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The year 2005, is the halfway stage of the Lisbon Strategy that commenced in 2000, where ambitious reforms and goals were set for the European Union by Heads of State and Government, which included establishing an effective internal market, by boosting research and innovation, and by improving education, to name only a few reform efforts, and aimed to make the European Union “the most dynamic and competitive knowledge-based economy in the world” by 2010.
The Press and Information Service of the Royal Netherlands Embassy answers Diplomatist’s questions:
What were the priorities of the Dutch EU Presidency and how much of it was achieved?
As far as the relationship with India is concerned the main achievement of the Netherlands Presidency of the EU was that both sides agreed to enter into a Strategic Partnership at the 5th EU-India Summit, which took place in The Hague on 8 November 2004. This Partnership is a milestone in EU-India relations that will boost the political, economic, cultural and scientific ties between the 25 member bloc and the world’s largest democracy. Both sides are currently working on a comprehensive Action Plan.
The priorities as well as the results of the Netherlands EU-Presidency can be found in their entirety in the following documents on the internet site www.eu2004.nl: “The Presidency’s Priorities” and “Looking Back”. Enlargement of the EU, promoting sustainable growth of the economy and improving security were among the Presidency’s priorities, and in these fields clear progress was made. As to enlargement, negotiations with Romania and Bulgaria were completed, and an agreement was reached to start accession negotiations with Turkey (without any guarantee as to the outcome). Furthermore, achievements have been reached in the field of freedom, security and justice as well as transport and environment.
What are the global economic issues/policies on which the Dutch and Indian views converge? Are there any divergent issues/policies that may be impediments to furthering bilateral and/or multilateral economic cooperation?
There are no major differences of opinion on economic policies. Of course, one would sometimes wish that the process of economic reforms in this country would proceed at a faster pace. And issues such as corruption, poor infrastructure and bureaucracy are still seen in the West as impediments to doing business in India. What is important is that the Indian government is fully aware of these problems and is prepared to tackle them resolutely.
What are the State and sector choices approved by both governments for Dutch Development Cooperation in India?
As a result of the decision by the previous Indian government to stop receiving government-to-government aid from certain donors the Dutch Development Cooperation Programme in India is now being phased out. The present government has indicated, however, that the Netherlands could resume its bilateral development cooperation with India on condition that it commits assistance exceeding $25 million per annum. No decision has been taken yet in The Hague.
The Dutch visa application process, for work permits and durations of stay exceeding three months, was a stumbling block to mutually beneficial cooperation between the two countries. Can and has this been eased?
I would not use the expression “a stumbling block” to describe the procedure to obtain a visa for the Netherlands. The process certainly will take some weeks, but when the applicant presents the necessary documents in time there need not be any problem. Lately, the visa-procedure has even become easier, since the verification of documents is not required any more.
With regard to work permits, it should not be forgotten that the Netherlands authorities are not the sole actors, but need the cooperation of the sponsor (the company inviting the Indian national), who has to submit the application to the labour migration authorities in the Netherlands. The Embassy cannot intervene in this process.
Various agreements, which together constitute a comprehensive framework for economic and commercial co-operation, are operational between India and the Netherlands. Apart from these, the Federation of Indian Chambers of Commerce (FICCI) and also the Confederation of Indian Industry (CII) have inked agreements with the Dutch employers’ association, VNO-NCW. What further agreements and MoUs are needed, and how can they be more effective to promote India-Netherlands economic and trade relations?
I don’t think we need more bilateral agreements or MoUs. As you may be aware, both countries established a bilateral Investment Promotion Committee in February 2004, when the Dutch Minister of Economic Affairs, Laurens-Jan Brinkhorst, paid a visit to his Indian counterpart, Minister Arun Jaitley. This committee will meet in the coming months.
What is really needed is that we raise awareness of the tremendous opportunities that exist to further strengthen trade and investment between our two countries. Both governments have a role to play there.
Indian exports account for a miniscule percentage of the total Dutch imports, and the Dutch exports to India are similarly very little of the total Dutch exports. Given the potential trade prospects between the two countries, why is India’s share of the overall Dutch trade continuing to be very small?
The reason for this is that traditionally a very large part (almost 70 percent) of the Dutch trade has been directed to other EU-members (especially Germany, Belgium, France and the UK). But the Dutch companies start realizing the enormous potential of the Indian market. The Dutch exports to India grew last year by more than 40 percent.
A large number of the Dutch majors, like Philips, Royal Dutch/Shell, Unilever, the Big Three of Dutch banking—ABN AMRO, ING, and Rabobank—KLM, Akzo Nobel, IHC Holland, SHV, Stork, DHV, among others, have put down strong roots in India in important sectors of the economy, and many of them are household names in India today. What additional investment plans do they have to expand/consolidate their operations in India?
The companies you mention are indeed well established in India and are eagerly looking at ways to expand their operations here. Royal Dutch/Shell for instance has invested heavily during the last few years in the development of a LNG terminal and port in Hazira, Gujarat.
Generally speaking, the Dutch foreign direct investment into India has grown significantly over the last few years. The most recent figures show that the Netherlands has become the third largest foreign investor in India (behind Mauritius and the US, but ahead of Japan and the UK).
Today, India has become the prime outsourcing country for the US, UK, and some other developed countries. It is encouraging that the, normally cautious, Dutch companies too are also slowly realising this fact. What is your take on this?
It is true that American and British companies were the first to realise the enormous potential of India in the field of BPO. Partly this had to do with the English language. But the Dutch companies are catching up fast, and rightly so. We believe there are many interesting opportunities for the Dutch and Indian companies to cooperate in this field.
Your views on how India and The Netherlands can enhance bilateral trade and cooperation.
Our role as an Embassy is basically one of making the business community, both the Dutch and Indian, aware of the tremendous opportunities of doing business with each other. The opportunities are vast, especially in sectors such as agro/food processing, infrastructure, logistics, IT/BPO, health, water and environment. Ultimately, it is up to the business community to seize these opportunities.
We try to bring this message across in our regular meetings with companies, by organizing conferences and seminars on “Doing business with The Netherlands” and by initiating trade missions from the Netherlands. Later this year, in October, the Netherlands Minister of Economic Affairs will bring a visit to India, accompanied by a multisectoral business delegation. The Netherlands Prime Minister and the Minister of Foreign Affairs are also scheduled to visit India in the coming year. These visits will offer an excellent opportunity to further boost bilateral ties.
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