India and the Netherlands established diplomatic relations in 1947. Since then, the two countries have developed strong political, economic, and commercial ties. The Netherlands is among the top trading partners of India in Europe. Despite the continuing financial crisis in the Euro Zone and the slow growth of the Dutch economy itself, bilateral trade between India and Netherlands continued to gather momentum. Trade and investment cooperation, a vital component of the India–Netherlands relationship, has shown satisfactory growth over the years. The two countries bilateral trade climbed to USD 24 billion in 2022–2023.
Netherland’s growth is constantly rising in the Indian markets and has reached from 9th position to third. The Netherlands has emerged as India’s third-largest export destination, ahead of China and Bangladesh. It has moved up two spots in the list of India’s top ten export destinations since FY22.
The things driving up the trade momentum between India and the Netherlands are India’s outbound shipments of petroleum products, electronics goods, chemicals, and aluminum goods. As per data from the Global Trade Research Initiative, Indian petroleum products like aviation turbine fuel (ATF) and diesel dominated the export basket, and within the electronics category, telecom equipment, and smartphone shipments were valued at over US$1 billion.
Since the Netherlands consistently ranks among the top nations on the World Bank Logistics Performance Index, Indian exporters favor the Netherlands for their shipping operations. In addition to effective seaports, air travel, and business-friendly VAT implementation, it boasts a cutting-edge digital logistics infrastructure, making it more straightforward for businesses to reach European and EU clients. Furthermore, given that the Netherlands is a leader in water management in addition to science and R&D, both nations are attempting to establish strategic alliances in this area.
On the other hand, the pandemic is still being fought in China. As a result, India’s exports to China fell drastically by 35.6% to $6.8 billion up to August of this fiscal year. In comparison, India’s exports of goods to all countries increased 19.5% to $196.5 billion in the first five months of this fiscal year. Most exports are primary materials feeding China’s factories. With industrial growth coming down, China needed less of these. This broadly explains the decline in the export of many products. Therefore China is unable to maintain its position in the Indian market. The pandemic has led to a massive setback for China.
Over all these years, the relations between the Netherlands and India have remained intact. Therefore we can say that if the growth of Indian exports with the Netherlands keeps rising, the Netherlands might become the biggest exporter in the Indian market in the future. This would be beneficial for both countries as they have bilateral trade with each other and also have a sense of trust in each other.