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27.11.2020 - Article

With a trade history of over 500 years, India and Germany are linked by a common past of economic cooperation.

Historical relationship

With a trade history of over 500 years, India and Germany are linked by a common past of economic cooperation. Over the years, not only has the bilateral trade increased but German companies have discovered new business and investment opportunities in India and so have the Indian firms in Germany. Already in the 16th century, Jakob Fugger, a merchant and banker from Augsburg, financed the voyage of the first German ships to Goa, thus opening up the trade route between Germany and India. Between the 16th and the 18th centuries, a number of German companies were established with the aim of trading with Indian and other East Asian countries. In the 19th century it was the German company Siemens who built the first telegraph connection between Kolkata and London, via Berlin.

Current trade and investment relationship

In recent times the success story continues as both countries extend their business relationship:

• More than 1700 German companies are active in India, providing around 400,000 direct and indirect jobs. Out of these, about 1000 are 100% subsidiaries and balance are liaison offices, joint ventures and agencies. Germany is India's largest trading partner in Europe and among India's top ten global trade partners.
• Bilateral trade between the two countries in 2019 was valued at more than EUR 21.3 billion.
• Germany is the 7th largest foreign direct investor in India and Germany's total foreign direct investment in India from 2000 until June 2020 amounted to approx. USD 12 billion.
• Vice versa, Indian investments in Germany have remarkably increased over the last few years. Indian corporate entities have invested over EUR 6.5 billion in Germany, especially in sectors of IT, automotive, pharma and biotech. Today, there are more than 200 Indian companies operating in Germany.
• The strong bilateral economic ties are also expressed in the constantly growing number of business and employment visas being issued by the German Embassy and Consulates in India: in 2019, 7575 employment visas for long-term stays and more than 78,000 short-term business-related visa were issued.

German Embassy and Consulates

The German Embassy and Consulates in India have dedicated departments to handle and intensify our cooperation in the field of economic affairs. The Economic Department of the German Embassy in New Delhi also integrates seconded experts from federal ministries other than the Federal Foreign Office, such as Ministry for Economic Affairs and Energy (BMWi), Ministry for Transport and Digital Infrastructure (BMVI), Ministry of Finance (BMF), Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), Ministry of Labour and Social Affairs (BMAS) as well as the German Industry.

Apart from monitoring and analyzing the economic situation and regulatory framework, our missions have regular interactions with Indian policymakers, industry chambers, institutions and companies. The Embassy also works closely together with the EU Delegation and EU Member States Representations on issues of common interests.

Organizations and programmes promoting bilateral trade and investment

Our bilateral cooperation has been witnessing a great engagement in number of areas for the last few years. With an aim to nurture it, both the Governments and private stakeholders from both sides interact regularly in the areas of agriculture, energy and environment, transport and quality infrastructure, export control, digitalization, urbanization, financial and social affairs, higher education, vocational education and training through joint working groups, forums, committee meetings and consultations.

Bilateral industry chambers and investment promotion organizations such as Indo German Chamber of Commerce and GTAI (Germany Trade and Invest), together with the German Government, represent the so-called three pillar structure of bilateral economic relations, strengthening trade and investment relations. Several German states (Bundeslaender) have also established their offices in India to promote trade and investment relations among individual states on both sides.

The so-called Fast Track Mechanism for German companies in India has been set up in order to facilitate the realization of business opportunities and to address recurring regulatory issues. In the past few years, more than 20 cases of business concerns were integrated into the Fast Track Mechanism and through their successful conclusion have thereby contributed to India’s ranking in the Ease of Doing Business Index. The mechanism has been duplicated for Indian companies in Germany where it is being handled by the Indian Embassy in Berlin.

Another example of a very successful bilateral cooperation is the Indo-German Manager Training Programme supported by the German Government and implemented in close cooperation with German Development Agency GIZ, Indian Department for Investment and International Trade Promotion (DPIIT) as well as the Indian Industry Associations CII and FICCI. Over 750 Indian managers have so far taken a month long training in Germany on doing business with German companies. Application of gained knowledge received during this programme has helped these managers to give remarkable stimulus to their businesses.


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