Netherland turns third largest export destination

Context

The Netherlands has emerged as India’s third-largest export destination, surpassing China. This significant development highlights the growing economic ties between India and the Netherlands. 

India-Netherlands Trade Relations

• There is a large-scale importation of goods from India by the Netherlands and vice versa making it one of the strong bilateral relationships of trade between the two countries.
• The subject country the Netherlands is an important market for Indian export and equally the subject country has invested its efforts to strengthen the trade relations with India.
• It is noted that for the current two countries there is a trade and economic partnership, its goal is to stimulate bilateral trade and investment.

Exports to Netherlands Surge

• However, the recent figures presented revealing the figures of the exports of India to the Netherlands reveal the trend of increase.
• The exports involve manufactured goods and services consisting of textile and garments, gems and jewelries, machinery, and electronics.
• The increase in exports as discussed is because of the following reasons; increased demand for Indian exports in the Netherlands, the competitive prices of the various products and services from India and the favourable business environment in the country.

Reasons for the Surge

Several factors have contributed to the surge in exports to the Netherlands. Some of the key reasons include:

• Growing demand: Oil Importers there also said that the Netherlands has experienced a growing demand for Indian products mainly in the textile and the gems and jewels sectors. For the above reasons, people of the country have started getting attracted towards luxurious products and India fulfils their requirements.
• Competitive pricing: It is also clear that Indian products have become more affordable to the global market hence making them suitable for import by Dutch firms. Simplification of procedures as a major factor, and reduction of bureaucracy also has contributed to the ease of doing trade by the Indian exporters.
• Ease of doing business: Government measures made by the Indian authorities of simplification of export trade policies and non bureaucratic measures have ensured more easy business between exporters and the Netherlands. The surrounding countries and global logistics have also supported better ways of moving goods to the Netherlands.

Impact on Indian Economy

The surge in exports to the Netherlands is expected to have a positive impact on the Indian economy. Some of the key benefits include:

• Boost to GDP: Consequently, exportation is likely to have a positive effect on India’s GDP – for example, an increase in exports leads to a higher amount of exports thus giving a positive contribution to India’s GDP. This will in turn lead to increased production, which will enhance the country’s GDP, since exports have recorded a steep growth rate.
• Job creation: These exporters are confident that since exports are on the rise jobs will be cultured in the economy particularly in Textiles & Apparel and Gems & Jewelries. It will also mean that there is a better demand chain pull for more Indian goods which will mean the production process is boosted and more jobs are created.
• Increased foreign exchange earnings: This is welcome since it will enhance the amount of foreign exchange which India holds from exportation of its products. Exports play a big role in boosting a country’s balance of payment ratio which in this case will improve since the country will earn more foreign exchange.

Conclusion

The emergence of the Netherlands as India’s third-largest export destination is a significant development in the country’s trade relations. An increase in exports will help further the growth of the Indian economy, and the government may possibly plan to bolster the bilateral relation of trade with the Netherlands. The B2B imports are expected to increase in the future years, as India is recording tremendous growth in its global economy status.

Source: The Hindu

UPSC Mains Practice Question

Q. Discuss the evolution and current state of trade relations between India and the Netherlands. What are the key sectors driving this bilateral trade, and how can both countries further enhance their economic partnership? Illustrate your answer with recent examples and data.

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