The Indian government renamed this decade as ‘The Decade of Innovation’. Furthermore, interest in smart, technological solutions is high in many sectors in India. The horticultural sector is a good example of this. To succeed as a company in India you have to be physically present. ‘Seeing is believing’ is the motto and that certainly applies to expensive technology. A difficult assignment for Dutch companies that want to enter the Indian market with their high-quality technological products and machines. The Dutch government recognizes this challenge. Therefore, it gives Dutch SMEs the opportunity to take the first steps by supporting the so-called DHI subsidy.
DHI subsidy: stimulating internationalization
The purpose of the DHI subsidy is to strengthen the number of Dutch companies that will successfully trade abroad. That success stands and falls with good preparation. That includes investigating at an early stage whether an export or investment project is feasible. Or, to demonstrate that a specific export product or technology is applicable. An important condition of the scheme is that the activities make a positive contribution to the sustainable, local development of the DGGF countries. These are developing countries that fall under the Dutch Good Growth Fund, India is one of them.
The DHI scheme allows 3 types of projects to be set up, subject to the following conditions:
- Demonstration project: demonstrating a Dutch product, technology or service within a real practical situation to the widest possible group of customers. The technology, product or service must be new to the market in the country where you want to start. It is not the intention that the technology will be presented at a trade fair. Furthermore, the exhibition of a machine, for example, is therefore not covered by the DHI scheme. Finally, the expected export within 3 years must be at least 5 times the subsidy amount.
- Feasibility study: The initiative lies with the foreign partner with whom you will collaborate. The partner is interested in the technology, product or service of the Dutch company. A feasibility study examines whether the purchase is feasible and whether the investment can be recouped within the desired period. A feasibility study should not be market research, for the study there is already sufficient clarity about the size of the market, the intended design of the project, the location, the operation, the financing and the local impact.
- Investment preparation project: Based on this project, the decision is made to actually invest in one of the DHI countries. For example, a new production or service facility is being set up in the target country, or the existing facility is being expanded. This can be a subsidiary, but also a joint venture. However, it should not be a sales office. The company must already carry out substantial activities in the Netherlands. Moreover, the investment abroad must logically result from the current activities, core business and strategy.
Four million euros available for DGGF countries
In 2020, a budget of 4 million euros will be available for activities in DGGF countries, including India. To participate, the eligible costs per project must be at least 50,000 euros. The subsidy percentage depends on the chosen target country. Normally, the subsidy amounts to 50% of the eligible costs. The proposal must also meet substantive conditions.
Take the first steps in India with confidence
So do you want to demonstrate new technology, machine or service in India? Do you want to research the commercial or technical feasibility of a specific project in India? Or are you considering investing in a factory, a joint venture or a local office in India? Then you might be eligible for a DHI subsidy. We are happy to discuss all financing options for your market entrance in India with you. Then do not hesitate to contact us!