Stating that India’s presence as a Partner Country in Hannover marks the renewal of its strong and robust relations with Germany, Mr. Kamal Nath, Minister of Commerce and Industry, Government of India, today called for giving a big push to expanding the economic dimension of Indo-German relations. The foundation of mutually beneficial commercial relations between the two countries lies in leveraging both the countries’ inherent manufacturing strengths, he said while addressing the second session of the Indo-German Business Summit today at the Hannover Fair, which was inaugurated last evening by the Prime Minister of India Dr. Manmohan Singh and the German Chancellor, Dr. Angela Merkel.
"The strongest endorsement of India’s emerging potential as the next global manufacturing champion comes from the fact that today approximately 80% of all German investors present in India are manufacturing firms – all of them world leaders in their field – mostly from the electronics and electrical sectors, chemicals&mechanical engineering and auto components. Daimler Chrysler, Siemens, Bayer, BASF, Robert Bosch, Allianz, Thyssen Krupp and SAP come to mind”, the Minister said, adding that the relationship was about to enter a new phase as Indian companies with new-found confidence in their competitive strengths were also increasingly looking at Germany as a base for value-added operations.
The potential areas of Indo-German cooperation outlined by Mr. Kamal Nath include telecom, engineering, environmental technology, chemicals, pharmaceuticals and food processing, besides renewable sources of energy where India could benefit in particular from German expertise in wind energy technology. “Closer state-to-state relations between the Indian and German provinces would help in providing a boost to our economic ties”, he said, in a reference to the participation of several Indian states in the Hannover Fair including Jharkhand, Karnataka, Orissa and West Bengal.
Small & Medium Enterprises (SMEs) of India and Germany could cooperate in particular in the fields of auto-components, machine and hand tools, toys and pharmaceuticals, he said. Further, with increasing concern about environmental sustainability, “there is a huge opportunity for strengthening Indo-German ‘green business’ relations in the areas of dye and dye intermediaries, textiles, chemicals and waste utilization technologies”, he stressed.
Referring to the increasing stringency of standards and complex rules and procedures in the European Union (EU) which acted as non-tariff barriers (NTBs) to trade, Mr. Kamal Nath sought the cooperation and support of Germany – India’s largest trading partner in Europe along with the UK and Belgium – in settling the issues of various NTBs that Indian exporters had been facing in the EU.
Bilateral trade and investment
India’s trade with Germany in 2004-05 stood at US $ 6.5 billion, indicating a robust growth of nearly 20%.
India’s exports to Germany were US $ 2.64 billion while India’s imports from Germany were US $ 3.86 billion.
Bilateral trade has been growing at a record 20% for the past 3 years.
The inflow of total German FDI into India (1991-December 2005) at US $ 1.34 billion has been less than one and a half billion dollars.
There are more than 600 German companies operating in India and an increasing number of Indian companies investing in Germany.
The actual figures of FDI inflows, therefore, do not reflect the synergies and complementarities of the two economies.
India has emerged as one of the largest consumer markets in the world, making it one of the most attractive investment destinations.