New Delhi: Companies in Iceland are eager to deepen ties with Indian firms. They see opportunities in sectors like fisheries, clean energy, and innovation, especially with the new free trade agreement between India and the European Free Trade Association (EFTA). This agreement took effect on October 1, 2025, paving the way for enhanced business collaborations.
The agreement, signed on March 10, 2024, will help EFTA countries invest $100 billion in India over 15 years. This investment is expected to create around one million jobs. India’s Ambassador to Iceland, R. Ravindra, mentioned that an Icelandic firm has committed to invest $30 million in a fishery project in Maharashtra, which will provide 800 to 1,000 jobs in Aurangabad.
Ravindra noted that there are significant opportunities for Indian exporters in Iceland, particularly in textiles, coffee, and pharmaceuticals. He remarked, “Icelandic companies can scale up by tapping into the Indian market, especially in clean energy, geothermal projects, and biotechnology.”
Trade data shows that India’s exports to Iceland reached $66 million in 2024-25, while imports from Iceland totaled $11 million. Thanks to the free trade agreement, Indian agricultural products can now enter Iceland duty-free, a substantial benefit. Previously, some goods faced import duties as high as 220%. This shift is likely to open new doors for Indian exporters in Iceland’s high-income market, particularly in the agriculture sector.
For instance, Iceland’s imports of rice from India stood at just $0.6 million, while total global imports were $29.1 million. Countries such as Germany and Thailand dominate this market, but the removal of tariffs could enable Indian exporters to gain ground.
The trade potential extends beyond rice. India has opportunities in ornamental fish and frozen seafood, which previously faced tariffs of up to 10%. Iceland’s global imports in this sector amount to about $73 million, with India currently contributing only $1 million. If Indian exporters can meet quality standards, they might capture a larger market share.
Additionally, raw cane or beet sugar imports are another area where India could expand. Iceland’s total imports in this category are around $26.4 million, yet India currently has minimal presence. The removal of a 55% tariff might encourage Indian sugar exports.
Fresh and processed vegetables have similar potential. Iceland imports $44.6 million worth globally, but India’s contribution is merely $0.1 million. Items like dried onions and legumes could find a market if duties on them, which go up to 30%, are eliminated.
A notable area for growth is high-value processed foods, such as sauces. Iceland imports $91.1 million in this category, but Indian imports are very limited. With duty-free access, Indian processed food exporters could become more competitive in this market.
The overall outlook is positive. Companies from both countries are becoming aware of the advantages the free trade agreement provides. As India looks to boost its economy, this partnership with Iceland may lead to significant job creation and investment opportunities.
For more details on the effects of trade agreements on economic growth, you can refer to resources from the World Trade Organization.
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INDIA AND THE EFTA BLOC, ICELAND, INDIA ICELAND TRADE, ICELAND FIRMS KEEN TO INCREASE COLLABORATION IN FISHERIES, CLEAN ENERGY WITH INDIA: ENVOY
