World Colleges Information

Indo-German ties, which have traditionally been close and amicable, are particularly characterised by intensive co-operation in the fields of economy. Indo-German economic relations have taken shape as early as the 19th century with first German companies like Krupp AG, Siemens and Bayer AG. Due to their high technological standards, efficient business, execution and long term commitment, German companies in India have earned themselves a good reputation.
 
India offers a huge potential for foreign trade and investments. India's democracy and market economy ensure a sound political system and legal framework, fundamentally strong micro economic structure, skilful entrepreneurs and brilliant engineers. But less than 1% of Germany's foreign trade is exchanged with India and India accumulates less than 1% of our investment. This means for India there is a huge untapped potential.
Germany stands among the top five trading partners of India. Total volume of trade between India and Germany recorded 8,1 billion DM in 2000 with Indian exports reaching 4, 4 billion DM and Indians imports recording 3, 7 billion DM.
 
Indo-German trade reached almost 9 billion DM in 1997 and Indian exports to Germany have shown a growth of close to 10% every year. This quick reaction to the economic reforms shows Germany's sustained interest and belief in the potential of this country. The continuation of the economic reforms will have positive effects on the bilateral relation. 
In 1998 Germany was India's fifths largest supplier, providing 7% of Indian imports and the third largest buyer absorbing 6% of Indian Exports. Among Germany's trading partners, India has 30th position in a world-wide ranking of suppliers and ranked 36th among buyers.
India's major exports to Germany normally consist of cotton garments and fabrics, leather and leather goods, chemical and pharmaceutical products, silk fabrics and garments and carpets and rugs as well as precious stones. India's chemical exports have been recording strong growth in the past two years.
India's major imports from Germany are mainly machinery, chemicals an pharmaceuticals, electro technical goods, vehicles and iron and steel.
The trends in Indo-German trade since 1993
 
The Future
1. Prospects for increasing bilateral trade between India and Germany are good

• The huge Indian requirement for up-to-date equipment to modernize and restructure the Indian economy. Whether this extends to broadband for online bingo and other new-wave digital entertainment sources, or simply newer technology in an industrial or even medical capacity, all will benefit the Indian economy in some form or another. 
• Enormous demand for consumer goods to satisfy the rising demands of the Indian consumers. 
• Rising awareness among Indian population towards environmental protection and the need for the transfer of environmentally sound technology. 
• Indian exports to Germany are getting more and more sophisticated and diversified. the quality of goods is improving 
• The completion of the internal market of the European Community and the creation of the European Monetary Union may boost economic growth and creating additional demand for Indian goods. The European Union is already by far India's biggest trading partner in the world. 
• The large European market of nearly 380 million consumers with high purchasing power is open for imports from all over the world. 
  The current Indian government which presented its third budget in February 2001 attempts to boost the reforms process. Many reform projects have been brought up to create the framework for an increasing growth of economy. Indian takes care as well to fulfill its obligations demanded by the WTO. In April 2001 the restrictions of quantity for the last 715 groups of good shall be lifted. 

 
2. The Indo-German Chamber of Commerce (IGCC) 
One of the most important institutions to promote Indo-German trade relations is the IGCC with its more than 6000 members (for comparison: 1990 = 4500 members) is the largest German Chamber abroad (Austria: 3.274; Switzerland: 3.230; Netherlands: 1.732). IGCC has its Head Office in Mumbai and branch offices in New Delhi, Chennai, Calcutta, Bangalore and a liaison office in Hyderabad and Düsseldorf. The Chamber completed 40 years in India in 1996.
 
3. Other Economic Promotional Institutions
a) German Development Company (DEG) 
Basic objectives of the DEG are to project India as an investment location and co-operation partner amongst German entrepreneurs through i.a. seminars and sector promotion through sector studies. It also provides integrated advice to German and Indian entrepreneurs for joint ventures and long-term technical co-operation.
b) Indo-German Export Promotion Project (IGEP) 
Set up under a bilateral agreement between India and Germany, the Indo-German Export Promotion Project is a joint trade promotion programme of the Ministry of Commerce in India and the Ministry of Economic Co-operation and Development in Germany. IGEP plays a pivotal role in promoting Indian exports to Germany and the European Union. Its special support concentration has been on small an medium-sized manufacturing and exporting companies in the private sector. IGEP's trade promotion programmes provide commercially focused services, pragmatic and practical.
 
4. German investments in India 
Germany enjoys position as one of the most prominent foreign investors in India. German investment in India almost tripled in the first few years of economic reforms in 1991. Approved German investments in India jumped 40% in 1997 to Rs. 21.5 billion.
They have grown considerably since 1990. As a direct result of the reforms initiated in 1991 they doubled in the same year, doubled again in 1992 and 1992 over the previous year. 1994 Germany even tripled its investment volume making it the third largest country investing in India after USA and U.K. In 1995 German firms once again more than doubled their investments in India. They invested Rs. 15 billion in India in 1996 and 21 billion in 1997. Thus Germany retained its position among the top five foreign investors in India. In 1998, the investments decreases by 53 %, but there are sings of recovery. The year 1999 witnessed increased investment volumes of Rs. 11, 4 billion again compared to Rs. 8, 5 billion during the year 1998.
 
Prominent Foreign Investors in India
Approvals and Actual Inflow of Investment (Rs. in Million) (1991-1999)

Name of the Country

Approvals

Actual Inflow

%

USA

461844,8

83542,3

18%

Mauritius

221983,3

124659,0

56%

U.K.

159767,2

22279,0

14%

Germany

79032,6

23510,8

30%

Summe (zzgl. übrige Länder)

2097580,8

699447,9

33%

(Source: Ministry of Industry, Annual Report 1999-2000)
 
5. Foreign Industrial Collaborations 
For the last 50 years thousand of collaborations have taken place in the form of Joint Ventures, Branch Expansions, Representations, Agreements on technical collaboration etc. Presently 1230 of such projects are active in India. In the first five years of reforms since 1991 more joint ventures came into being than in the whole period since India's independence in 1947. 
With 193 collaborations in 1998 and 208 in 1999 Germany retained its position as India's second largest collaborating partner. Most collaborations took place in the field of industrial machinery followed by automobiles, chemicals, electrical equipment and other engineering industries. The share of Indo-German collaborations out of the total approved foreign collaborations has been consistently above 9%.

Year

Position among Countries

Total no. of Collaborations

Technical Collaboration

Financial Collaboration

1991

2

157 (12%)

122

35

1992

2

201 (13%)

118

83

1993

2

173 (12%)

98

75

1994

2

217 (12%)

121

96

1995

2

252 (11%)

123

129

1996

2

263 (11%)

113

150

1997

2

254 (11%)

95

159

1998

2

193 (10%)

85

108

1999

2

208 (9%)

69

139

2000

3

201 (9%)

70

131

2001

4

156 (7%)

33

123

2002

4

148 (7%)

37

111

(01.01-30.11)

4

148 (7%)

37

111

 
6. Highlights of official visits and bilateral meetings
- 10. 01. - 12. 01. 2001:
Federal Minister of Finance Mr. Hans Eichel in India
- November 2000:
Co-ordinator of the Indo-German Aerospace Relations, Mr. Oettl in Delhi, Bangalore and Goa
- October 2000:
State Secretary, Federal Ministry of Agriculture in New Delhi
- 11.04.-13.04.2000:
Mr. Wolfgang Ischinger, State Secretary, Federal German Ministry of External Affairs for consultations
 
- 10.04.-11.04.2000:
14th meeting of Indo-German Joint Economic Commission led by Indian Finance Minister Mr. Yashwant Sinha and his German counterpart Dr. Werner Müller in Berlin
- 27.01.-02.02.2000:
Delegation from the Ministry of Economics, Transport, Agriculture and Viniculture of the State of Rhineland-Palatinate under its State Secretary Günter Eymael
- 05.12-07.12.1999:
President of the German Upper House and Prime Minister of Saxony, Prof. Dr. Kurt Biedenkopf, visited the Indian Economic Summit
- 21.08.1999:
Dr. Walter Döring, Deputy Chief Minister and Minister for Economic Affairs, Baden-Württemberg, to inaugurate the "Baden-Württemberg Day" in New Delhi
- 07.06.1999:
13th meeting of the Indo-German working group on coal
 
- 10. 02.-12.02.1999:
Delegation from the Ministry of Finance, Transport and Technology of the State of Bavaria under its State Secretary Mr Hans Spitzner and their official Participation in "India Engineering Trade Fair" the biggest engineering fair in India.
- 26.10.-29.10.1998:
Delegation from the Ministry of Economics of the State of Northrhine Westfalia under its State Secretary Bickenbach and their official participation in "IMME '98" the biggest fair for metals and metallurgy in India.
-23.03.-28.03.1998:
Delegation from the Ministry of Agriculture under State Secretary Dr. Franz-Josef Feiter and official Participation of the ministry in two agro-fairs, International Dairy Exposition '98 and International Poultry Exhibition.
- 22.03.- 27.03.1998:
Dr. Walter Döring, Minister for Economic Affairs, Baden Württemberg along with Delegation of Companies from Baden Württemberg to participate in technical Symposia
-08.01.-09.01.1998:
13th meeting of Indo-German Joint Economic Comission led by Federal Economics Minister Dr. Günther Rexrodt and his Indian counterpart Dr. P. Chidambaram in New Delhi.