Berlin seeks to lure Indian investors to Germany's eastern half 03/04/2008 00:00

Report fails to mention attacks safety concerns for foreigners in the country’s eastern part.

Report fails to mention attacks on foreigners in the country’s eastern part.

Berlin -- Berlin hopes to draw investors from India's booming economy to carve out new businesses in Germany's eastern half with the release of a report Wednesday promoting investment in the former communist German state.

"Promoting investment in India is worth the effort," said German Transport Minister Wolfgang Tiefensee releasing the report, East Germany as a place for direct Indian investment, which was drawn up by the accounting house, KPMG.

Tiefensee is also the German minister responsible for overseeing the development of eastern Germany, which emerged in 1989 from decades of communist rule following the fall of the Berlin Wall.

Since then, the so-called five new states, which were previously part of communist East Germany, have struggled to find their economic footing and to rebuild their industrial base.

"The Indian economy booms and the new states are appearing increasingly attractive to Indian companies," said Tiefensee.

"We are using this dynamic to help win investors for East Germany," he said.

Essentially this involves drawing up a clear and comprehensive presentation for Indian companies of eastern Germany as a place to invest, the report said.

"While India has been developing into a key destination for foreign investment, foreign direct investment by Indian companies already overtook investment flowing into India in 2007," said the report.

Apart from a recently built ultra-modern infrastructure, eastern Germany offers a large pool of skilled employees as well as considerably lower labor costs compared with other western countries, the KPMG report said.

Moreover, Germany offers state investment aid program for its eastern half, which is located between western and eastern Europe, said the report.

In the coming weeks, a delegation from Tiefensee's ministry is to join two investment events in New Delhi and Mumbai.

"Indian investors, who are interested in the European market, have given priority to industry branches which East Germany offers particular advantages as a place to invest," said Tiefensee.

This includes the IT sector as well as the chemical branch along with the car and mechanical engineering industries. This also includes the renewable energy sector. "These are the industries of the future," said Tiefensee.

DPA with Expatica