India invites Dutch firms to design and manufacture, says PM Modi at CEO roundtable
During an official bilateral visit to the Netherlands, a CEO roundtable was co-hosted by both Prime Ministers along with the Dutch Minister of Foreign Trade ...
What Happened
- During an official bilateral visit to the Netherlands, a CEO roundtable was co-hosted by both Prime Ministers along with the Dutch Minister of Foreign Trade and Development Cooperation.
- India extended a formal invitation to leading Dutch companies to participate in design, development, and manufacturing activities in India.
- The Prime Ministers discussed economic cooperation across sectors including semiconductors, green energy, water management, sustainability, and innovation.
- India highlighted its ongoing economic reforms — including in taxation, labour, and governance — as signals of macroeconomic stability and investment readiness.
- A landmark agreement was signed between Tata Electronics and ASML, described as a transformative development for India's emerging semiconductor fabrication ecosystem.
Static Topic Bridges
Make in India and Production Linked Incentive (PLI) Schemes
"Make in India," launched in September 2014, is a flagship industrial policy initiative designed to transform India into a global manufacturing hub by attracting foreign direct investment (FDI), reducing regulatory barriers, and strengthening domestic manufacturing across 25 sectors. The Production Linked Incentive (PLI) schemes, introduced from 2020 onward, provide performance-linked financial incentives to companies on incremental sales from domestically manufactured products.
- The PLI scheme has a total approved outlay of approximately Rs. 1,97,000 crore (around USD 23 billion) across 14 sectors, including semiconductors, mobile phones, pharmaceuticals, specialty chemicals, textiles, food processing, and advanced chemistry cells.
- FDI equity inflows in the manufacturing sector increased by 69% between 2004–14 and 2014–24, rising from approximately USD 97.7 billion to USD 165.1 billion.
- India allows 100% FDI through the automatic route in most manufacturing sectors, including electronics and semiconductors.
- The India Semiconductor Mission (ISM) oversees a dedicated USD 10 billion incentive package to attract semiconductor fabrication, packaging, and design investment.
Connection to this news: The invitation to Dutch firms to "design and manufacture" in India directly activates PLI and Make in India frameworks; the Tata Electronics-ASML agreement for a semiconductor fab in Dholera, Gujarat, is a concrete output of this policy architecture.
India's Semiconductor Ecosystem — ASML and the Dholera Fab
ASML (Advanced Semiconductor Materials Lithography), headquartered in Eindhoven, Netherlands, is the world's sole manufacturer of Extreme Ultraviolet (EUV) lithography machines — the equipment essential to fabricating advanced semiconductor chips (below 7 nm process nodes). Control over ASML's supply chain is a major axis of global semiconductor geopolitics, involving export restriction disputes between the Netherlands, the United States, and China.
- Tata Electronics has received approval for India's first front-end semiconductor fabrication plant in the Dholera Special Investment Region (SIR), Gujarat, targeting 300-mm wafer production.
- The ASML cooperation agreement supports this fab with lithography technology and know-how.
- The Netherlands' government has since 2023 imposed export restrictions on advanced ASML machines to China under US pressure, making India's access to ASML a strategically significant development.
- India's semiconductor design ecosystem is already robust (with major global chip designers operating India R&D centres), but the shift to domestic fabrication (front-end manufacturing) is the pivotal missing piece.
Connection to this news: The CEO roundtable produced tangible semiconductor cooperation commitments, placing India within the trusted partner ecosystem for one of the world's most geopolitically sensitive industrial supply chains.
Foreign Direct Investment — Regulatory Framework
India's FDI framework operates under the Foreign Exchange Management Act, 1999 (FEMA), with the Reserve Bank of India and the Department for Promotion of Industry and Internal Trade (DPIIT) as key regulators. The Foreign Investment Promotion Board (FIPB) was abolished in 2017, with most approvals shifted to the automatic route.
- India's Bilateral Investment Treaty (BIT) programme was revised after the Model BIT was adopted in 2015, shifting to a more state-protective posture (exhaustion of local remedies requirement, exclusion of taxation and government procurement from protections).
- The India-Netherlands Double Taxation Avoidance Agreement (DTAA) has historically made the Netherlands a major FDI routing hub for India — the Netherlands has been among the top five FDI source countries for India, partly due to treaty benefits.
- India's consolidated FDI inflows from the Netherlands historically rank among the top sources in Europe given the DTAA advantage; with the new strategic partnership, direct manufacturing investment (as opposed to pass-through investment) is the stated goal.
Connection to this news: The CEO roundtable operationalises the strategic partnership's economic pillar, with Dutch firms being courted for direct productive investment in manufacturing rather than financial routing through holding structures.
Green Hydrogen and Clean Energy Cooperation
Both nations agreed to cooperate on green hydrogen, which involves producing hydrogen through electrolysis powered by renewable energy (producing zero direct carbon emissions). The Netherlands is a major European hub for hydrogen infrastructure and port-based energy transition, while India has launched the National Green Hydrogen Mission (2023) with an outlay of Rs. 19,744 crore to produce 5 million metric tonnes of green hydrogen annually by 2030.
- India's National Green Hydrogen Mission aims to develop 125 GW of associated renewable energy capacity and reduce fossil fuel imports by over Rs. 1 lakh crore annually by 2030.
- The Port of Rotterdam (Netherlands' major port) is a leading European hub for hydrogen import infrastructure, making Dutch expertise directly relevant for Indian port-linked hydrogen projects.
- Green hydrogen cooperation was listed as a key pillar in the India-Netherlands Strategic Partnership Roadmap 2026–2030.
Connection to this news: Dutch expertise in hydrogen infrastructure, combined with Indian renewable energy scale, creates a natural partnership axis that the CEO roundtable sought to translate into specific corporate commitments.
Key Facts & Data
- Make in India launch year: September 2014
- PLI scheme sectors covered: 14; total outlay: approximately Rs. 1,97,000 crore (USD ~23 billion)
- India Semiconductor Mission outlay: USD 10 billion
- Tata Electronics fab location: Dholera Special Investment Region, Gujarat (300-mm wafer fab)
- ASML's uniqueness: sole global manufacturer of EUV lithography machines
- India-Netherlands bilateral trade (2024–25): USD 27.8 billion
- National Green Hydrogen Mission outlay: Rs. 19,744 crore; target: 5 MMT/year by 2030
- FEMA year: 1999; FIPB abolished: 2017
- FDI manufacturing inflows increase (2004–14 to 2014–24): 69%
- Netherlands historically among top 5 FDI source countries for India (DTAA effect)