India, Germany aim to forge closer business ties
20 April 2006, BERLIN/NEW DELHI - Indian Prime Minister Manmohan Singh begins a visit to Germany this weekend which will mark another major step by Europe's biggest economy to broaden its Asian business empire through closer ties with the world's second-fastest growing economy.
20 April 2006
BERLIN/NEW DELHI - Indian Prime Minister Manmohan Singh begins a visit to Germany this weekend which will mark another major step by Europe's biggest economy to broaden its Asian business empire through closer ties with the world's second-fastest growing economy.
At the same time, India is hoping that Singh's four-day visit and the nation's key role at this month's Hanover trade fair will help Indian business to further cash in on fast-paced globalisation and to forge a higher profile in the world economy.
"Indo-German investment and trade is reaching new heights, though the potential has still to be fully tapped," Ajay Singha, deputy director general, Indo-German Chamber of Commerce (IGCC), told Deutsche Presse-Agentur.
While bilateral trade has grown rapidly since 2004 and is expected to top 10 billion euros (12.3 billion dollars) by the end of next year, Germany's trade with India still lags far behind the nation's trade with other emerging economies.
"India will be an increasingly important trading partner for Germany," said German Industry Federation (BDI) chief executive Ludolf von Wartenberg ahead of Singh's visit to Germany.
A key part of Singh's visit to Germany will be to jointly open Sunday with German Chancellor Angela Merkel the Hanover Fair, which is the world's biggest industrial and technology jamboree.
India is the fair's partner country this year with Merkel and Singh also expected to attend an India-German Business summit in Hanover on Monday.
As further evidence of Germany's attempts to boost ties with India, Frankfurt Book Fair has selected India to be guest of honour at what is one of the key events on the world publishing industry's annual calendar.
The book fair, which is to be held in October, will give India the chance to showcase its rapidly changing cultural and intellectual life.
In the meantime, India is planning to mount an unprecedented presence at the Hanover fair with 341 Indian companies displaying their products in 11,500 square metres.
This includes several of India's leading companies such as Ashok Leyland, Thermax and Kirloskar Oil Engines Ltd, Mahindra & Mahindra, Godrej and Boyce. A total number of 5175 companies from 66 nations are to be represented at the Hanover fair.
India's Commerce Minister Kamal Nath said India's technological prowess will be on display at the fair, describing it as the "single biggest brand-building exercise" for Indian manufacturing, engineering and related technologies.
On display at the fair will be ground-breaking innovations in diverse fields including process automation, factory automation, industrial building automation, energy, pipeline technology and subcontracting, Nath added.
Boosting ties with India and the world's other fast-growing economies in particular through the sale of infrastructure goods can also help Germany to offset the mediocre economic growth rates recorded by the country and its European partners in recent years.
Despite signs that Germany is emerging from a protracted period of stagnation, the most optimistic forecasts for the nation are for a growth rate this year of about two per cent, which falls well short of the robust expansion rates chalked up by India. Over the last three years India's growth has averaged seven per cent.
India had captured the attention of Germany soon after it embarked on economic liberalization in the 1990s but the focus steadily shifted to the booming Chinese economy.
However, the past months have seen German firms reaffirming their faith in the Indian market.
A huge and growing market, a large pool of skilled workers and opportunities for cost reduction make India an attractive proposition for the European industrial powerhouse.
Underscoring the potential for business growth, Germany is India's fourth largest trading partner but India is a distant 35th trading partner for Germany and bilateral trade accounts for less than half a per cent of Germany's total trade.
Corporate Germany has already invested a total of about 1.65 billion dollars in India with some of the leading names in German industry such as software giant SAP AG and transatlantic carmaker DaimlerChrysler AG moving to establish business beachheads in India.
Munich-based luxury auto-maker BMW is currently setting up an operation with the capacity to manufacture 1,700 cars annually on a one-shift basis. Auto-ancillary giant, Bosch is keen to boost its presence in India and is planning a 224 million dollars investment in the nation.
According to German media reports Merkel is also expected to press Singh to consider buying the Eurofighter combat aircraft during their talks next week.
Last year about 70 small-and-medium sized German companies visited India last year to size up business opportunities and to forge new links with Indian firms.
Indian companies which are making a spirited effort to go global are focusing on Germany as well.
In February, India's second-largest drugmaker, Dr Reddy's Laboratories, acquired Germany's Betapharm Group for 570 million dollars, making it the biggest acquisition by an Indian drug firm.
Subject: German news