References of a strong trade alliance between India and Netherlands can be traced back to the 17th century. Even today, the two nations boast of a robust relationship. In an interaction with The Dollar Business, H.E. Alphonsus Stoelinga, Ambassador of Netherlands to India, talks about the ways to further consolidate the strong bilateral relations and maximise opportunities for investors from both countries.
Interview by Ahmad Shariq Khan | December 2017 Issue | The Dollar Business
TDB: Indian Prime Minister Narendra Modi called Netherlands ‘India’s natural partner’ in economic development. Your Comments.
H.E. Alphonsus Stoelinga (AS): Today, warmth, friendship and commonality of views on a wide range of issues are characteristics of India-Netherlands relationship. Historically, trade between India and Netherlands dates back to the early 17th century, as far as 1610 AD. Textiles, precious stones, saltpetre, indigo, opium, silk, and pepper were some of the products shipped by the Dutch to and from India during that period.
The Netherlands today continues to be one of India’s largest trading partners in the European Union. It also remains amongst India’s top ten partners when it comes to trade volumes with a positive balance of trade in favour of India. Netherlands is also the third largest investor in terms of foreign direct investment (FDI) inflow into India. On the other hand, India is for us the fifth largest source of FDI.
Recent times have witnessed the relations between India and the Netherlands largely being shaped by engagement in trade and investment. About 40% of our economy is dependent on international trade, so we have no way out but to look for international business. India, on the other hand, is less dependent on international business.
There have been some major acquisitions and mergers by Indian companies including that of Corus by Tata Steel and Vredestein by Apollo Tyres and many Indian companies are exploring the possibilities for further tie-ups.
TDB: What are your thoughts on India’s youth and workforce? Will India’s demographic dividend pay-off in the long-run? How do you see India’s growing startup culture?
AS: On the basis of my regular interactions with the Indian youth, I have noticed a new spark, a new energy in them. Undoubtedly, they are more globally connected now. Indian students today are in significant numbers in all European universities, including in universities in the Netherlands.
In fact, we recently launched the Golden Tulip Scholarship for Indian students that involves 21 Dutch educational institutes. Indian students have a preference to study subjects such as pure sciences, physics, chemistry and mathematics, etc. They have science in their DNA! I believe, that calls for a lot of dedication and persistence too – that’s why I think you have outstanding chess players like Vishwanathan Anand.
When it comes to startups, in Holland, we have created a programme called Dutch Startup Delta that fosters the startup culture. We want to connect and collaborate with the best of Indian minds to tap mutually beneficial avenues. We were in Bangalore for our ‘Holland Meets Bangalore’ week from October 23 to October 27, during which a sub-event titled ‘Get in the Ring’ had 20 Indian and Dutch startups pitch their innovative ideas. The winners of the contests won tickets to the Global Meetup 2018! The entrepreneurial pool from Bengaluru, the Silicon Valley of India, is of great interest to Netherlands which is also why the new Dutch Consulate in the city is coming up in 2018. We are already working on a strategy to support Indian and Dutch startups.
Recently, I also had the pleasure of meeting Saket Modi, an Indian IT entrepreneur and CEO of Lucideus Tech, a cybersecurity company. He was invited at a major international conference on cybersecurity in Holland. I believe people like him represent the new India. It’s young Indians like Saket that will take India into the future.
TDB: Which sectors have the potential for Indo-Dutch collaborations?
AS: There are many areas where we can collaborate. I am of the view that with the help of Dutch technology, together with the low-cost innovations from India, both sides can tap many win-wins. While the Netherlands has world-class expertise in water management, biotechnology, agriculture, agro-processing, dairy farming, horticulture, and floriculture, India is strong in low-cost innovation in software development and upscaling inventions to marketable products.
Holland is also home to many world-acknowledged agroforestry innovations. Partnerships in areas such as agriculture can pay rich dividends to both sides. We can support India in doubling its food production and doubling the farmer’s income. For example, in the hilly areas of Himachal Pradesh and Kashmir, where apples are grown in abundance, due to the shape of the apple trees, a farmer cannot grow too many trees per hectare. In Holland, by combining different plant varieties, we have succeeded in breeding a type of tree that stands more like a column - tall and thin, whereby all the branches get an equal amount of sunshine. The technology has also resulted in a shorter gestation period of a little over 12 months. Recently, I was at a university in Kashmir, where faculties showed farmers how switching over can benefit them. With the help of the government, we are helping farmers switchover. And in that, it is not just the State government that is offering subsides but banks like J&K Bank are also offering very generous credit terms. In order to meet the burgeoning Indian demand, we are building a nursery of such trees here itself.
Another notable example is in the potato breeding segment. Last February, I inaugurated a joint venture between Mahindra Agritech industries and HZPC Holland, in Mohali. Currently, the average potato yield in India is 23 tonne per hectare. With the seed potatoes of HZPC, we can lift that to 46 tonne per hectare. Under the arrangement, HZPC with its R&D focus will provide access to latest technology, varieties and open up global markets for the Indian farmers. We are now getting similar queries from states such as Tamil Nadu and UP.
TDB: Nitin Gadkari, the Indian Minister for Road Transport & Highways, Shipping and Water Resources, seems bullish on the prospects of inland waterways in India. How are Dutch companies collaborating in this segment?
AS: Yes, the honourable minister is very keen on developing India’s inland waterways as there exists a huge potential for its development. We are offering our assistance on this front as we have world-proven expertise in this. We have many canals, rivers and lakes in Holland. Long back, a large part of our country was water, and we claimed one-third of our land from sea and lakes.
Interestingly, there is a legend in Holland that says God created the world and the Dutch created half of their country themselves! In Holland, all the rivers, canals, lakes are continuously dredged, because only a deep river stays at its place. In case it turns shallow, it’s bound to change its position. I observe this problem in the Indian state of Bihar where each year farmers have to shift the location of their farms. Also, if you wish to make your rivers deep enough for transportation, you need to do dredging, and we are quite good at that – both inland and offshore. Today, if you happen to visit Hooghly River in Kolkata, you would see the result of our involvement. Many Dutch companies are engaged in various national inland waterways projects including the production of shallow barges, etc. We could build small dredging ships here in India.
We are optimistic on the market prospective for such equipment. The Indian government’s ambitious Sagarmala project can turnaround the face of inland maritime trade. What is needed is more public-private partnerships in this area.
TDB: Evidently, waterways and renewable energy are two areas where Netherlands has expertise. Is the country engaging with India in projects such as Clean India?
AS: Yes, expertise in renewable energy is our strength. We are situated at the mouth of the sea, which makes us an apt choice for such projects. When PM Modi came to Holland, he also took note of our expertise in such initiatives. We have windmills, water solutions and solar energy-based projects expertise. Backed by this expertise, many Dutch players are involved in activities of the Clean Ganga Mission.
As we speak, a Dutch government agency is conducting a river modelling study across the length and breadth of the capture area of the Ganga river. Furthermore, we have planned many waste-to-energy solutions like sewage treatment plants (STP) here.
We were recently in Lucknow and Kanpur to launch a tannery waste-management project led by Solidaridad Network Asia, to reduce the use of water and to bring down the level of contamination by introducing new technologies and capacity building.
TDB: Post-Brexit, how do you envisage India-EU relations to evolve?
AS: What investors hate most is uncertainty. So, whatever the result of the negotiations between EU and Britain on Brexit, they should finalise these negotiations as fast as possible and create clarity. If not, investors will vote with their money. Fact is that the number of Indian companies establishing themselves in the Netherlands has shot up by 350% per year since June 2016. After Brexit, Britain of course will want to ink a separate trade and investment treaty with India. The signals from the Indian side are that they will first want to conclude an agreement with EU and use that as the format for one with UK.
TDB: The EU-India FTA has been in a limbo for a long time. Is Netherlands pitching any agreement with India?
AS: In recent times, the two sides have actively been exploring such win-wins, but the problem is the Netherlands is a member of the EU under which we have agreed that some issues have to be taken up at EU level only, and that include trade negotiations and investment treaties. Now we are waiting for negotiations at EU levels to conclude as these issues can now only be discussed as a complete package between India and EU.
TDB: What has been your experience when it comes to ease of doing business in India? Is the country moving in the right direction?
AS: India’s ease of dong business in recent times has improved, no doubt about that! We understand that PM Modi has set a target of bringing the country to 50th place but then it is India’s sheer size and varied domestic market dynamics that pose a challenge here. GST is certainly a big leap forward. The general impression we get from our Dutch businesses is that corruption at the highest level has been tackled successfully, but then individual states and cities need to follow suit and do their bit.
TDB: The Indian government has announced FDI reforms aimed at attracting more investments into India. How do?Dutch companies?plan to capitalise on the opportunity?
AS: Of late, PM Modi has introduced many significant reforms across a wide range of sectors. There are reforms announced in sectors such as insurance, defense and multi-brand retail. I believe, so far, many Dutch companies have shown interest in these sectors. Defence-related equipment, radars and ancillary parts are also our strengths. For us, multi-brand retail is also very important. We have a very big supermarket brand called SPAR Netherlands whose India wing has recently announced that it aims to record a turnover of €300 million by 2019.
TDB: What are the top two bottlenecks for FDI into India?
AS: Cumbersome procedures and an unpredictable business environment are the two factors that in my view still play spoilsports to the cause of smooth FDI inflow into the country. As an Ambassador, such aspects are brought to my notice and I am informed of uncertainty around various procedures such as leasing, tenders, starting a business, etc. At times, policy-related surprises create hurdles. Even though Netherlands is the third-largest source of FDI for India, there is still no bilateral investment treaty between the two countries.
TDB: What makes the Netherlands an ideal investment destination for Indian?investors?
AS: Out of our many USPs, the first is our locational advantage. We are right in the middle, between France, England and Germany. In fact, 20% of India’s Europe-bound exports enter Europe via Netherland’s Rotterdam Port and Schiphol Airport. The recent, Joint Cooperation Agreement between KLM, Air France and Jet Airways also marks a new, historic chapter between India and the Netherlands. Under this agreement, bilateral trade will witness more connectivity, comfort and choice.
In the last two-three years, looking at the increased pro-trade dynamism in India, we have positioned Holland as India’s hub in Europe. We have good connections to the hinterlands in the whole of Europe. If you wish to export to Germany, Rotterdam is your most efficient bet. The mega port also brings together a whole ecosystem needed for smooth trade. It offers a whole lot of facilities related to manufacturing, processing and packaging, etc. For Indian companies and banks, post-Brexit, the Netherlands will offer the best alternative in the EU for many reasons. We are just 100 km away from London and we all speak English (and two and a half lakh speak Hindi). We are also the fourth most innovative economy in the world. And our people and economy are hyper connected.
As we have an open economy, it’s very easy to invest in the country. Our ease of doing business is very high too. In fact, we are ranked amongst the top ten. London’s status as the financial capital of Europe is becoming very uncertain. The transfer of the influential and prestigious European Medicines Agency (EMA) from London to Amsterdam is a precursor of what is to come.
TDB: Netherlands, as you said, has a sizable population people of Indian origin. How important is this connect?
AS: At present, Netherlands has the second-largest population of people of Indian origin in Europe, in which we have a sizable proportion of Hindustani people [whose ancestral roots are mainly in Uttar Pradesh and Bihar] who left Suriname after its independence in 1975 and decided to settle in the Netherlands. In recent years, many Indians from India have joined them. We recently also celebrated Suriname Day on the banks of Hooghly, accompanied by Minister of State for External Affairs M. J. Akbar, who unveiled a plaque in the Dutch language at the Mai Baap Memorial on Suriname Ghat. Today, the Hindustanis and the NRIs share a common cultural base and many hold good positions in all walks of Dutch life.