Indo-German Economic Relations


With trade history that spans more than 500 years, India and Germany share a strategic partnership that has its basis in strong business and economic links.

Indo-German Trade history

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.

PM Modi and Chancellor Merkel in Hannover
PM Modi and Chancellor Merkel in Hannover© dpa / picture alliance

In recent times the success story continues as both countries extend their business relationship. Thereby, India as one of the fastest growing economies in the world offers various opportunities for German companies. Today, more than 1700 German companies are active in India, providing around 400.000 direct and indirect jobs. Germany is India's largest trading partner in Europe and among India's top ten global trade partners. Bilateral trade between Germany and India in 2016 was valued at more than EUR 17.4 billion.

Germany is the 7th largest foreign direct investor in India since January 2000. Germany's total foreign direct investment in India from 2000 until 2016 amounted to approx. EUR 9 billion. There are more than 1600 Indo-German collaborations and over 600 Indo-German Joint Ventures in operation. Various programs have been set up in order to facilitate the realization of business opportunities in India such as the Fast-Track-System for German companies or the Make-in-India Mittelstand-Program.

Germany as a business Location

The Volkswagen plant in Pune, western India
The Volkswagen plant in Pune, western India© picture alliance

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.

Germany lies at the center of Europe and offers not only excellent access to a prosperous market of over 80 million inhabitants but also to the Common Market of the European Union with 28 member states and more than 500 million people.

Make use of this opportunity!

Germany is the largest national economy in Europe and the fourth-largest by nominal GDP in the world. It is also the third largest exporter in the world and its exports account for more than one-third of national output. More than 10,000 foreign companies operate in Germany, with more than 2 million employees and an annual turnover of more than 750 billion Euros. Foreign investors and entrepreneurs see Germany as a prime location in terms of infrastructure, logistics, research and development as well as design. Especially when it comes to the framework and the conditions for R&D, Germany scores high marks, which underlines the country’s high competitiveness with regards to future technologies.

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