And that's a speciality of Sweden, so have you identified the cities that you would like to partner with. We have already seen France and US put down the cities that they will partner with the Indian government to build Smart Cities, but have you identified cities that you would like to partner?

A: That is up to the Indian society and the companies that are present here and all the, also the authorities, Swedish authorities that can be of assistance, that need to be addressed to be detailed, to be decided but Smart Cities, the green technology in general, infrastructure, water, all these things that means a lot to people in their daily life, we can do a lot to improve.

Q: Coming back to bilateral dialogue and the conversation that you have had with the PM, the defence sector is seen as the big area of opportunity. I know that SAAB has expressed its interest in being able to participate much more in India's defence space perhaps even try and take the grip in project forward here in India if the Indian government were to be open to that idea. Has there been any conversation or any specific project within the defence sector for instance?

A: We identify that the defence sector is important, it is important to India. It's up to India to decide what they want, how they want to develop its defence forces but we are ready both SAAB as a company and as Swedish government, we are ready to go through with that, to develop those thoughts and I know that the grip in projects, we have a fantastic fighter aircraft, it's very competitive, so whatever we can do to handle that in a good way, we want to do that.

Q: Has there been any conversation in this particular visit on this specific issue at all?

A: Not in detail, of course not but we have stated clearly that we are ready. So if India decides to do so, we are ready and we are there.

Q: Let me ask you about what you are seeing as far as the global economic context is concerned and in fact I want to pick up on a quote and I think you said this a couple of months ago that Sweden is facing some of the biggest challenges that it has seen in modern times. There is of course crisis in schools, higher unemployment and there is refugee crisis. You have been forced to close your borders and you do that in November of last year given the kind of influx that we saw on the immigrant front. How challenging is the economic scenario for you particularly in Sweden and as well as the rest of Europe. What does that mean than as far as global outlook is concerned?

A: Of course it is a huge challenge. This migration crisis is the biggest we have seen since the Second World War. Sixty million people are refugees either within the country or outside the countries. It is a huge human tragedy that we are witnessing right now and of course many people also come to Sweden and we had to take measures to decrease the number.

We haven't closed the borders but we did decrease dramatically because it was absolutely necessary to do that but my point is that the European Union as a whole European Union with 28 member countries, some 500 million inhabitants, we could cope with this challenge. So my focus is now to make sure that 28 member countries, all the countries take their responsibilities.

Q: But do you feel confident and optimistic of that happening?

A: It is going too slow but we will discuss it in next week again in March and the commission, I believe, is preparing some proposals. We need to act now and now we need to act also in cooperation with Turkey, Lebanon, Jordan and Syria because the first thing we want to do is to prevent people from having to take this huge risks as they are doing but there will be people also coming to Europe of course and when that happens, we need to cooperate all the 28 member countries.

Q: Are you going to be forced to change your position as far as allowing immigrants in or your action on the immigration policy is concerned, given the fact that it is probably costing you politically within Sweden?

A: We have changed our policy, right now changing the policy. So we have introduced ID controls for example at our borders and we are changing the policy right now to have the same standard that the European Union minimum standards. We are of course respecting the right to seek asylum, that is human right, it is a global right. So we will respect that.

Q: What does all this mean as far as this Swedish economy is concerned because if I were to look at the numbers, the gross domestic product (GDP) growth in 2015 about 3.6 percent the expectation as per the EU commission is that it will go down to about 3.6 percent in 2016 and at 2.9 percent in 2017, unemployment numbers are high expected to be about 6.9 percent in 2016, what could be the drivers now as far as your economic policies are concerned?

A: First it is important to see that we do have a quite the growth, it is not bad.

Q: In comparison to the rest of Europe, yes.

A: Exactly. What is happening right now is that unemployment is going down. In total, for youth, for people coming from other countries, the unemployment is going down, the employment is going up. So we need to use this momentum right now to invest even more.

Yes, there was a situation that we couldn’t cope with that because of the increase of immigrants was so dramatic, it happened over three months and that we need to handle. But in general, of course it is good for country also when people come to your country, we are happy that the country is growing, it is a challenge we need to build much more, we need to increase our housing, we need to do much more on infrastructure, on schools.

However, at the same time it is a positive challenge that we are growing, more kids, more young people coming, people with experiences and knowledge from other countries, which we need in global economy. However, we couldn’t handle that dramatic situation and that we have dealt with, we have taken the decision that was necessary and now we will make sure that people stay in Sweden that they are given the best possibilities to take part of the building of our society.

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