Belgian Companies in India: Diamond Trade, Chemicals & Bilateral Opportunities

Belgium-India Trade: A USD 18 Billion Relationship

Belgium is India's fifth-largest trading partner within the European Union, with bilateral trade reaching approximately USD 18.04 billion in FY 2023-24. The trade relationship is distinctive: diamonds alone account for over 60% of the total bilateral trade value, making this one of the most sector-concentrated bilateral trade corridors in the world.

Cumulative foreign direct investment from Belgium to India between April 2000 and March 2025 stands at USD 4.02 billion, with a notable 39% growth (USD 1.1 billion) in the most recent year alone. This acceleration reflects growing Belgian confidence in India as a manufacturing base, a technology hub, and a consumer market.

The March 2025 Belgian Economic Mission to India — led by HRH Princess Astrid along with Deputy Prime Minister Maxime Prevot and Defence Minister Theo Francken — included over 330 delegates and resulted in 37 bilateral agreements spanning climate and renewable energy, healthcare, advanced materials, transport, aerospace, and defence. This is not a declining relationship — it is actively expanding beyond its traditional diamond core.

The Antwerp-Surat Diamond Corridor

How the World's Diamond Supply Chain Works

The diamond trade between Belgium and India is not merely commercial — it is structurally interlinked. Antwerp has been the world's diamond capital for over five centuries, handling roughly 80% of the world's rough diamond trade by value. India, primarily through Surat and Mumbai, processes approximately 90% of the world's diamonds by volume. These two poles of the global diamond industry are connected by a network of approximately 400 Indian diamond families who maintain operations in both Antwerp and India.

The pipeline works as follows: rough diamonds arrive in Antwerp for sorting, certification (through HRD Antwerp), and initial trading. A significant portion then moves to Surat, where over 700,000 workers cut and polish them. The finished stones return to Antwerp or move to other global markets for retail distribution.

Trade Numbers

In 2023, Belgium exported USD 1.78 billion worth of diamonds to India, while India exported USD 2.2 billion in diamonds to Belgium. Antwerp's total diamond trade value in 2025 was approximately USD 19.1 billion — a 22.4% decline year-on-year reflecting global demand softness, but India remained the single largest destination for Belgian diamond exports, comprising 58% of total unworked diamond exports.

The Surat Diamond Bourse

The opening of the Surat Diamond Bourse — the world's largest office building at 6.7 million square feet — marks India's strategic push to capture more of the diamond value chain beyond just cutting and polishing. For Belgian companies, this represents both a challenge (potential disintermediation) and an opportunity (partnering with Indian firms at a new, world-class trading infrastructure).

EU-India Trade Deal Impact

Under the emerging EU-India trade negotiations, India has reduced its tariff on imports of natural polished diamonds from the EU to 2.5%, down from 5.5%. This tariff reduction — achieved through intensive lobbying by the Antwerp World Diamond Centre (AWDC) — directly benefits Belgian diamond exporters and could further deepen the Antwerp-India trade corridor.

Belgian Chemical and Pharmaceutical Companies in India

Key Players

Belgium's chemical and pharmaceutical sector is deeply embedded in India, with several major companies maintaining significant operations:

India's chemical industry is projected to reach USD 300 billion by 2025-26, and Belgian companies are positioning to capture growth in specialty chemicals, advanced materials, and pharmaceutical ingredients. The chemical manufacturing regulatory framework in India requires navigating PESO licensing, environmental clearances, and sector-specific FDI rules.

FDI in Chemicals: What Belgian Companies Should Know

The chemicals sector permits 100% FDI under the automatic route, meaning no government approval is required for Belgian investments. However, hazardous chemical manufacturing requires additional clearances:

• PESO (Petroleum and Explosives Safety Organisation) licence for handling hazardous substances
• Environmental clearance from the Ministry of Environment under the EIA Notification, 2006
• State Pollution Control Board consent for establishment and operation
• Factory licence under the Factories Act, 1948

For a detailed breakdown of chemical manufacturing setup, see our guide on environmental clearance for chemical plants.

Pharmaceutical Sector Entry

India's pharmaceutical sector permits 100% FDI under the automatic route for greenfield projects. Brownfield (existing company acquisitions) investments up to 74% are permitted under the automatic route; beyond 74% requires government approval. Belgian pharma companies like UCB must also navigate CDSCO (Central Drugs Standard Control Organisation) approvals for clinical trials and product registrations.

India-Belgium DTAA: Tax Implications for Belgian Investors

The Double Taxation Avoidance Agreement between India and Belgium, originally signed on 26 April 1993, was significantly updated through an Amending Protocol that came into force on 26 June 2025. The updated treaty modernises the agreement in line with OECD/BEPS standards and strengthens anti-abuse provisions.

Key Withholding Tax Rates

The 2025 Protocol introduces several critical changes:

• Principal Purpose Test (PPT): Benefits will be denied if one of the principal purposes of a transaction was to obtain treaty benefits (anti-treaty shopping).
• Updated Permanent Establishment definition: Aligned with the OECD Model Convention to prevent artificial avoidance of PE status.
• Exchange of Information: Enhanced provisions for automatic exchange of financial account information.
• Dispute Resolution: Strengthened Mutual Agreement Procedure (MAP) provisions for resolving cross-border tax disputes.

Belgian companies must obtain a Tax Residency Certificate (TRC) from Belgian tax authorities and file Form 15CA/15CB for every outward remittance from India to claim DTAA benefits. Our tax advisory services cover DTAA structuring for Belgian investments.

Entity Structure Options for Belgian Companies

Belgian companies entering India typically choose one of three structures:

Wholly Owned Subsidiary (Most Common)

A wholly owned subsidiary registered as a private limited company is the preferred structure for Belgian companies making a long-term commitment to India. This provides full operational control, limited liability, and the ability to raise capital locally. Registration takes 3-6 weeks through the SPICe+ portal.

Branch Office

A branch office is suitable for Belgian companies that want to execute specific projects or represent the parent company without forming a separate legal entity. Branch offices require RBI approval and cannot engage in manufacturing or processing activities. For a detailed comparison, see our branch office vs subsidiary analysis.

Liaison Office

A liaison office serves as a communication channel between the Belgian parent and Indian customers or suppliers. It cannot earn income in India and is limited to representational activities. This is often used by Belgian diamond firms establishing initial market presence before committing to a full subsidiary.

Belgian Companies Already Operating in India: Case Patterns

Understanding how existing Belgian companies have structured their India operations provides a practical blueprint for new entrants. The patterns vary significantly by sector.

Diamond Sector: Trading and Liaison Model

Belgian diamond companies typically establish liaison offices in Mumbai (for the Bharat Diamond Bourse) and Surat (for direct access to cutting and polishing operations). Some larger firms have evolved to wholly owned subsidiaries to enable direct buying and selling, particularly as the Surat Diamond Bourse opens new trading possibilities. The key compliance requirement is FEMA compliance for cross-border diamond consignment movements and ensuring proper customs documentation under HS Code 7102-7104.

Chemical Sector: Manufacturing Subsidiaries

Solvay's India operations demonstrate the typical chemical company approach — establishing manufacturing subsidiaries in Gujarat's chemical corridor (Ankleshwar-Vapi-Vadodara) where the raw material supply chain, skilled chemical engineering workforce, and port connectivity converge. Belgian chemical companies operating in India report that the critical success factor is not the FDI process (which is straightforward under the automatic route) but rather navigating the environmental clearance and PESO licensing timeline, which can extend to 6-12 months.

Pharma and Biotech: Clinical Research and Commercial

UCB and other Belgian pharma companies maintain dual operations: clinical research teams (often in Hyderabad or Bengaluru, near India's clinical research organisations) and commercial operations (typically headquartered in Mumbai). The pharma sector benefits from India's large patient population for clinical trials and the growing domestic market for specialty medicines.

Technology and Advanced Materials

Bekaert's manufacturing plants in Pune reflect a pattern where Belgian advanced manufacturing companies locate near India's automotive and engineering clusters to serve local OEMs. The proximity to Pune's engineering talent pool — both for factory operations and for R&D — makes western Maharashtra the preferred location for this segment. For companies evaluating state-level incentives, see our analysis of 8 Indian states competing for foreign investment.

Sector-Specific Opportunities for Belgian Companies in 2026

Renewable Energy and Cleantech

Belgium's expertise in hydrogen technology, solar panel manufacturing, and energy storage aligns with India's aggressive clean energy targets — 500 GW of renewable capacity by 2030. The March 2025 bilateral agreements specifically included climate and renewable energy cooperation.

Advanced Materials and Steel Technology

Bekaert's presence in India demonstrates the opportunity in advanced steel and wire technology. India's National Steel Policy targets 300 million tonnes of production capacity by 2030, creating demand for Belgian advanced manufacturing technologies.

Port and Logistics Infrastructure

Antwerp, Europe's second-largest port, and India's rapidly growing port infrastructure (particularly Mundra, JNPT, and Chennai) create natural logistics partnerships. Belgian port management expertise is increasingly relevant as India invests USD 82 billion in port modernisation under the Sagarmala programme.

Defence and Aerospace

The March 2025 mission included Defence Minister Theo Francken, reflecting growing defence cooperation. India permits 74% FDI under the automatic route and 100% with government approval in defence manufacturing. Belgian companies with dual-use technology capabilities can explore partnerships under the Make in India defence initiative.

Practical Steps for Belgian Companies Entering India

1. Verify FDI eligibility: Most sectors permit 100% Belgian FDI under the automatic route. Check the latest DPIIT Consolidated FDI Policy for your specific sector. Our FDI advisory service provides sector-specific guidance.
2. Choose your structure: For most Belgian companies, a private limited subsidiary is optimal. Diamond traders may start with a liaison office.
3. Appoint a resident director: Every Indian company requires at least one resident director who has spent 182+ days in India during the financial year.
4. Open a bank account: Indian banks typically require INR 1 lakh minimum deposit. International banks with Belgian branches (BNP Paribas Fortis, ING, KBC) may offer smoother KYC processes.
5. File FC-GPR: Report the foreign investment to the RBI within 30 days of share allotment via Form FC-GPR.
6. Register for GST: GST registration is mandatory if your turnover exceeds INR 40 lakh (INR 20 lakh for services in special category states).
7. Comply with FEMA: All cross-border transactions must comply with FEMA regulations. Annual FLA returns are mandatory for entities with foreign investment.

For country-specific registration guidance, see our Belgium country guide.

Financing and Banking Considerations

Belgian companies funding their Indian subsidiaries can use equity infusion (most common for initial capitalisation), external commercial borrowings (ECBs) for ongoing working capital needs, or intercompany trade credit. The RBI's ECB framework permits automatic route borrowings up to USD 750 million per financial year, subject to an all-in-cost ceiling linked to the benchmark rate plus a spread. Belgian parent companies should structure their funding mix to optimise for withholding tax efficiency under the DTAA — interest payments from India to Belgium attract only 10% withholding tax versus 20% without treaty benefits.

Key Takeaways

• Belgium-India bilateral trade exceeds USD 18 billion, with diamonds comprising over 60% — but the relationship is rapidly diversifying into chemicals, pharma, cleantech, and defence.
• Belgian FDI in India totals USD 4.02 billion (April 2000 to March 2025), with 39% growth in the most recent year, reflecting accelerating investment momentum.
• The updated India-Belgium DTAA (Protocol effective June 2025) offers 10-15% withholding tax rates on interest, royalties, and technical service fees, with modernised anti-abuse provisions.
• 100% FDI is permitted under the automatic route in most sectors relevant to Belgian companies — chemicals, pharmaceuticals (greenfield), technology, and services.
• Belgian companies should engage a qualified CS and CA from day one to navigate FEMA, transfer pricing, and GST compliance requirements specific to foreign-owned entities.