As India emerges as an economic force to be reckoned with, the Netherlands is moving in to capture a slice of the action with both governmental and private ventures.
India is rapidly emerging from its reputation as a mere outsourcing destination for Western companies seekinglower costs. With a market proportion, huge work force and economic growth that can rival that of China, India is swiftly establishing its position alongside economic superpowers.
In the first half 2009, India's economy posted a growth of 6.1%, while the AsianDeve'lopment Bank (ADB) projects growth of 7% for 2010.
Wout Biegstraaten, Business Development Manager for the Internationaal Ondernemen en Samenwerken (Agency for International Business and Cooperation) believes now is a good opportunity for "Dutch businesses to position themselves quickly and powerfully on a rapidly growing, very competitive market with distinctive knowledge, products and services."
Furthermore, Biegstraaten says India's economic potential was the reason the Asian nation was designated as one of 15 priority countries for which bilateral economic relations must be focused by the Ministry of Economic Affairs.
In February, Minister for Foreign Trade, Frank Heemskerk (PvdA) led a team of business
delegates to India, returning with six agreement memorandums between Dutch and Indian design houses.
While in the sub-continent, Heemskerk, together with his Indian counterpart, announced
a 10 million euro incentive package for companies investing in India. Recently, this program was increased to 2.5 million euros, and now includes industries such as agriculture,biotechnology, construction, ICT, infrastructure (including energy and water), logistics and the medical sector.
The Netherlands' efforts to capture a slice of the Indian market on both governmental and private levels is hugely ambitious.
Driven by several factors including the economic recession, increasing demand for expansion, collaboration with new dynamic forces and the need to explore a bigger consumer market, the Netherlands is moving at full pacetowards the Land of the Hindus.
Dutch opportunities
Elbert Waller, Head of the High GrowthMarket Practices of KPMG in the Netherlands,
also recognises the strength of Indian companies and their impact on more established corporations within continental Europe.
"It is totally a different ball game these days," he explains. "Emerging Indian companies are companies that we really have to be aware of, these are now competitors of our own multinationals."
Waller summarizes the Dutch advantage on investing in India in two points: knowledge exchange and the consumer market.
"Given the growth rate in India,there is a real room for Dutch companies and institutions to sell our knowledge.If we bring our knowledge to India, we can really produce high quality products and deliver them to large worldwide markets."
Waller also says the Indian consumer market wiII soon be of equal importance for the
Netherlands. "If you consider how fast the middle class is growing in India, I am convinced that many companies who are active in the field of retail and consumer goods can have a good future there."
Furthermore, he suggests' the Netherlands should focus on industries where their expertise has already been proven.Industries such as food processing, logistics as well as water management and purification are areas where the Dutch can effectively apply their knowledge.
"The Netherlands should really play theircards smartly and invest their money in these sectors with regards to India."
Sunil Malhotra, founder of IdeaFarms of India, supports this observation.
"India's vast geography is a great playing field for Dutch scientists, engineers and industry
experts, especially the rural sector. Also in areas such as life sciences, design, transportation, agriculture, water management. These are the very fields where India can learn the 'Dutch' way," he explains
India's Reception
Indian Ambassador to the Netherlands, His Excellency Manbir Singh sees the developing
business relationships between the two countries as a sign that India and the Netherlands
are beginning to mutually understand the viable collaborative opportunities between
the two countries.
"We are happy to see the enthusiasm being shown by the Dutch business sector because it gives us an indication that businessmen on both sides are finding each other," says Singh.
"We have high expectations that the trade and investments between both countries will expand further in the coming years. Continuing efforts from both sides will bring in the desired growth and intensification of bilateral trade a economic relations."
The increase in mergers, acquisitions and trade missions in 2009 between Netherlands and India are positive indications that the efforts are paying off. In May 2009, Apollo Tyres India acquired Dutch tyre company Vredestein Banden B.V., Tata Power has signed a memorandum in June to set up a power plant in the Netherlands while Infotech Enterprises has partnered with Dutch Volker Wessels Telecom for telecommunications engineering and services worldwide.
Meanwhile, the number of big scale and medium enterprises looking at possibilities of merger, acquisitions and new investments in the Netherlands have also significantly increase this year
The next five years will be a crucial period, not only to determine if target results will be achieved on the Dutch side, but also whether India will continue to race with the same pace to becoming the third largest economy by 2028.
The Holland Times
November, 2009
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