India and Germany have become partners of choice: India Inc. Interview with Gurjit Singh
Cooperation between the Indian and German SME sectors can transform economic relations and overall ties between the two countries, Indian ambassador to Germany Gurjit Singh tells ′India Global Business′ in this exclusive interview.
How would you categorise Indo-German ties Bilateral relations between India and Germany have been growing. We have a strategic partnership and we are building on our growing convergence on a wide range of issues and on the complementarities between the two economies. Last year (2015) was one of high level engagements between India and Germany. We are (in cricketing terms), are on a good wicket. Prime Minister Narendra Modi made a path-breaking visit to Germany in April 2015. At that time India was the Partner Country at the Hannover Messe. In October, German Chancellor Angela Merkel made an official visit to India for the unique Inter-Governmental Consultations. Our leaders met twice last year. Several ministerial visits also took place. Fifteen years into the strategic partnership, Indo-German cooperation is founded on common democratic principles, marked by trust and mutual respect and geared towards building stability, prosperity and sustainable development through closer dialogue and cooperation in security, enhanced trade and investment, partnerships in manufacturing, skilling, clean energy, infrastructure, innovation and education. Given the fast growing bilateral engagements, closer economic co-operation, technology exchanges, people to people contact, skill development, academic and scientific research, India and Germany have become partners of choice.
What kind of presence do Indian companies have in Germany While we think of Germany as a major source of FDI into India, Indian companies have made German mittelstand, or medium sized firms, a major acquisition target. India is among the top acquirers from any emerging country and Indian companies have invested over well over $7 billion in Germany, mainly through M&As. As Germany's strength lies in its SMEs, Indian companies are increasingly acquiring promising German enterprises to gain access to the European market. There are more than 215 Indian companies operating in Germany, employing more than 26,000 employees. Indian firms have, in recent years, invested in German companies in the IT, automotive, wind energy, pharmaceuticals, biotechnology, machineries, electrics & electronics industries and business processes sectors. They are investing in Germany not merely to sell their goods and services but also to fill up gaps in their value chain by manufacturing goods and services locally, as well to engage in R&D and innovation activities. While earlier, Indian FDI was often motivated by the desire to be closer to the customer, resulting in an unusually high representation of Indian IT companies setting up onsite representations for outsourcing partners, there is now a growing and definite search for technology by manufacturing companies seeking customers across the globe. This is opening up a whole new arena for Indo-German collaboration.
What makes Germany a good destination for Indian investments/trade Germany ranks among the most attractive business locations in continental Europe and its business environment is very positive for FDI. Germany is India's largest trade partner in Europe and has consistently been among India's top 10 global trade partners. It is the eighth-largest foreign direct investor in India since January 2000. Germany remains attractive for its infrastructure (telecommunications and transport), workforce qualifications and the social climate. Indian firms are recognising the need for cutting-edge technologies and an innovative product portfolio in a competitive globalising world. Indian firms are actively making use of Germany's advanced engineering capabilities and technical infrastructure. India and Germany might be entering an era of “Indian Innovations, made in Germany”.
Which regions/sectors in Germany are keen on working closely with India The Government of India has embarked on a major goal to make India a manufacturing hub under the “Make in India” initiative. The Indian government has also initiated several major initiatives like Smart Cities Mission, Digital India Mission, Start-up India and the like. These new major national programmes hold substantial business opportunities for German companies. Germany's strength in the area of high technology manufacturing finds a suitable fit with India's current quest for up-scaling high technology manufacturing in India. Focus sectors under this include automotive & automotive components, heavy engineering including machine tools, railways and logistics, electrical and electronics, water, waste and renewable energy. Our government has opened up a large number of sectors for FDI. And huge opportunities also lie in these sectors for German companies in sectors such as insurance and defence production.
Focus SMEs There are also significant opportunities for German “Mittelstand” enterprises to expand their business opportunities in high-technology manufacturing in India. Our embassy in Berlin is running a unique “Make in India Mittelstand” programme since September 2015, which is an investment facilitation programme supported by (India's) Department of Industrial Policy and Promotion (DIPP) and the Investment & Technology Promotion (ITP) division of India′s Ministry of External Affairs to attract investments by German Mittelstand (SME) companies. Under this programme, German SMEs (Mittelstand) have committed an investment in India of over Euro 400 million for Make in India. The results achieved by the “Make in India Mittelstand” initiative in the first six months is quite significant as the Mittelstand companies are known to be cautious in their approach to investing in new markets. The early results show their confidence in the “Make in India Mittelstand” initiative and the significant impact that the “Make in India” programme has had in improving the investor perception in Germany. India's participation as Partner Country in Hannover Messe in 2015 in which Prime Minister Modi had taken the message of “Make in India” to German investors has generated significant interest among German companies to invest in India. The “Make in India Mittelstand” programme is helping translate that intent into investments through its facilitation efforts.
Skill development Areas of skill development and vocational training are also an extremely important area where India is working for greater engagement with Germany. Other priority areas for us are sustainable livelihood and clean environment. India wants to work closely with Germany on the common aim of developing climate-friendly, efficient and sustainable solutions for India′s expanding energy needs. Our focus will continue to be towards encouraging greater people-to-people contact, pursuing more research and academic exchanges and fostering greater cultural interaction and exposure.
What has been your personal highlight during this posting Germany is India's leading partner in Europe. My assignment here adds variety and experience. My first ambassadorial assignment was to Ethiopia and The African Union. The second to Indonesia and ASEAN, and now I am fortunate to be in the European Union′s largest country. There is an abiding cultural understanding of India in Germany with Indology and Indian art and cinema all being important bridges. This has been an important understanding for me. Similarly, the mutual economic relationship is another important manifestation of the Indo-German engagement. The political understanding between our leaderships and the great expectations that the political firmament in Berlin and the states has of our relationship, is another key focus area during my tenure. My greatest challenge is to promote more effective investment and technology transfers from Germany to India. Other major areas where I will focus are an enhancement of the perception of India in Germany and expansion of people-to-people interactions. A special effort is being made to engage with our diaspora, which is expanding and becoming more diverse. We have created new avenues of engagement, which include the Conference of Indian Diaspora Associations; the Indian Professionals Forum; Indian Students Connect Programme and the Indian Business Forum. With these steps, we hope to connect our passion and work with clear results and fulfilment of our objectives.
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