Strategic agreements with the Netherlands — Bloomsbury Intelligence and Security Institute (BISI)

Consequences

Strategic commerce and industries

India is a strategic economic partner for the Netherlands and, more broadly, the European Union, given its demographic size and growing market. In fact, India is the most populous state in the world and has a vast, partly untapped reservoir of consumption, manufacturing and labor. Signed in January 2026, the India-EU agreement Free trade agreement (EFA) highlights the importance of deepening economic ties between the European bloc and New Delhi. The FTA eliminates all customs duties on 99% of Indian exports and 96.6% of its imports with the EU, including electrical machinery and equipment – ​​largest share of EU exports to India, valued in EUR 16.3b ($18.92b) in 2024. This gives India a competitive advantage compared to its regional neighbors in trade with the EU.

Specifically, the Netherlands is a provider of expertise to Indian businesses, particularly in the areas of water management, sustainable agriculture and smart cities. Additionally, Dutch logistics Hubs, such as the Port of Rotterdam, represent strategic gateways for Indian exports to Europe. Likewise, the vast and dynamic business friendly The market and qualified talent pool offer advantageous opportunities for Dutch companies, for example in the technology sector.

Cooperation on microchips

Indian company Tata Electronics and Dutch technology company Advanced Semiconductor Materials Lithography (ASML) have agreed to establish a large semiconductor factory in the western Indian state of Gujarat, Modi’s home state, which is home to most of the major industrial and infrastructure projects resulting from multi-sector deals with several Dutch companies. The decision was intended as the first step in longer-term cooperation between the Netherlands and India in the latter’s growing semiconductor sector.

ASML is Europe’s largest technology company by market value, specializing in the manufacturing of highly sophisticated machines for the production of microchips. Equipped with state-of-the-art Dutch equipment and a $11b Tata investment, Indian factory expected to become operational by 2028. Furthermore, in 2026, 4 semiconductor manufacturing plants are expected to become active in India, operated by Kaynes Semicon, CG Power, Micron Technology and Tata Electronics. This reflects the will of the Indian government commitment to “build an indigenous and robust semiconductor design ecosystem”. These factories represent the first semiconductor manufacturing facilities in India, moving away from the current excessive dependence on imports of foreign advanced electronic chips. These plans are in line with New Delhi’s latest broader strategy in the technology sector, continuing autonomy and “made in India” policies.

Importantly, several sectors use these chips, ranging from AI development to mobile phone manufacturing and automobiles. Prioritizing industrial independence, New Delhi also recently secured collaboration from Taiwanese chipmaker. Powerchip Semiconductor Manufacturing Company to support the establishment of the Gujarat factory. Achieving greater autonomy in chip manufacturing would allow India to develop its presence in the AI ​​sector beyond its current provision of software services and its pool of expert AI engineers, whose concentration in India is 2.5 times the average of the global working population. India is therefore on the verge of becoming one of the most competitive players in this market dominated by the United States and China.

Defense and security

Beyond trade, the Indian and Dutch Prime Ministers announced their intention to formulate an action plan for defense industry, focused on space travel, maritime systems and maritime security. The two countries agreed to strengthen the exchange of information and expertise, as well as industrial cooperation in the field of defense and security. Similarly, at the EU level, in January 2026, New Delhi approved a security and defense agreement. Partnership with the bloc, highlighting opportunities to strengthen cooperation in the areas of maritime security, cybersecurity, counter-terrorism and the defense industry. Such an unprecedented strengthening of diplomatic collaboration between India and the EU underlines the reconfiguration of New Delhi’s security alliances. Ties are moving away from China and toward greater diversification in pursuit of Indian strategic autonomy. This trend overlaps with that similar trend between EU member states to promote “Made in Europe” and reduce critical overdependence on Beijing. Thus, the closer India-EU relationship fits into this larger picture of bold attempts to reduce Chinese control over supply chains in both regions.

Human rights and freedom of the press

Despite the positive exchanges on economic and security issues, the Dutch Prime Minister expressed concerns concerning the protection of human rights in India, in particular regarding non-Hindu religions, Muslim communities and other minorities, as well as freedom of the press. In 2026, India ranks 157th out of 180 according to the Global Press Freedom Index. In the country, violence Violence against journalists is on the rise and pluralism is declining in mainstream media. These conditions highlight an important trade-off between increasing economic development and reduced democratic accountability that has characterized Modi’s presidency since its inception in 2014. On the one hand, in 2024, Modi’s party, the BJP, won the elections, but lost the large parliamentary majority it had held over the previous decade. On the other hand, despite this weaker mandate, the new hyper-rich elites have benefited from Modi’s policies during his last 12 years of government. It is therefore likely that these groups will maintain strong support for the BJP. In other words, they would encourage further democratic backsliding as long as such an erosion of the rights of the general population is accompanied by economic and political advantages for the best-paid elites. This would in turn fuel the widening economic inequality and polarization of Indian society.