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Large internal market and skilled labour availability make India an ideal location for foreign direct investment and global supply chains says Confederation of Indian Industry to Dutch Business

Posted on: July 03, 2020 | Back | Print

Embassy of India
The Hague

Press Release
June 30, 2020

 

Large internal market and skilled labour availability make India an ideal location for foreign direct investment and global supply chains says Confederation of Indian Industry  to Dutch Business

The Confederation of Indian Industry (CII) has conveyed to Dutch business community that a large internal market and skilled labour availability make India an ideal location for foreign direct investment and global supply chains. A webinar organized by  Embassy of India, The Hague on June 26, 2020 with the CII as a partner also highlighted the fact that the International Monetary Fund in its June forecasts has predicted that India will grow at 6% in 2021.

The webinar witnessed participation by former Dutch Foreign Minister Dr Uri Rosenthal, former Dutch Ambassador to India, Mr. Fons Stoelinga and representatives of the Dutch Government as well as leading companies like Shell and Philips. Dr Uri Rosenthal in his intervention said that the current geopolitical context puts India in a front runner position and provides enormous opportunities for intensifying India-Netherlands economic relations. Ambassador Stoelinga emphasized that India can find its niche in global value chains because India as a democracy is a more reliable place to count on. 

The CII was represented by Director General Chandrajit Banerjee and Chief Economist Bidisha Ganguly in the webinar. The speakers pointed out that a stimulus package of almost US$ 280 billion amounting to 10% of India’s GDP has been allocated towards recovery efforts. As per UNCTAD World Investment Report, India was a preferred destination for Global FDI inflows amounting to US$ 51 billion in 2019. Every indicator of economic activity has shown improvement since lockdown has eased and an even better performance is expected in June 2020.  Multiple policy reforms  include further enhancement of ease of doing business through Insolvency and Bankruptcy Code (IBC) related measures,  raising of FDI limit in defense manufacturing, introduction of commercial mining in coal sector. There are numerous indicators suggesting nascent signs of recovery including  39% increase in crop sown area over last year under oil seeds, coarse cereals, pulses and cotton; surge in fertilizer sales by almost 98%; improvement in Manufacturing Purchasing Manager’s Index (PMI) from 27.4 in April 2020 to 30 in May 2020; improvement in Services PMI from 5.4 to 12.6, increase in railway freight traffic by 26% in May 2020 over April 2020 and improvement in private placement of corporate bonds by 94.1% in May 2020 over the previous year.  

At the webinar, Ambassador of India to the Netherlands, Venu Rajamony invited Dutch companies to increase investments in India especially since there is substantial scope in sectors such as a healthcare, water, agriculture and agri-tech.

Economic and commercial engagement provides a solid bedrock to India-Netherlands relations. The Netherlands was the third largest investor in India for Financial Year (FY) 2019-2020 with FDI inflows of US$ 6.5 billion across a variety of sectors. Total investments from the Netherlands to India in the period April 2000-March 2020 came to US$ 33.85 billion. Amid the Covid-19 situation, Dutch multinational company Philips has announced an investment of US$ 40 million for expanding its facility in Pune.

There have been a number of high-level interactions in recent times. A telephonic exchange took place  between India’s External Affairs Minister Dr. S. Jaishankar and Dutch Foreign Minister Stef Blok in early June this year when they discussed economic recovery challenges and underlined their shared commitment to reformed multilateralism. India’s Minister of Commerce and Industry Piyush Goyal had a telephonic conversation with Dutch Minister of Trade and Development Cooperation Sigrid Kaag in May 2020 to discuss situation of global trade and avenues for further cooperation. In October 2019, the King and Queen of the Netherlands visited India on their first State Visit. The Royals were accompanied by the largest ever trade delegation comprising more than 250 representatives from various Dutch companies and organizations. The Netherlands was India’s partner country at the Technology Summit in October 2019. The State Visit was followed by a visit by India’s External Affairs Minister to the Netherlands from  November 9-11, 2019. 

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