India-Netherlands Trade and Investment Ties

The India-Netherlands Fast-Track Mechanism will facilitate faster resolution of investment cases of Dutch companies operating in India as both countries seek to strengthen their investment corridor. Netherlands is India’s fourth largest source of foreign direct investment and bilateral trade between the two countries reached US$17 billion in 2021-22. Agriculture, health, port and shipping, science and technology, technical education, and urban development are key sectors of cooperation and business.

On September 27, the Department for Promotion of Industry and Internal Trade (DPIIT) and The Embassy of The Kingdom of The Netherlands officially agreed to formalize the bilateral Fast-Track Mechanism (FTM) between India and The Netherlands. India’s national investment promotion and facilitation agency, Invest India, will be the executing body of the bilateral FTM.

The FTM is set to increase mutual investment activities as well as support and develop business cooperation between companies in both countries. Netherlands is the fifth largest economy in the European Union (EU) while India became the fifth largest economy in the world (September 2022).

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India and the Netherlands boast of a strong bilateral economic relationship, with some Dutch companies operating in India for over 100 years. Speaking to the media, the Ambassador of the Netherlands to India, Marten van den Berg said: We are keen to collaborate more with our Indian partners to further stimulate Dutch companies in India, particularly in key areas of economics, science, and innovation.”

Trade and investment ties between India and the Netherlands

Bilateral trade

Bilateral trade between India and the Netherlands amounted to US$17 billion in the financial year 2021-22 (FY 22), up from US$13 billion the previous year.

In FY 2020-21 (FY 21), India’s exports to the Netherlands amounted to US$8.85 billion and imports stood at US$4.1 billion, and the Netherlands was India’s third largest trading partner in Europe that year.

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In FY 22, the Netherlands was India’s fifth largest export destination, a leap from its 10^th position just the year prior as Indian exports jumped 94 percent. Indian exports to the Netherlands surpassed that to Hong Kong, Singapore, the UK, and Germany as the Dutch market became India’s largest export destination in the EU.

During FY 2021-22, India’s main exports to the Netherlands were mineral fuels and mineral-based products, organic chemicals, electrical machinery and equipment, aluminum, iron and steel, and pharmaceutical products. Breaking this down, as per reporting in the Business Standard, India’s top exports to the Netherlands were aviation turbine fuel (US$2.6 billion), diesel (US$1.7 billion), smartphones (US$297 million), aluminum ingots (US$245 million), benzene (US$136 million), and prawn (US$75 million), among others.

India has a US$8 billion trade surplus with the Netherlands, one of four countries among India’s top 20 trade partners. India imported good worth US$4.5 billion from the Netherlands in FY 22, including soybean crude oil, waste and scrap stainless steel, aluminum scrap, nickel, and aircraft engine parts.

Source: Ministry of Commerce

Investments

As of 2022, the Netherlands is the fourth largest source of foreign direct investment (FDI) in India, moving up from being the fifth largest investor in FY 2020-21 with inflows of US$2.8 billion that year. As per India’s official data, cumulative flow of FDI between April 2000 and June 2022 from the Netherlands to India stood at US$42.3 billion. Overall, the Netherlands is the third-largest investor in India.

In FY 2020-21, the Netherlands was the third largest destination for overseas direct investment (ODI) from India (approx. US$1.22 billion).

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Key areas of cooperation between India and the Netherlands are agriculture, health, port and shipping, science and technology, higher education, and urban development. Both countries are working on strategic partnerships in the water sector as Netherlands is a pioneer in water management besides science and R&D.

Over 200 Dutch companies have a presence in India, including Royal Dutch Shell, Unilever, Philips, AkzoNobel, DSM, KLM, and Rabobank.

A 2019 report by The Netherlands Enterprise Agency (RVO.nl) notes Dutch presence in respective sectors across India’s major cities: Delhi (agriculture and food, energy, life sciences & health, smart cities, startups, and water), Mumbai (agriculture and food, energy, life sciences & health, creative industries, logistics, and high-tech system & materials), Bengaluru (agriculture and food, life sciences & health, startups, water, and high-tech system & materials), Hyderabad (agriculture and food, life sciences & health, logistics, startups, and high-tech system & materials), and Ahmedabad (agriculture and food, energy, logistics, smart cities, and high-tech system & materials).

Meanwhile, there are over 350 Indian companies present in the Netherlands, including Tata Consultancy Services, HCL, Wipro, Infosys, Tech Mahindra, Sun Pharmaceutical Industries, Tata Steel, LT Foods, United Phosphorus, etc. The Netherlands is the fourth largest destination for Indian overseas direct investment (ODI), worth US$22 billion.

Major Indian acquisitions of Dutch enterprises include OYO Hotels & Homes acquiring Amsterdam-based vacation rental firm @Leisure Group in 2019 for US$415 million, Tata Steel’s acquisition of Anglo-Dutch company Corus for £6.2 billion in 2007, Apollo Tyres’ acquiring Dutch tiremaker Vredestein Banden in 2009 for an undisclosed amount, and the acquisition of Dutch company Bilthoven Biologicals by the Serum Institute of India in 2018 for €80 million.

Investing in sustainable development areas: Dutch companies in India

Over the last five years, Dutch companies, particularly SMEs and startups, have harnessed UN Sustainable Development Goals – SDG 2 (Zero Hunger), SDG 3 (Good Health and Well-Being), SDG 6 (Clean Water and Sanitation), SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), SDG 11 (Sustainable Cities and Communities), SDG 13 (Climate Action) – to set up operations and launch business partnerships in India.

Some of the leading Dutch companies working on UNSDG-linked areas and present in India are: Rural Spark Energy Pvt. Ltd. (SDG 7), TomTom India Pvt. Ltd (SDG 11), LiteVax B.V. (SDG 3), De Heus India Pvt. Ltd. (SDG 8), Paques Environmental Technology India Pvt. Ltd. (SDG 6 and 7), SweepSmart Waste Management Pvt. Ltd. (SDG 8, 9, 11, and 12), and Tiny Miracles (SDG 1, 3, and 12).

This article was originally published September 30, 2022. It was last updated December 11, 2022.

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