Silicon Bonds

As global chip wars intensify, India and the Netherlands deepen ties in a critical technological frontier.

Despite Netherlands’ Minister of Foreign Affairs, Caspar Veldkamp’s India visit lasting barely 26 hours, it signified more than the routine diplomacy of a first-time official tour. For the Netherlands, more than just another European trading partner, is a critical player in the global semiconductor industry. It is home to ASML, the world’s only producer of extreme ultraviolet (EUV) lithography machines, essential for making advanced chips. Against the backdrop of escalating geopolitical tensions in the semiconductor race, India’s move to strengthen ties with the Dutch is both timely and strategic.

For decades, India and the Netherlands have shared a robust relationship, rooted in trade, investment and historical ties that date back to the 17th century when the Dutch East India Company was active in Indian ports. Today, the Netherlands is India’s fourth-largest foreign direct investor and one of its most reliable economic partners in Europe. But this visit marks a shift towards a more high-tech partnership which would position India as a major hub for semiconductor manufacturing and research.

The announcement that India and the Netherlands will sign a memorandum of understanding (MoU) on semiconductors in 2025 signals the growing convergence of interests. India, under its ‘Make in India’ and ‘Digital India’ initiatives, has been aggressively courting semiconductor investments, keen to establish itself as an alternative to China and Taiwan in the global supply chain. The Netherlands, with its cutting-edge expertise in chipmaking machinery and microelectronics, is a natural partner in this endeavour.

The urgency of semiconductor self-reliance has never been more pronounced. The global chip war, triggered by US-China tensions, export restrictions and the quest for technological supremacy, has left nations scrambling to secure their semiconductor supply chains. The United States has imposed sweeping bans on China’s access to advanced chips and manufacturing technology, effectively cutting Beijing off from Dutch-made EUV lithography machines. Washington has lobbied its allies, including the Netherlands, to align with its stance on restricting China’s chip ambitions. In this fragmented landscape, India emerges as a stable, democratic alternative for semiconductor production.

This fact was acknowledged by Veldkamp when he called India a “safe place” for semiconductor and critical technology manufacturing.

Europe, too, is recalibrating its approach to economic and technological partnerships. The European Union’s ‘Chips Act’ aims to reduce reliance on Asian manufacturing hubs (China and Taiwan) and India, positioned as a rising semiconductor player, fits neatly into the EU’s diversification strategy.

The proposed India-Netherlands MoU aligns with the broader India-EU relationship, which has seen renewed momentum in recent years. Trade negotiations between New Delhi and Brussels have intensified, with a focus on technology transfers, digital trade and industrial cooperation.

For India, partnering with the Netherlands could be a gateway to deeper engagement with Europe’s tech ecosystem. Dutch expertise in semiconductor R&D, along with India’s growing prowess in chip design and manufacturing incentives, could create a symbiotic relationship that strengthens both nations’ positions in the global semiconductor race. ASML’s technology, though heavily restricted due to US-led controls, remains crucial for future collaborations in semiconductor innovation. While India may not yet be a player in high-end chip fabrication, strategic partnerships with Dutch firms could accelerate its ambitions to build a robust semiconductor supply chain.

However, the semiconductor industry requires substantial capital investment, skilled labour and uninterrupted access to raw materials - factors that India is still working to refine. The success of the India-Netherlands partnership will depend on New Delhi’s ability to provide a conducive environment for chipmakers, as well as the Netherlands’ willingness to deepen technological cooperation without geopolitical constraints.

The global semiconductor war today is no longer just about technology but about alliances, supply chain security and economic resilience. By forging stronger ties with the Netherlands, India is not just securing its chip future but also announcing its intent to be a key player in the world’s next industrial revolution.