Easier to do business in India now, but challenges remain: Dutch PM Mark Rutte
High import tariffs, lengthy tendering procedures make it difficult to do business with India, says Dutch PM Mark Rutte
New Delhi: Dutch Prime Minister Mark Rutte will be in India on 24-25 May with the largest ever business delegation to solidify economic ties with New Delhi. In an email interview, ahead of the visit, Rutte kept away from controversial issues, including the issue of renegotiating the Bilateral Investment Promotion and Protection Agreement(under which the Dutch arm of Vodafone Group Plc. had dragged the Indian government to arbitration over a retrospective tax demand arising from Vodafone’s purchase of Hutch Essar in 2007 for $11 billion). However, he pointed out that despite India moving up the ease-of-doing-business rankings, Asia’s third-largest economy remains a difficult place to do business in.
It has almost been a decade that India and the European Union (EU) are negotiating a free trade deal, but the talks seem to have hit a wall on various issues such as data security and protection, and taxes on alcoholic beverages. Is this something that you will be taking up with the Indian authorities during your visit?
We will most certainly raise this issue. We believe that a speedy conclusion of the FTA (free trade agreement) negotiations is in the interest of both India and the EU, its biggest trading partner. In the Netherlands, we have a particular interest in this issue, because 20% of Indian exports to the EU enter through Dutch ports.
India has moved up in the global ease-of-doing-business rankings. Are Dutch businesses finding it easier to set up shop in India? If so, what are the sectors they are looking to invest in?
The improvements in ease of doing business have been welcomed by Dutch businesses. At the same time, challenges, including high import tariffs and lengthy tendering procedures, which make it difficult to introduce innovative technologies, do remain. I think both India and the Netherlands are missing out on a lot of opportunities here. We hope to discuss these issues during the visit. Dutch businesses are looking at a wide range of sectors in India, including agri-food and horticulture, high-tech, smart cities, life sciences and health, and water and logistics. All these sectors will be represented in the upcoming trade mission.
India has some flagship programmes like “Make in India” and “Skill India”. How can the Netherlands contribute to such programmes?
Given Dutch technology and specialist knowledge, we are very well placed to contribute to these programmes. I can give you lots of examples. Dutch companies are working on cleaning the Ganges, for instance. And during my visit, Dutch start-ups will present new ideas and technologies to combat air pollution and smog. Also, as part of our collaboration in the area of science, technology and innovation, the Netherlands and India are working jointly on innovative solutions to societal challenges in healthcare, water, energy and agriculture. Cooperation on new vaccines and affordable medical devices will be announced during the mission. These are excellent examples of projects that tie in with the “Innovate In India” programme.
Food processing is one sector where India is looking at attracting investments. Is it good news for Dutch businesses?
Food processing is one of the most competitive sectors of the Dutch economy. The Netherlands is the second largest exporter of food and agricultural products. Our focus, as regards India, is on the export of knowledge and technology in the food industry. The Netherlands is too small a country to feed the world, but it is big enough to develop technology that enables other countries, including India, to help modernize the food industry.
Come March 2019, Brexit may become a reality. Indian companies, which used London as the base to enter Europe, is looking at new options to relocate their businesses. Amsterdam seems to be a good substitute, but the Netherlands has not shown interest in attracting these companies. Why?
We are not actively campaigning, but of course we agree that the Netherlands would be an excellent location as the European headquarters for Indian companies, especially after Brexit. That will also be a message we will definitely share during our trip. The Netherlands is strategically located, with the major ports of Rotterdam and Amsterdam, a world-class airport, and high-speed road, rail and broadband networks connecting you to some 500 million European consumers. We also have a highly skilled, multilingual workforce, and many expats laud the quality of life in the Netherlands. So, you are more than welcome!