Strengthening Relations

Following on the success of the previous interactions, the Dutch government led a 5-day, 40-member, 27-company economic mission into India this week, headed by Marten van den Berg, Deputy Director-General for Foreign Economic Relations, the Netherlands. He gave an update on the agenda, aims and future outlook of the relationship between the two countries.

This is the third economic mission to India. How is this one different and what milestones are you looking to achieve with it?

Missions from the Netherlands are part of a long-term programme for specific countries, for specific sectors. India is one of our focus countries and we have a very long term programme for India.
This mission is focussed primarily on two sectors—automotive and agriculture. We are also holding some investment events where we are promoting the Netherlands as a very interesting country for Indian companies to go to. There are already a number of Indian companies in the Netherlands. Besides being interesting, it can also be used by Indian investors as a gateway to Europe. They can see it as a country to base their European headquarters. So far Indian companies have been very successful in the Netherlands.
Looking at this mission, today we have had a very interesting session on the automotive sector. I think we share similar challenges. By automotive we mean mobility. In terms of cars, the Netherlands is already at 500 cars per 1000 people, while here it is 7 cars per 1000 people, which means there is lot of room to expand. On the other hand you have look at infrastructural and environmental concerns.
The Dutch automotive sector is a very large automotive sector, with around 45,000 people working in it, not only at research and educational institutes, but also at manufacturing companies like DAF Trucks, NedCar, and now we also have Spyker Saab—Saab is now a new Dutch car. So there is a lot of knowledge in terms of security, environment, and there’s a lot of technology. There is, therefore, a lot of room for cooperation between Indian and Dutch companies. We have signed a kind of a letter to start immediately cooperation in the Dutch and Indian automotive sectors. It all looks very promising.

So in that sense things have really moved from just “Netherlands is good for investment” to more specific and targeted messages.

Absolutely. The messages are targeted and directed towards specific sectors. Also if we look at the relationship between India and the Netherlands, it used to be more focussed on trade. Now we also focus on investment and technology. So that makes for three pillars of an economic relationship. We have specific sectors that we focus on, where we have strong companies and we have something to offer to other countries. These are sectors that are looking outward and considering foreign markets, foreign cooperation for investment, technology and trade.

How have the earlier two missions helped in building a positive image of India as an attractive investment destination for the Netherlands?

Though it is very difficult to attribute a particular impression gained to a specific mission, the interaction educated people on India as a country, how developed it actually was, and how the development was so fast. If you get people to India and get Indians to the Netherlands, you can make people understand what India really is.
Of course, there are regulations challenges and other barriers. On the other hand, it is country with number of opportunities and high growth rate; it’s a huge market as the middle class is rising, so the number of consumers is rising. So there are a lot of interesting things going on in India. Bringing a more transparent view of India and the opportunities there will highlight the benefits of cooperation. A lot of Dutch companies are doing well through their Indo-Dutch connection and highlighting these will encourage others to consider the link and promote India as a possible partner in several ways.

How do see the trade between the two countries growing over the years, say from the figures of $7.2 billion in 2007-08? Can you put growth rate figures to the bilateral trade?

Trade between the two countries has more than doubled over the last four to five years. The growth rate in India is 7-8 percent. And if you look at the way the Netherlands profits from world trade, I think we can see that figure doubling in the next four years. Of course India is growing and the Netherlands is always on the positive side from the growth rates outside of Netherlands more than any other country within Europe. With the Rotterdam Harbour, a lot of trade goes through to the other European markets and the economy is very outward looking and encouraging to foreign cooperation and foreign trade. So we profit from all the trade with India, China or Brazil.

So how does the growth in trade with India compare with China or Brazil or even with the US?

If you compare the trade figures the Dutch are still very focussed on the neighbouring countries in the European market. We have to focus on the emerging markets, because they have huge growth rates, more than European markets especially if you compare last year when we saw a shrink in our economy, while countries China or India were still growing.
So the Indian or the Chinese economy will get a bigger part of the world economy, making it good to be present in these markets that in a growth phase. In terms of trade and investment, the US and neighbouring countries are still very important, but for the future it also very important that we shift our focus on trade with countries like India, China or Brazil.
In terms of trade, China is more important than India presently. But maybe ten years down the line trade with India will increase tremendously, which will strengthen trade relations.

How will emerging markets help counteracting the effects of the shrinkage in the European economy? How can countries like India help in bringing the balance into the world economy?

If you look to the markets and the balance, surplus countries also have to rethink their own national strategy, in the sense that they have to invest and start consuming in their own country and opening up their own markets. That can be helpful in restoring economic growth and restoring a kind of balance in the different regions in the world, which I think is quite important.
So opening up home markets and at the same time investing outside will help in opening up the world market as a whole.

In terms of the feedback from the companies that have come here with the earlier missions, is there any specific barrier that they face here in doing business in India?

There is a big difference in India and the Netherlands, which also makes it difficult, but also very interesting to trade with each other.
First are the more formal barriers in terms of regulations, tariffs and the cultural barriers. People from the Netherlands are different from the people in India. For example, the way we look at time is completely different from the way people in India look at time. In the Netherlands, an appointment is an appointment. In India they are more flexible; this can be also a great asset. There is this flexibility in Indian society that can be helpful for the Netherlands. But then you have to learn these differences and take the time to know each other and understand the other culture. And I have heard from the Dutch people doing business in India that the ones that do take the time to understand India, are very positive about the business climate in India.
If you compare the Indian markets to the European market as a whole, you may realise that the borders between the states within India are sometimes higher than the borders of different countries within the European Union. You have to deal with it you have to learn to deal with it if you want to expand in India, and that takes time. And if you do that then there can be good business in India and with Indian companies.
I am sure that is so the other way around. People who go to the Netherlands have to learn to deal with the customs there, which I suppose can be equally difficult. But then there are Indians who stay in the Netherlands are very successful there. There is then a way to Indo-Dutch cooperation.

Do have a kind of wish list you would put up to the Indian Government in terms of policy?

Yes, of course. In terms of policy, lowering of tariffs, opening up of sectors like finance, banking and insurance, which are important Dutch sectors. These are part of the trade agreement discussion. So if the Indian government further opens up these markets it would be very helpful for the Netherlands.

Could you elaborate on the interests in the agricultural sector?

There is a tremendous challenge to grow into the Indian Agricultural sector. And this is not just on the production side, but also on the transport side. So you really have to look at the whole chain of the agriculture sector. If you leave the produce on the highway in the sun, then it is likely that you cannot sell it any more.
The Dutch have a lot of experience and knowledge in the whole supply chain management of the agriculture sector. So there are members in this mission that are focussing on the whole supply chain management side. This would, I feel, be very helpful in improving the productivity in the agricultural sector in India. I have seen an article yesterday by an Indian columnist on the difference in the demand and supply of agricultural production, leading to high prices. So I suppose there is a big need in improving both the production and the supply chain efficiency. This is somewhere the Dutch can be very helpful.

What are the broad plans for trade and interaction between India and the Netherlands for 2010?

India will definitely remain as one of our focus countries. There is no doubt that economic relations with India will stay important to us, so we will continue to bring trade missions, investment missions and also try to increase technological cooperations with India. Also there will continue to be festivals and other activities to promote the cultural relations between India and Netherlands, so they get to know each other better.

On a personal note, have you visited India before? Are there any particular places you would like to see as a tourist, or is all business?

I have been to India several times, the first time in the 1980s as a backpacker. So it was a very good experience to travel in public transport and the trains. I went around Rajasthan and Varanasi among other places. It is an easy country to go around, with the public transport and people speaking very good English and are helpful.

Source: Connect