Germany and India moving closer
Opportunities for Indian Companies in Germany
The selection of German chancellor Angela Merkel for the "Indira Gandhi Peace Prize" end of 2013 showed the current strengthening of ties between India and Germany. Building on the back of a relatively modest predicted 5% economic growth for 2013, India’s businesses, especially in the IT sector, are cautiously looking abroad for both export market and location potential, with Germany very much in sights.
The fourth-largest economy in the world with a GDP of $3.5tn, Germany is India’s biggest trading partner in Europe, the fifth-biggest trading partner for India globally, and second-biggest partner in technological collaborations. It’s a trading relationship that stretches back nearly five centuries.
Several Indian companies, such as "Suzlon", "Bharat Forge", "Geometric" and "Mahindra & Mahindra" have made substantial investments in Germany. A study by Hamburg Technical University estimates that Indian corporate entities had invested over $6.1 bn (4.7 bn Euros) in Germany up to September 2011. More than 215 Indian companies operate in Germany. Meanwhile, there were 77 FDI projects in Germany from India between 2008 and 2012 and there’s been a 60% rise in Indian FDI stocks in Germany during that time. Besides the German southwest, especially Berlin, the capital, is experiencing a start-up boom. A healthy investment in infrastructure has created a zone perfect for many industries, but the IT industry in particular. Energy, metals and raw materials, and the automobile and machine-building industries are not far behind. This is good news for India, whose IT sector accounts for 25% of all foreign direct investment in Germany on the back of a recent sharp rise.
Mr. B. Ashok Reddy, President of "Infotech Enterprises", Mr. Bhanu Cherukuri, CEO of "Infotech Software Solutions" and Mr. T Muthu Velan, Managing Director of "Nihon Technology GmbH" – both IT sector companies – recounted in Hyderabad their companies’ successful investments in Leonberg and Frankfurt (around 100 Kilometers away from Karlsruhe) respectively, while Dr. Rainer Müller, Senior Manager of "Nanotechnology" at Germany Trade & Invest, presented an update on Germany’s investment climate in the high-tech market. “India’s likely future economic strategy will include an emphasis on internationalization,” said Peter Alltschekow, Head of New Federal States at Germany Trade & Invest, who gave a presentation ‘Tapping Opportunities in Eastern Germany’: "This is where we believe we present India with a big opportunity. Germany’s standing in Europe in India’s key internationalizing industries, coupled with unmatchable investment conditions in Europe’s most robust economy, presents a perfect opportunity for Indian companies to place themselves in the vast European business landscape.”