2024 marks a significant turning point in the bilateral relationship between India and Belgium as the two nations explore new avenues for cooperation, focusing on semiconductors, green growth, and the diamond industry.
Theodora Gentzis, Secretary-General of the Belgian Ministry of Foreign Affairs, met with India’s External Affairs Minister, S. Jaishankar, in New Delhi. Their discussions emphasized bolstering collaboration in cutting-edge sectors like semiconductors, and renewable energy, and addressing concerns in the diamond trade, which forms the backbone of their economic partnership. This dialogue marks an evolution in the India-Belgium partnership, positioning both nations to tackle emerging global challenges, from technological transformation to sustainable development.
The meeting followed a telephonic conversation on March 26, 2024, between Belgian Prime Minister Alexander De Croo and Indian Prime Minister Narendra Modi, during which they underscored opportunities in pharmaceuticals, semiconductors, and green hydrogen. The Belgian Prime Minister also announced a royal trade mission to India, signaling Belgium’s growing interest in deepening trade and investment links with India. Both countries are prioritizing sectors vital to the global economy. Semiconductors, critical to everything from consumer electronics to defense systems, have emerged as a key area of collaboration. The COVID-19 pandemic exposed vulnerabilities in global semiconductor supply chains, making it a strategic priority for both India and Belgium. As a leader in microchip manufacturing in Europe, Belgium’s experience could help India establish its own semiconductor ecosystem, contributing to the global semiconductor supply chain and promoting self-reliance.
In addition to semiconductors, green growth is another core focus. Both nations share a commitment to transitioning towards renewable energy, with green hydrogen emerging as a promising sector for investment and collaboration. Belgium, known for its leadership in clean technologies, aims to leverage India’s growing expertise and market potential to push forward green hydrogen projects and renewable energy solutions.
India-Belgium Diamond Trade: A Pillar of Economic Ties
The diamond trade remains a cornerstone of India-Belgium relations. Antwerp, Belgium, is a global hub for diamonds, and India is one of the largest exporters of polished diamonds. The pandemic disrupted the diamond trade between the two countries, leading to a drop in exports, but it is steadily recovering. In 2022, bilateral trade in goods reached €15.1 billion, largely driven by diamonds. The April 2024 talks also addressed challenges facing the diamond industry, as both nations seek to revitalize and modernize this sector. Discussions are ongoing to ensure that the diamond trade remains resilient and adapts to evolving market conditions, including the rising demand for ethically sourced and sustainable diamonds.
A crucial outcome of the recent diplomatic exchanges was the decision to expedite the finalization of a Migration and Mobility Partnership Agreement. This agreement, discussed during the second India-Belgium Foreign Office Consultations in New Delhi, is expected to streamline the movement of professionals, students, and skilled workers between the two countries, boosting economic and cultural exchanges. Education is another growing area of collaboration, with multiple Memoranda of Understanding (MoUs) signed between Indian and Belgian universities. These agreements facilitate academic exchanges, joint research, and collaboration in fields such as science and technology, nuclear research, and space exploration.
Belgium, holding the presidency of the Council of the European Union in 2024, has also reaffirmed its support for strengthening the India-EU Strategic Partnership. Both India and Belgium are keen on finalizing a mutually beneficial India-EU Free Trade Agreement (FTA), which would significantly boost trade and investment flows between India and the EU, further integrating India into global markets. Belgium has played a key role in championing India’s interests within the EU, particularly in promoting economic reforms, greater market access, and cooperation on global issues such as climate change, sustainable development, and multilateral governance. In recent talks, cyber technology, UNSC reforms, and science and technology cooperation were also highlighted as priority areas for future collaboration.
Belgium remains a significant investor in India, with Foreign Direct Investment (FDI) totaling US$2.763 billion from April 2000 to December 2022. Key areas of investment include pharmaceuticals, chemicals, technology, and renewable energy. Trade between the two nations has shown resilience despite global economic fluctuations. In 2023, India’s exports to Belgium fell by 22.1 percent due to lower values in precious metals and chemicals. However, there was notable growth in the trade of artificial jewellery and mineral products. Belgium is one of India’s top trading partners in the EU, with bilateral trade dominated by diamonds, machinery, chemicals, and precious metals.
Despite the strong trade relations, analysts have highlighted untapped trade potential between India and Belgium. An industry assessment suggests that Belgium presents a promising yet underutilized market for India’s exports, particularly in sectors such as intermediate and consumer goods, telecommunications, and IT services. As India aims for ambitious export targets, including a US$2 trillion export goal by 2030, Belgium is seen as a key partner in achieving this growth. To unlock this potential, both countries will need to focus on reducing non-tariff barriers, enhancing technology transfer, and maximizing the benefits of existing trade agreements like the India-Belgium Double Taxation Avoidance Agreement (DTAA), which helps businesses avoid being taxed twice on the same income.
As India and Belgium continue to deepen their bilateral relations, there is a clear focus on emerging technologies, green energy, and resilient trade practices. With the backing of the EU and mutual interest in sectors like semiconductors and renewable energy, the two nations are well-positioned to navigate the challenges of the 21st century together. Their shared commitment to innovation, sustainability, and strategic economic partnerships will be key drivers of this growing relationship in the years to come.
