The Netherlands Consolidates Economic and Trade Ties with India

April 28, 2014 Posted by India Briefing Reading Time: 5 minutes

DELHI –Dutch Ambassador to India Alphonsus Stoelinga lauded efforts to strengthen the Netherlands’ close economic relationship with India this month at the inauguration of a new Royal DSM plant in Gujarat and opening of a new Visa Facilitation Center for the Netherlands in Ahmedabad.

As one of India’s largest trading partners, the Netherlands accounted for US$10.56 billion (3.5 percent) of Indian exports in 2012-2013, according to statistics from India’s Department of Commerce and Industry.

“India and the Netherlands are very important economic partners for each other. India is the fifth largest source of foreign direct investment (FDI) in the Netherlands and the same is the case of the Netherlands which is also the fifth largest source of FDI into India. The Netherlands identifies India as an important economic partner [and] India is investing heavily in research in our country and has provided a good number of professionals in the field of engineering,” Ambassador Stoelinga said at the inauguration of the new Royal DSM plant earlier this month.

“This plant is a perfect example of Dutch FDI in India. DSM is recognized for its global leadership in initiatives related to food security, preventing hidden hunger and promoting sustainable development in high growth economies,” he added.

A Dutch-based multinational specializing in life and materials sciences, Royal DSM announced its intention to scale up investment in India early last year in anticipation of India’s National Food Security Act, which was signed into law last September.

DSM’s newest Fortitech Premixes plant in Gujarat “is expected to be [a] one-stop source for food, beverage and pharmaceutical manufacturers looking for fortification as a way to differentiate their products from their competition,” according to a press release from the Dutch Embassy.

Centers of Excellence

The Netherlands’ more than 400 year old economic relationship with India extends far beyond foreign direct investment, however.

Last year, the Dutch Government sanctioned the creation of ten Centers of Excellence (CoEs) that will serve as focal points for cooperation and knowledge sharing between the Indian and Dutch agro-food industries. Aiming to help India raise its agricultural outputs, the focus of each CoE will vary depending upon the agricultural products produced in each location. Currently, Gujarat, Punjab, Maharashtra, Karnataka and Kerela are under consideration for the Dutch CoEs.

“In India we are setting up agriculture CoEs through public private partnership. In Gujarat, we are exploring a CoE for potatoes or horticulture while in Kerala it will be set up for horticulture. Similarly, in [the] North-East we are exploring a center for cattle [and] pork while in other states it will be set up for banana ripening, dairy and piggery. As India is looking to double its food production, it has to intensify its agriculture to enhance output, but at the same time prevent losses in the food supply chain,” Ambassador Stoelinga said.

“Horticulture and [the] agro-food sector are important for both countries. India is a huge producer as well as a market in agriculture. SMEs from the two countries can collaborate together to explore business opportunities in this center,” he added.

Anand Krishnan, Deputy Counselor for Agriculture at the Dutch Embassy, praised the opportunities for collaboration the new CoEs would foster.

“This will be a platform for both governments in creating business opportunities in agriculture and work on joint projects. We will work on how Dutch knowledge can be brought in the field of agriculture,” she said.

Increasing Visa Demand

Another sign India and the Netherlands’ economic relationship is strengthening can be found in an increasing demand for visas to the small Western European country.

Speaking at the inauguration of the Netherlands’ new Visa Facilitation Center in Ahmedabad, Gujarat, last Friday, Ambassador Stoelinga highlighted the increasing number of Indians choosing to study and work in the Netherlands.

“In just three weeks of our opening the center, we received more than 40 visa applications. We expect 45-50 applications every month. The maximum requests for visa is for business travel followed by tourism and student-exchange programs,” Ambassador Stoelinga said.

The Ambassador additionally noted the affinity residents of Gujarat had for travel.

“When it comes to travelling, [the] share of Gujarati travelers is on the rise. Among the total number of international travelers from India, 30 to 40 percent are from Gujarat. Holland is also becoming a favorite for Indian students and businessmen. This Visa Facilitation Center will surely help them and save their time too,” he said.

In 2013, over 32,000 visa applications for the Netherlands were received in India and many expect this number to increase by 20-25 percent this year. The new Visa Facilitation Center in Ahmedabad will additionally process visas for six other Schengen countries, including Germany, Spain, Switzerland, Belgium and Greece.

Looking Ahead

When asked about India’s economic and political future, Ambassador Stoelinga refused to directly comment on candidates in the ongoing election, but said he admired the country’s election process.

“While focusing on the result, we should not forget about the process of conducting the election. I admire the election process. It is also remarkable that Indians will be giving votes through electronic voting machines. In my country, we still use the piece of paper to cast our votes. We will accept the outcome of this election [and] I should not comment on the quality of any candidate. [However,] India needs to focus on building infrastructure such as roads, ports and railroads [and] there is also a need to build more educational institutes and schools at all levels,” Stoelinga said.

“In the next ten years, India needs to double its agricultural production. Holland can play a crucial role if India wants to move into that direction. Apart from agri-business, our companies want to play a crucial role in sectors like sports, irrigation, ports, education and tourism,” he added.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email india@dezshira.com or visit www.dezshira.com.

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