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    India signs customs treaty with Holland to push business with Europe

    Synopsis

    In the last 15 years, the Netherlands has invested 15 billion USD in India and in the past few years, the Netherlands was one of the 5 largest investors in India while at the same time India was in the top-5 investors in my country.

    Menno Snel
    India is important to the Netherlands and vice versa, said Menno Snel.
    India and European economic major Netherlands last week singed Customs Treaty which will boost trade ties between the two countries through an efficicent management of customs rules. Menno Snel, Netherlands Minister for Customs and Taxation, during whose trip the Customs Treaty was signed told ET that the more efficient cargo can pass borders, whether in the Port of Rotterdam or Mumbai – or the airport of New Delhi, the more time and money is saved. In the new economy e-commerce is ever more important:

    1) How a Customs Treaty between India and the Netherlands is beneficial for an developed economy like Holland and emerging economy like India.
    India is important to the Netherlands and vice versa. I believe and hope our already good ties will only deepen further. The bilateral flow of goods and services accounted for over 7 billion euros in 2017. And we all know, numbers don’t lie. I think there are still many areas where we can work together to improve and increase our trade relations. A Customs Treaty between India and the Netherlands will result in a more efficient and effective control for our customs, and the Letter of Intent for this Treaty that was signed during my visit will speed up this process.

    2) How this customs treaty will change the daily work of the ports of Mumbai and Rotterdam in handling greater cargo from Holland to India and vice versa.
    With a faster and more structural exchange of information by both customs, India and the Netherlands are better capable to assess which goods or products need (physical) control. It is all about working together. For a trade country like the Netherlands, an efficient and effective customs with any country is important. In the end it is quite simple. The more efficient cargo can pass our borders, whether in the Port of Rotterdam or Mumbai – or the airport of New Delhi, the more time and money is saved. In the new economy, we also see that e-commerce is ever more important. These many small packages create challenges for our customs, especially since e-commerce is increasingly dependent on a fast delivery time, as online consumers continue to grow in both number and demand. More and automatic information helps our customs in these processes. Of course, we can only do this while making no concessions to the quality of our Custom checks. Which we won’t.

    3) What are current challenges for the Netherlands in investing in the Indian market (in terms of rules and regulations)?
    Overall India very much improved their doing business climate. However, our companies still face challenges, but they differ from business to business. Common difficulties that Dutch companies face are high import tariffs, lack of transparency in regulations, and sometimes local content or resource requirements and limited market access for our products. During the visit of Dutch prime minister Rutte to India in May 2018, agreements with prime minister Modi have been made to create a ‘fast track mechanism’. This mechanism can help Indian and Dutch companies to solve the challenges they face while doing business in their respective countries – and will hopefully also encourage more bilateral investments. Of course, we encourage the steps that India has been taken to ease certain rules and regulations.

    4) What are potential areas for new Dutch investments in India? Are joint projects in port sector in 3rd countries being contemplated?
    In the last 15 years, the Netherlands has invested 15 billion USD in India and in the past few years, the Netherlands was one of the 5 largest investors in India while at the same time India was in the top-5 investors in my country. ‘Traditional’ Dutch investors have often been in India for a long time. Many companies that you perhaps consider Indian, are in fact Dutch companies that have been here a long time, and happily so. These companies mostly center around health, industry, house-hold consumerism, and energy. Think of Philips, Akzo Nobel, DSM, Unilever and Shell.

    With the visit last year of Indian prime minister Modi to the Netherlands and the visit of our Dutch prime minister Rutte to India in 2018, I believe real momentum has been created in the cooperation between our nations. The interest for India among Dutch companies is increasing, and rightfully so. Its economic growth has not gone unnoticed, which provide opportunities for Dutch innovation and technologies. To give an example: India produces a lot of rice, but this uses much water. I think we can work together to combine Indian agricultural knowledge and Dutch water management to develop ways to make the production of rice more efficient and make farming sustainable. And developed or developing – as I see it, the Netherlands and India are equal partners for a sustainable future. And I am glad things are taking shape. I know that the India Tech Summit in New Delhi in the fall of 2019 will be a great opportunity to showcase how Indo-Dutch cooperation on innovation has taken shape over the years. The Netherlands is a partner country in the conference and I am proud for it. This proves to me that also when it comes to broader cooperation, for instance in 3rd countries, India and the Netherlands are suitable partners.

    5) The Netherlands is the gateway for Indian investments, including to the USA like Tata Steel. How much has USA-Europe tensions impacted that?
    The Netherlands is an open economy and a trading nation. For us, international trade is essential. In the end, no one profits from trade disputes. I think it is essential to continue the conversation between all parties within the WTO framework and to de-escalate tensions. I think the WTO is also the place where American worries can best be addressed. In the meantime, the European Union and as its member the Netherlands will keep on striving for rule-based free trade, in which we firmly believe.

    6) How can the Netherlands take advantage of Brexit to be India’s entry point into the mainland of Europe?
    Well, we really do not see the Brexit as an opportunity to in some way ‘take advantage’. The brexit is a lose-lose, both for the UK and for the European Union. But the decision to leave the EU is a democratic one, and of course we will respect it. I still think the deal that was reached between the EU and the UK was a good one. Now that the British have voted that down, it is up to them how to proceed. But also apart from the Brexit, the Netherlands – with the Port of Rotterdam, Schiphol airport, its science and technology institutions and its open culture is for many companies the gateway into mainland Europe. All we can do is keep improving. The Customs Treaty only helps in this ambition.


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    ( Originally published on Jan 20, 2019 )
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