Indo-Dutch relations has a history of over 400 years. Official relations, centered on economic and commercial bilateral ties, were established in 1947. The Dutch government identified India as an important economic partner in the early 1980s. Economic relations further strengthened after the liberalization of the Indian economy in the 1990s. In 2006, former Prime Minister Balkenende declared India, China and Russia as priority countries in Dutch foreign policy. To commemorate the 70th anniversary of diplomatic relations, PM Modi visited Netherlands in June 2017. This provided a significant boost to the multi-faceted cooperation. In addition to this, a successful festival was organized to showcase Indian music, art and dance. Multiple bilateral agreements and MOUs were signed across diverse areas, covering economic and commercial cooperation, culture, science and technology and education. Moreover, both countries share common ideals of democracy, pluralism and the rule of law.
In the financial year 2016-17, Netherlands was the fifth largest investor of FDI into India (US$ 3.37 billion), the 28th largest trading partner globally and the 6th largest trading partner in the EU. Cumulative investments amounted to US$ 22.63 billion comprising 6% of total FDI inflows between the periods of April 2000 to September 2017. Two-way trade stood at US$ 6.9 billion in 2016-17 with a balance of trade in favour of India of US $ 3.17 billion. Europe is India’s biggest trading partner and 20% of India’s export to Europe enters through the Netherlands. Indian exports to the Netherlands included: petroleum products and related materials (19.8%), apparel and clothing, textile yarns, fabrics and made-up articles (15.3%), organic chemicals (7.9%), vegetables and fruits (5.3%) and electric machinery (3.6%). Dutch exports to India included metalliferrous ores, metal scrap, plastics and general industrial machinery.
Many Dutch MNCs (Shell, Unilever) and major banks (ING, Rabobank) have their production sites and business operations in India. Dutch SMEs with niche technologies and world class expertise are also actively looking to enter the Indian market. India is a source of useful technical know-how, besides FDI, in a variety of sectors – water management, upgrading of ports and airports, dredging, agro-processing, telecommunication, energy, oil refining, chemicals, and financial services. As a result of the transparency, flexibility and stability of the Dutch tax system, there are 174 Indian companies presently based in the Netherlands. Indian companies like Tata Steel, Appollo-Vredestein and Hinduja Group have been involved in mergers and acquisitions and many are exploring possibilities for further tie-ups.
ASSOCHAM, India’s apex chamber, set up an office in Netherlands in December 2015, as a gateway to Europe and in June 2017, the Institute of Chartered Accountants of India (ICAI) opened an office in Amsterdam. The Netherlands-India Chamber of Commerce & Trade (NICCT) has set up an office in Mumba in February 2016. Netherlands backed India’s Missile Technology Control Regime (MTCR) membership.
Improvement in ease-of-travel and connectivity, with the successful implementation of the electronic Tourism Visa (eTV) in the Netherlands starting August 15, 2015, has provided a new impetus to tourism and business flows. Jet Airways has daily non-stop flights to and from Amsterdam from Mumbai, Delhi and Bangalore as well as one from Toronto. As of 2017, the Royal Dutch Airlines (KLM) is also operating three direct flights per week between Mumbai and Amsterdam.
Water is a prime sector of cooperation as exemplified by the joint water technology initiative, Dutch Indian Water Alliance for Leadership Initiative (DIWALI). Cooperation must be boosted in water conservation and irrigation. Both countries have committed to the climate change accord and hence, need to strengthen cooperation in the development of renewable energy. Thus, India and Netherlands are natural partners in economic cooperation and there is scope for further growth in the trade relations.
India Outbound
November 8, 2018
source https://indiaoutbound.org/overview-of-india-netherlands-trade-and-investment/
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