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Business News/ Opinion / Views/  Germany can soon be one of India’s top trade partners

Germany can soon be one of India’s top trade partners

Ties between India and Germany have been strengthening over the years but there is still vast scope in varied spheres including business for both countries to collaborate for mutual gains

Photo: Mint Premium
Photo: Mint 

There’s a lot that unites India and Germany. Both are leading democracies and share a passion for liberal thought, ingenuity and social inclusivity. The land of Beethoven, Karl Marx, Nietzsche and Schopenhauer stands out for its pursuit of excellence in automotive design, engineering, electronics, culture and the arts. Just as Indians are wowed by the open-air concerts, exhibitions, architecture and heritage walks of Germany, Bollywood is among India’s biggest cultural exports to the EU country. Traditional healing practices appeal to people in both countries. Germany and India have pacts to promote ayurveda, yoga and naturopathy, unani, siddha and homoeopathy (Ayush). According to a study by market research institute Gesellschaft für Konsumforschung, there are over 3 million yoga practitioners in Germany.

To appreciate Germany’s brand essence, we need to understand what has gone into creating its position of leadership. Battered by two World Wars, it was Germany’s resilience and a work-focused culture that placed it in the global spotlight. To bounce back from covid disruptions, aspirations will need to be aligned with resilience, and collaborations between the two countries could open up new revenue streams and boost economic recoveries.

Though India and Germany have a trade history of over 500 years, this year marks 66 years of AHK Indien, the Indo-German Chamber of Commerce (IGCC), and we look forward to new ways to enhance cooperation between the two. More than 1,800 German companies have business relations with India, the majority of which have subsidiaries or joint ventures. Germany has been the 7th largest foreign direct investor in India since January 2000. German FDI in India from April 2000 to September 2021 stood at $13.4 billion. There are more than 1,600 Indo-German collaborations and over 600 Indo-German joint ventures in operation. German firms have created hundreds of thousands of job opportunities in India. Nearly 565 Indian companies are in Germany and they have added to its growth story.

Despite the pandemic, Indo-German trade increased by 19% in the first 11 months of 2021 over 2020. Germany is India’s 6th largest trade partner. Among the significant Indian exports to Germany are chemicals, textiles, apparel and machinery. Important German imports to India include machinery, vehicles and chemicals. Bilateral ties are on the upswing in almost every area.

Prime Minister Narendra Modi and German Chancellor Olaf Scholz have sought to deepen mutual ties. The two countries have pacts on metros, Namami Gange, green transmission lines, smart cities, high-speed railways and solar rooftop projects. The two leaders have agreed to diversify bilateral cooperation and to focus on collaborations for climate action and green energy. The importance of the relationship is highlighted in the ‘Indo-Pacific Guidelines’ adopted by the German government in September 2020, covering various avenues from security to open trade and sustainability.

Technology expertise has always been the hallmark of German companies, with top brands like Mercedes-Benz, Volkswagen, BMW, Bosch and Siemens and more. Both countries are poised to drive further cutting-edge innovation. The High Technology Partnership Group plays a major role in developing international supply chains and boosting cyber security, both vital to growth.

At the IGCC, we work closely with the embassy and general consulates as well as other government entities like the Federal Corporation for International Cooperation (GIZ) and German Trade and Invest (GTAI) to strengthen bilateral ties. Germany is looking for skilled migration and that’s a big zone of opportunity for Indians. The IGCC helps firms spot and train talent. Various programmes have been set up to facilitate business opportunities in India, such as the Fast-Track-System for German companies or the Make-in-India Mittelstand programme.

Over the years, bilateral trade has been increasing, and new business opportunities are being discovered. Going by current trends, IGCC believes that Germany will soon emerge among India’s top three trade partners. The exchange of know-how and talent, especially, is expected to deliver transformational change, propelling greater growth. The German government provides funds of around €1 billion each year for economic cooperation with India.

German universities already attract the highest number of Indian students among European countries. Besides world-class education, Indian students have multiple work opportunities in an ecosystem that welcomes diversity and encourages critical thinking. The cultural salad bowl of Germany deserves special mention. Germany offers a host of activities for Indian travellers, more than 25,000 castles, assorted nature trails, harbour towns, and a wide range of culinary and hospitality experiences.

Covid has exposed the fragility of the world to force-majeure events. There is an African proverb that if you want to go fast, go alone, but if you want to go far, go together. The shared interests of Germany and India in a multipolar global order, with a panoply of ties across culture, trade, education, technology, commerce and climate action, could help usher in even better economic growth as we all move to build back.

Puneet Chhatwal & Stefan Halusa are, respectively, president, Indo German Chamber of Commerce, managing director and chief executive officer, Indian Hotels Company; and director-general, Indo German Chamber of Commerce

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Published: 24 Feb 2022, 10:26 PM IST
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