We have a lot to strive for and the relationship between Latvia and India will continue to develop and bring mutual benefits,” said H.E. Artis BĒRTULIS, Ambassador of Latvia in an interview with The Diplomatist. Ambassador Artis spoke about his experiences in India, while offering insight into the strong foundation of cultural ties between the two countries
Q. How would you evaluate the development of bilateral relations between Latvia and India?
Latvia-India relations are solid, growing and creative. Even though Latvia was founded in 1918 and India in 1947, we established our diplomatic relations only on December 7, 1991. When Latvian statehood was established, India, as we know it today, did not exist, but when India gained its independence, Latvia was occupied by the Soviet Union.
We share a rather rich exchange also before 1991. In the 1920s-1930s Latvia had Honorary Consuls in Madras and Bombay; as well as there was a Latvian evangelic Lutheran mission led by Ms Anna Irbe near Coimbatore, in Karunagrapuri village. Interesting, that atop of the Nilgiris Mountains in Tamil Nadu there is also a star-class hotel called “The Riga Residency”.
Several works of the celebrated Indian writer Rabindranath Tagore have been translated and published into the Latvian language, including the novel “The Home and the World” (Ghare Baire, 1916), and many other works and poems. In total, we have 49 books on and about this great writer, which is the biggest translation collection after the biggest languages (English, German, Russian and Spanish).
Regaining independence in 1991 provided the opportunity to seek cooperation and develop bilateral relations, which have been positive and constructive ever since.
Opening our embassy to India in 2014 was a new milestone in our diplomatic relations. The bilateral dynamics continue to increase, including through various high-level visits and business delegations.
Q. You are the second resident Ambassador of Latvia to India. What vision you hold and cooperation you seek to deliver, for further strengthening these ties?
I am privileged to be the second Ambassador of Latvia to India, as it also symbolically coincides with several important anniversaries for both of our countries.
Let me mention, that now Latvia commemorates the centenary of its statehood, as well as other important anniversaries for Latvia’s political and economic development, like 15 years of the EU and NATO Membership and 5 years of the Euro currency in Latvia.
2019 marks also such unique and Latvia and India unifying anniversaries, as the 30th anniversary of the Baltic Way, a unique non-violence movement to protest the Soviet occupation of the Baltic countries, and the 150th anniversary of Mahatma Gandhi, India’s political, spiritual and non-violent resistance leader.
We are proud that during the visit of the Vice President of India to Latvia this August a statue of Mahatma Gandhi was installed in the National Library of Latvia, or symbolically called the ‘castle of light’, as it captures the human knowledge and wisdom, which universally binds us all.
For me, it is an inspiring setting to continue building and expanding ties between our countries across all sectors and levels. Latvia is a part of the evolutionary European project – the European Union. The EU is the biggest trade, investments and development partner of India. Latvia is a part of the EU Single Market and the EU Free Trade agreements’ space.
The size of our countries differ greatly, though we are connected through our shared beliefs in democratic values and respect to human rights, justice, rule of law and joint interests to maintain the rules-based international order.
Q. The recent visit by Indian Vice President to the Baltic States has certainly added to the structure of Indo-Baltic engagement. What would you consider the most significant aspect of this visit?
The visit of the Honourable Vice President of India Mr Naidu was historic and symbolic and first such a high-level Indian official visit to Latvia.
Not only it provided for an important political gesture and interaction between our countries at the highest level, but also gave an important signal to the Latvian and Indian business communities to seek exploring the considerable potential for the economic cooperation in various sectors, including the ICT, R&D, logistics, high value tourism, cinema, as well as in trade.
I am glad to note that the Vice President was accompanied by a considerable business delegation, led by the ASSOCHAM and that few memoranda of understandings were concluded between the business organisations of both countries. I have no doubt that Latvian and Indian entrepreneurs are ready to consider new forms of cooperation for mutual benefit.
Let me also point out that the visit definitely strengthened the Latvian-Indian cultural exchange and a common structured approach was agreed upon by concluding the cultural cooperation program for the years 2019-2021.
Q. What is the scope of engagement in new-age technologies? Any other prospects for future economic cooperation between Latvia and India?
There is an immense scope of collaboration, as we proceed to the era of digitalization and artificial intelligence. As well as in Research and Development, or in technology transfers.
The ICT sector capacity of Latvia is growing rapidly. It’s the third-largest export sector of Latvia (after transport/logistics and travel services) and accounts for around 5% of Latvia’s GDP.
Latvia is proud of Artificial Intelligence solutions (language technologies and image processing); E-Government solutions; 5G initiatives; Datacentres and data transmission technologies, i.e.
Several global IT companies have chosen Latvia either as their R&D centre or as a back office. Companies such as Tieto, Accenture, and Exigen today hold the largest market and revenue shares in the sector. Accenture, Cognizant, Deloitte employ also many experts from India. The Latvian University cooperates with Microsoft that in 2017 has opened its innovation centre for the entire Nordic-Baltic region (cloud technologies, which is a part of the Microsoft Ecosystem).
The largest solar energy park in the region has been inaugurated recently.
Transit and Logistics: Latvia finds itself situated in a position that makes it a logistical magnet and a perfect place to organize logistics – among the markets of the European Union, CIS and Asia. Multimodal transport corridors are passing through the territory of Latvia from East to West and from North to South. In other words, Latvia can provide for Indian traders and distributers the shortest and safe route between the EU and the CIS markets.
Niche tourism: With its extensive offer in culture, architecture, food, shopping, recreation, beach and nature experiences Latvia can be the next great destination for Indians who are looking for new horizons and fresh air. Did you know, that Latvia is among the greenest countries in Europe, and around 50% of Latvia’s territory is forest area and that Latvia’s Baltic Sea coastline is 500 km long with clean and pleasantly uncrowded beaches? Even in the Capital Riga, we can be proud of having very low levels of air and sound pollution.
Cinema co-production: We invite the Indian producers to take advantage of possibilities provided to international film productions by the National Film Centre of Latvia (rebates offers up to 25%), as well as of the beautiful and impressive settings for filming, like the Rundāle Palace, a unique treasure of Baroque and Rococo architecture, designed by a famous Italian architect Francesco Bartolomeo Rastrelli in the 18th century.
Q. Kindly shed some light on the many investment opportunities that your country has to offer.
Prosperity of the economy
Latvia’s economy is historically at its highest point. In 2018 the GDP accounted for EUR 29.5 billion; GDP per capita (by current prices, 2018) was EUR 15 328 (18 102 USD, compared with 15 732 USD in 2017); and the growth of GDP: 4,8% (2018), 2,9% (2019 Forecast; slower due to the overall global economic slowdown).
Liberal and streamlined economic policy framework
Latvia consistently pursues liberal economic policies and welcomes investments that foster principles and benefits associated with free markets.
World Bank’s report Doing Business 2019 ranks Latvia as 19th out of 190 countries for ease of doing business.
The Latvian government and local authorities continue to work on streamlining procedures for doing business in Latvia. For example, procedures for incorporating a company can be completed in a single day.
The government has developed the POLARIS Process, a national strategy enabling communication and cooperation among investment stakeholders (industry, government, academics).
Key investment issues are regularly raised with the government through the Foreign Investors’ Council in Latvia.
Accessibility to Large Markets
Latvia has a unique geographical and cultural position, providing a strategic location for business operations targeting developed economies of the EU and emerging markets of eastern neighbours. Latvia is a natural gateway between the Scandinavia, the EU and Asia (especially Russia/CIS).
As a member of the EU, Latvia operates under common, pan-European legislation. The EU membership, as well as Latvia being a member of the Schengen and the Eurozone area, allows free movement of goods, services, capital and labor. There is also the availability of significant EU Structural Funds.
Advanced transport infrastructure
Located on the coast of the Baltic Sea, Latvia has three major ice-free international ports (Riga, Liepaja and Ventspils), acting also as free economic zones, and that are closely linked into the country’s land-based infrastructure, including an extensive rail, road and pipeline system.
Riga International Airport is the largest airport in the Baltics and in 2018 it served 7.06 million passengers breaking the annual passenger record (+16% y-o-y growth) and handled 28 169 tonnes of cargo. Riga International Airport serves almost half (47%) of all Baltic capital passengers. The airport currently serves 19 airlines, including Latvia’s national airline airBaltic, which ensures direct travel from Riga to almost 80 destinations in the winter season and around 100 destinations in the summer season.
Latvia has 5 free economic zones (Riga, Ventspils, Liepaja, Rezekne and Latgale) with appealing tax incentives.
Tax rates: From 1 January 2018 Latvia has a new corporate income tax (CIT) under which retained earnings are exempt from CIT and only distributions are taxed. The CIT rate on gross profit distribution is 20%. As of 1 January 2018 Latvia also has a progressive personal income tax (PIT). Income below EUR 20 004 a year is subject to PIT at the rate of 20%. Income from EUR 20 004 to EUR 55 000 a year is subject to PIT at the rate of 23%. The part of income exceeding EUR 55 000 a year is subject to PIT at the rate of 31.4%. PIT for income from capital and capital gains is 20%.
Latvia’s labour costs are very competitive, especially compared to those in older EU-member countries (4th lowest labour costs per hour in EU. Source: Eurostat).
At the same time, Latvia has a talented labor pool. Educated (one of the highest rates of university attendance in the world, ~75% enrolment ratio) and multilingual (Latvian, English, Russian, Scandinavian languages, German). In addition, there is a large proportion of international students (over 2000 Indian students in fields like ICT, civil engineering, management, services) in Latvian universities, which can be seen as future labour.
Dynamic and rapidly growing start-up environment
Latvian start-up infrastructure consists of 400+ registered start-ups, especially in high technologies, a pool of institutional investors and business angels, a diverse range of modern co-working spaces and dozens of business incubators, fuelled by the government, academia and private individuals.
Moreover, a unique Start-up Law has been passed and Start-up Visa (officially – temporary residence permit) has been created in order to make the Latvian start-up ecosystem even more vibrant and productive.
Investment and Development Agency of Latvia (LIAA) serves as a “one-stop-shop” for all local and foreign investors and startups.
Q. What is the volume of Indian investments in Latvia?
It is low but growing. At the end of 2018, direct accumulated investments of India in Latvia were EUR 2 million. In turn, direct accumulated investments of Latvia in India were not registered (or their amount was less than 1 million EUR).
As of July 2019, India ranked 50th by investments into the equity of Latvian enterprises with total stocks of EUR 1.9 million and 272 companies (at the end of 2018 India ranked 52nd by investments into the equity of Latvian enterprises with total stocks of EUR 1.7 million and 244 companies).
Biggest Indian investors in Latvia are in fields: trade and services, pharma, wood products, public catering, cargo, real estate.
In 2018, the total turnover of Latvian trade in goods and services with India was EUR 125.1 million, which ranks India 30th trade partner of Latvia. (Trade balance was negative (EUR -31.3 million)).
In 2018, India was the 37th largest export and 30th largest import partner. The export of goods and services to India was EUR 46.9 million, which is 0.3% of the total export of Latvia, while import of goods and services – EUR 78.2 million, which is 0.4% of the import of Latvia.
At the same time compared to 2017, export has increased by 25%, while imports increased by 3%.
Q. Are there any challenges that hamper Latvia’s trade and investment relations with India? How do you think these will be addressed?
There could be several possible steps to further enhance the trade and investment relations between Latvia and India. Those include:
Continuing to work towards raising the awareness of each other and what both countries have to offer through various business roundtables, visits and participation in exhibitions.
In addition to bilateral business agreements (double taxation avoidance, investment protection) new trade and business opportunities to the benefit of businesses and consumers on both sides would open up with the EU-India Free Trade Agreement (FTA). We are looking forward to the potential relaunch of negotiations.
An opening of the Embassy of India in Latvia would give a further important impetus in promoting trade and investment relations.
Q. An integral part of Latvia-India relations traditionally is cooperation in culture and education. There is also a growing interest in Latvian culture and Latvian cinema in India. Please highlight some of the efforts that the government of Latvia is currently undertaking to strengthen its ties in this regard.
We are pleased that good relations between Latvia and India are not only at the political level. Also, the people-to-people contacts provide for a vivid exchange and learning from each other. Culture and Education are vital fields promoting it.
With each semester the number of Indian students in Latvia continues to grow. For several years now, students from India have constituted the largest proportion of foreign students in Latvia.
In the period 2018/19, the number of Indian students exceeded 2,000 and was approximately 1/5 of all international students in Latvia. This year the number has even increased.
I am convinced that in the future, these individuals will play an increasingly important role in strengthening the relationship between the two countries.
Likewise, a skilled Indian workforce in Latvia is undoubtedly an excellent opportunity for Indian companies to invest in Latvia and open their companies.
It is also clear that over time, this growing community will create an increasing need for an Indian Embassy in Latvia.
Culture can unite two communities and build bridges. For us, Latvians and Indians, culture has always served as an excellent basis for a better relationship, people-to-people contacts, and even the spillover effects associated with the strengthening of economic relations, for example, in the field of cinema.
The recently signed cultural cooperation programme is highlighting the excellent relations between Latvia and India with a significant potential for cooperation in fields like music and dance, films, literature, libraries, museums and others.
We want to call attention to the potential of cinema co-production. We invite the Indian producers to take full advantage of possibilities provided to international film productions by the National Film Centre of Latvia. [National Film Centre of Latvia rebates offers up to 25% in cash rebates].
Latvia is famous throughout the world for its classical music, choral singing and strong dancing traditions and we are open to further expand bilateral co-operation in the field of music and dance.
The Liepāja Symphony Orchestra, which is among the oldest orchestras in the Baltic region, has performed throughout India on several occasions, including celebrating Latvia’s Centenary. An excellent collaboration has developed between the Liepāja Symphony Orchestra and India’s violin icon and the distinguished composer Dr.L.Subramaniam, jointly performing as well as in India as in Latvia.
Q. Are you satisfied with the existing engagement levels? And what do you expect going forward?
Let me tell you one legend about Riga. It is said that every now and then a mysterious creature pops up in Riga and is asking everyone: Is Riga ready? So far, anyone who has met this creature always replies that Riga is not ready yet.
Legend has it that as soon as someone said that the city was ready, it would sink into river Daugava. We are smart – we know what to answer – Riga will never be ready.
You need to be able to appreciate what has been achieved, but at the same time, we have to be more ambitious. Go unused paths, connect in new ways, but not forgetting the tradition.
We have a lot to strive for and the relationship between Latvia and India will continue to develop and bring mutual benefits!