Dutch companies develop special solutions for the Indian agricultural sector

Agriculture in India has faced major challenges for years, but climate change is only compounding the problems for Indian farmers. Can European technologies provide a solution or are they simply too expensive for the Indian agricultural sector? Dutch agricultural technology companies Omnivent and Incotec explain how they are advancing the Indian agricultural sector and making money in India.

Damage caused by climate change

India's agricultural sector is experiencing increasingly widespread adverse weather extremes such as prolonged drought, flooding and salinization of farmland. Late last year, heavy rains destroyed over 800,000 acres of agricultural and horticultural crops in the southern states of Tamil Nadu and Andhra Pradesh, while in the northern state of Kashmir, apple farmers saw their crops fail for the third year in a row due to early snowfall. Consequently, if global climate change continues at the same rate, crop yields in India are expected to drop by 30 percent.

Machinery, refrigeration, logistics & credits

Indian farmers also face a variety of systemic problems such as a lack of sophisticated machinery, difficulties in obtaining credit and logistical problems in marketing their produce. On average, 30-40% of the total crop is lost due to lack of cold storage facilities and/or refrigerated transport, which leads to lower income for the farmers. The Indian agricultural sector is in dire need of affordable solutions to all these problems.

Dutch companies develop special solutions for the Indian agricultural sector

Indian agriculture therefore offers great opportunities for European companies. There is a demand for knowledge that is abundant in Europe. The global specialist in agricultural storage technology, the Dutch company Omnivent, has therefore been active in the country since 2007.. The company began by giving workshops to arable farmers and other key players in the supply chain. "We talked to farmers about ways we could get the agricultural product to the end of storage in a good way," says Errol van Groenewoud, Omnivent's managing director. 

"This was not only useful for them, but also for our company. We learned a lot about the resources they had at their disposal and the farming methods used in India at meetings like this," says van Groenewoud. "We came to the conclusion that our European ventilation and storage products did not match the farmers' needs and that, if you want to capitalise on the growing demand for smart solutions, you have to develop low-threshold and efficient technology at minimal extra cost. We have therefore taken the simple fans that we sold in the Netherlands in the 60s and 70s for drying flower bulbs and adapted them to provide a good and affordable solution for Indian farmers facing high temperatures."

Developing products for India

Also The innovative seed enhancer Incotec soon after entering the market in India, came to the conclusion that while their seed enhancement technologies offered a great solution to the problems of local farmers, their prices were far too high for India. "To optimize our products for Indian crops and cultivation techniques, and especially to keep the price accessible, we decided to develop a product that was cheap for us to produce and that Indian farmers could apply to their seeds themselves," explains Erik-Jan Bartels, managing director of Incotec.

Market leader in India

Incotec is now the market leader in India in seed enhancement and sees a growing need among farmers for new technologies that can make farming methods more robust against climate change. "At the same time, a large proportion of Indian farmers still do not have the means to invest in innovative solutions, no matter how simple and cheap," says Bartels. "As a Dutch company, this should not stop you from taking the step to India. Indian agriculture must adapt to the major weather changes taking place there and although it will take at least a few more years before there is a real change, now is the time for companies to become active in India. India is a country where you have to invest time and energy before you can reap the benefits."

Take your time, it is worth it

"Doing business in India requires building good relationships with your customers," adds van Groenewoude. "So you have to take the time and have a local presence to be able to make that connection. Building a dedicated team in India that can fully focus on this is essential. If you stay at a distance and thus maintain a cold, businesslike relationship with your customers, you will never be successful in business in this country." 

Are you curious about the opportunities the Indian agricultural sector offers for innovative, European companies? Our sector analysis provides a comprehensive overview of key market statistics and growth prospects.

Did you know that India is the fastest growing agricultural machinery market in the world? 

Indian R&D division worth gold to NXP Semiconductors

Chip producer from Brabant, NXP, has grown into one of the largest chip producers in the world with a turnover of 11.1 billion dollars. “NXP’s operation in India plays a big part in that”, says Vice President of NXP, Sanjay Gupta. “We have 650 patents to our name.” 

Sanjay Gupta (in blue) during the NXP India Mentorship Program

Largest R&D hub 

NXP has 4 R&D offices in India. More than 3000 people work there in total. The various locations focus on specific markets. In Noida, near capital Delhi, they design hardware and software used in the next generation of microcontrollers and microprocessors for the automotive and edge computing industries, in Bengaluru they focus on the IoT and security markets, in Pune on connectivity solutions and in Hyderabad on software solutions for the communications and infrastructure market. "India is NXP's largest R&D hub," Gupta says. "And is also considered one of the most innovative hubs. We have so far been able to add more than 650 patents from India to NXP's already impressive list of patent families." This, according to Gupta, once again underlines the quality of Indian engineers.

Business culture in India

Gupta himself was an engineer from a leading university in India. "Twenty-six years ago, as a recent graduate, I was offered a job with this great organisation. I was fortunate to have multiple opportunities to grow and excel within this global company and was guided and supported by the management of NXP every step of the way, from one challenging role to another. In 2016, I was given the most challenging opportunity to lead NXP India, while the company merged with US semiconductor maker Freescale. Examples like my career within NXP are a huge motivator for our people: they know that truly everyone has the opportunity to develop within the company." 

NXP's Senior Leadership Team is actively working to create a family culture across all sites. "This is also good for the business," says Gupta. "Despite the fact that our teams in India are literally miles apart and focus on different products and markets, we encourage collaboration between departments as much as possible. We find that when we bring different disciplines together, they learn incredibly well from each other and often come up with new ideas or solutions for their own segment."

Ease of doing business

According to the India vice-president, companies who are still unsure whether India is the right location for their R&D department should make a move now. "There is a lot of talent in India and you don't have to worry as a company about the quality they can deliver. Moreover, doing business in India is becoming easier; just look at the enormous leap India has made in the past five years on the World Bank's Ease of Doing Business list. In addition, the government is investing heavily in the development of industries such as manufacturing and the chip industry. No wonder India is becoming increasingly popular with foreign investors."

Read more about the benefits of outsourcing your R&D to India and why now is the right time:

Tax benefits

The Indian government has announced in the 2022 budget to extend the tax benefits applicable to international companies setting up a manufacturing plant in India. In addition, major investments will be made in the chip industry, the automotive industry and infrastructure. According to Gupta, this offers interesting opportunities for European companies. "If you want to successfully enter the market in India, you need a long-term vision. Therefore, you should not only consider setting up your R&D here, but also explore the production possibilities. That way you can take advantage of the current incentives and be agile and prepared to respond to the rapid developments in Indian society."

Competition increases

Gupta is not worried about the potential competition for NXP now coming to India due to the favourable business environment. "First of all, I think competition is healthy for any company because it makes you more focused and efficient. In addition, we at NXP are so versatile, we work with talented people and the markets in which we operate are developing so rapidly that I expect us to increase our sales significantly in the next five years. Take for example the automotive industry, one of our key markets. We are currently working on exciting innovations and solutions for electric vehicles, infotainment & connected cars and autonomous vehicles, with a focus on improving the customer experience. This sector will continue to evolve in the coming years."

India is at a turning point

The MD admits that these advanced technologies may not yet be 100 per cent suited to the current needs of the Indian consumer. "But make no mistake, India has a population of over 1.4 billion, half of whom are under 35 years of age. This rapidly developing country has a growing middle class and rising income levels, creating huge business opportunities for international companies if they dare to seize the chance to invest in India and be part of this journey. India is known for embracing new technologies and solutions at an exponential rate, once they are at an affordable level. For instance, India is the largest two-wheeler country in the world. Every year, more than 20 million motorbikes and scooters are produced for the Indian market. The number of Internet users is also a good example. It has increased by 800 per cent in 10 years. Paying or shopping online was very unusual just a few years ago and now it has become commonplace. India is at an interesting turning point that companies should take advantage of." 

Market entry workshop

To become truly successful in India and take advantage of the opportunities described by Sanjay Gupta, a solid market entry strategy is required. India is a market that requires a long view and a good understanding of local needs and preferences. To make sure you start with the right strategy, IndiaConnected has set up a special Market Entry Workshop.

In 2 hours you will discuss your strategy with our experts and the following topics will be covered:

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Brabants ENS Clean Air experiences difficult market entry in India despite high demand for unique technology

ENS Clean Air from Brabant and artist Daan Roosegaarde jointly developed a so-called smog tower, which removes fine dust from the air. After the success in China, requests from India flooded in, but market entry was difficult. "You need to be in it for the long haul in India," says Esmée van de Vorle, managing director of ENS Clean Air.

Managing Director Esmée van de Vorle pitch ENS Clean Air's air purification technology during the trade mission in India

First steps in India

The first contacts with India did not turn out as the Brabant family business ENS Clean Air had hoped. "We have an interesting technology for countries that struggle with poor air quality," says Esmée. "Not surprisingly, soon after we were founded in 2009 we were approached by a potential Indian partner. I flew back and forth with my mother, the founder of ENS, several times to see if we could actually set up a joint venture with this potential partner. It just didn't seem like we could keep full ownership of our technology and that closed the door on us right away. Our goal is clean air for everyone, but this way it didn't feel right." After this experience, India disappears from ENS's sights for a while. Until Esmée got talking to a local engineer at a trade fair in Germany. He wanted to link the company from Brabant to the European Business and Technology Centre in Delhi, because he thought that India could make good use of ENS's technology. "We seized the opportunity. Perhaps with the help of European experts on the ground we could find the right partner." 

The applications from India are rolling in

While the Brabant family business is working with the EBTC to find a suitable business partner in India, artist Daan Roosegaarde is simultaneously starting his world tour with the Smog Free Tower. "That's a design tower incorporating our air purification technology," Van de Vorle explains. "That exposure suddenly got the whole world interested in us. One of the interested parties was the Dutch Embassy in Delhi, which is keen to help ENS gain a foothold in India. "And then it all goes really fast," says Esmée. "Through the EBTC we met a suitable partner with whom it clicked well, and through our contact with the Dutch embassy we not only got an assignment from The American Embassy School to improve the air quality in their courtyard, but also a last minute spot in the trade mission in India led by Prime Minister Rutte."

Don't shy away from pitching at a children's party

- Esmée van der Vorle - Managing Director ENS CLEAN AIR

A trade mission is hard work

"Trade missions are mainly a very nice way to make contacts and to get exposure for your business," explains Esmée. "So don't expect to come home after your participation with all the hard deals under your arm. Especially not in a country like India where building a relationship of trust between trading partners is ten times as important." According to Esmée, making good contacts is therefore one of the most important lessons she learned about business from her mother and would also like to pass on to other entrepreneurs. "You are on a business trip to work, so you just have to show your face everywhere. Not just at business events and meetings, you have to be on 24/7." 

Pitching at a child's birthday

"If you get the chance to meet in private, make sure you take it," is Esmée's advice. "During the trade mission with Rutte I met our new business partner, whom EBTC had found for us, in person for the first time. That went very well and so they invited us to the birthday of the owner's niece. That birthday fell exactly on our last day in India, three hours before the flight back to the Netherlands. My colleague therefore doubted whether it was wise to go, but I knew we couldn't miss out. Once at the party, we were introduced to one senior official after another, all very interested in our company. So on the last day of the trip I was pitching at a children's birthday party to about twenty high-ranking officials."  

Firm agreements on quality

ENS and their Indian partner, Sudhir Power, have now successfully completed their first major job at The American Embassy School in New Delhi. "This job allowed us to test our newly formed partnership. We only had technical supervision on site and gave our partner Sudhir Power the freedom to do the installation work in their own way." Despite the fact that, according to Esmée, in such a partnership you have to dare to surrender a little to your new partner's way of doing things, she still advises companies to make clear agreements on manufacturing methods. "For example, we have agreed that we will produce the control cabinets in the Netherlands and the rest of the components, such as the housing, will be made in India. We do have strict requirements for this, so that we can be sure of guaranteeing the quality of our product. Fortunately, we have found a partner who has been working with European companies for a long time. They understand very well what quality the products have to be."

Benefits of corona crisis

With the outbreak of the coronavirus, the cooperation between ENS and Sudhir has temporarily slowed down. "Not because things are not going well between us", says Esmée, "but because we agreed from the start that we would build up the cooperation slowly. First we'd date, then we'd get engaged, and whether we'd actually get married or set up a joint venture is something we'll see in due course." But the big impact COVID-19 is having on India could create some interesting opportunities for ENS's products in the near future. "We are still a niche product, but as air purification is an important weapon in the fight against airborne viruses, more attention is being paid to our technology. That could well pay off for us in the future. 

Bureaucratic hurdles

For the time being, ENS is mainly suffering from the strict measures that the Indian government has taken to curb the spread of the coronavirus. After installing the purification systems in the courtyard of The American Embassy School, ENS also had special measuring equipment installed to show how effective the systems work. "And then suddenly the whole country went on lockdown and we were suddenly unable to remove that equipment, which we had introduced with a special visa, in time for the permit to expire," says the management director of ENS. "I thought I had done the right thing by asking the Indian Chamber of Commerce for advice. But now they have sent me from pillar to post and there is a claim on our equipment. We are now getting help from Maier+Vidorno, IndiaConnected's partner in India, and hope to convince the customs authorities to let us recover the equipment. If not, this will become a legal case. I am thus learning a hard lesson about bureaucracy in India."

Family business

Despite this setback, for Esmée India is above all a place where you are received with a warm smile and genuine interest. "Especially the fact that we are a family business opens doors for us. Our Indian partner, for example, is also a real family business and that not only evokes recognition, but also creates a better bond of trust. We are very happy with this cooperation. Esmée is looking forward to working with Sudhir Power in the coming years to gradually build a cleaner living environment in India. "For example by helping more schools to turn their squares into safe playgrounds or to improve the situation in the Indian streets a little by further implementing our Lungs of the City concept. Hopefully, in the longer term, we will also see the first smog towers rising in Indian cities."