German Chancellor Olaf Scholz is scheduled to visit India in the second half of October for inter-governmental consultations during which ease of doing business, migration, geopolitics and climate change will be high on the agenda, German Ambassador to India Philipp Ackermann said on Friday.
ADVERTISEMENT
In addition, the 18th Asia-Pacific Conference of German Business 2024 (APK 2024) is also scheduled to be held in the national capital from October 24 to 26.
The Indian Navy’s multi-billion deal for six conventional submarines under P-75I in which TKMS of Germany and Navantia of Spain are competing is expected to figure prominently in talks during the visit.
ADVERTISEMENT
‘Best moment’
“This is the best moment in history for India and German businesses. German companies have never been more optimistic about India. They want to be part of ‘Make in India’, invest in India and localise and produce in India,” said Stefan Halusa, Director General of the Indo-German Chamber of Commerce (AHK India) India addressing a press conference along with the diplomat.
In this regard, Mr. Halusa listed out top expectations of the German industry, which are further simplification of regulations, reducing corruption and stable legal framework, strengthening infrastructure in both physical and digital, and liberalisation of trade.
The press conference was held to present the key findings of the “German Indian Business Outlook 2024” conducted by KPMG in Germany and AHK India between April 9 and May 20 this year and deals with the business expectations of German companies in India. This is the third such survey that saw the participation of 260 companies of which 85 answered all the questions.
ADVERTISEMENT
Positive outlook
According to a survey of the German industries in India, expectations for the next five years are positive with 82% expecting an increase in turnover and 74% expecting growth and higher profits. The top three positive factors listed by German firms are low labour cost, political stability and availability of highly-qualified personnel, as per the survey.
On the larger global concerns impacting businesses, Mr. Halusa said these cyber attacks, increase in air pollution and raising protectionism and trade blocks. On more and more German companies investing in India, he said more and more small enterprises and family-owned companies are investing and these entities will take few years to set up for which a stable business environment is expected.
He referred to the regulatory changes that would make it difficult, the quality control norms being currently implemented, and the different rules across various States. Also for German companies to involve India further into their supply chains, trade liberalisation is a precondition, he stressed.
ADVERTISEMENT
2,000 firms in India
Currently, around 2,000 German companies are active in India with the major sectors being machine and machine tools, automobile and automotive components, engineering and then chemicals. German companies employ 7,50,000 employees comprising mostly Indians, Mr. Halusa said.
Dr. Ackermann noted that there are around 45,000 Indian students in Germany, constituting the largest non-German student community. He also pointed out that there was a shortage of Information Technology (IT) professionals in Germany as well as STEM (science, technology, engineering, and mathematics) graduates and so they are looking at the Indian workforce.
As per the survey, nearly six in 10 German companies are planning to increase their investments in India during the current financial year. “In addition, 78% of companies expect rising sales, and 55% forecast higher profits. The companies assume that the growth rate will be very dynamic. By 2029, 37% of respondents expect sales growth of more than 20% and 25% of them anticipate profit growth of more than 20%.”W
The role of India as a global competence centre or shared service centre is becoming increasingly important for the respondents, Mr. Halusa said adding, around one in five companies (21%) have set up such a centre in India, and more than a third of companies (35%) intend so within the next five years.