India is emerging as a leading destination for foreign investments. In 2020, American companies like Google, Facebook, and Amazon have all announced new investments in the country. Dutch companies are planning to follow suit by making investments as well, and are aiming to diversify their operations in India. These operations include supply chains, manufacturing capabilities, and retail outlets and may expand even further if the companies continue to see success in these areas.
Why International Companies are Investing in India
Companies such as Shell and Phillips have already indicated that they are looking at creating long-term plans for the Indian market. India presents an attractive investment opportunity because of its vast population, rising income levels, relatively lower wages, and special investment privileges like tax exemptions. And that’s not all. India has also recently made it easier to do business with the country by relaxing FDI norms like defence, stock exchanges, power exchanges, and PSU oil refineries across sectors, creating further opportunities for Dutch companies.
The Sectors Dutch Companies are Investing In
There are nine major sectors in which Dutch companies are looking to invest in. These sectors include Water Management, Shipping, Renewable Energy, Inland Waterways, Science & Technology, Ports & Logistics, Agriculture, Urban Development, and Healthcare. Leading Dutch firms believe that these sectors present an attractive investment proposition in the medium term.
The decision to make long-term investments in India will also have implications in terms of trade. The Netherlands is already India’s fourth-largest trading partner in the European Union (EU) and has investments valued at $2.67 billion. If Dutch companies manage to increase their presence in the Indian market, then the country’s rank could improve even further. Since there are already over 200 Indian firms active in the Netherlands, we will have to see if Indian companies also decide to make reciprocal investments.
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