According to experts, India offers some attractive business opportunities for German companies. But there are also disadvantages.
The German economy sees great potential in India. At the same time, central organizations pointed to problems for German companies. A three-day visit by Federal Economics Minister Robert Habeck (Greens) to India from today to Saturday is expected to send a strong signal for a free trade agreement between the EU and India.
“India is one of the most important German economic partners in Asia,” said Wolfgang Niedermark, member of the executive board of the Federation of German Industries (BDI), the German Press Agency. “In view of the size of the Indian market, the consistently high level of economic growth and a steadily growing middle class with purchasing power, the country offers attractive business opportunities for German companies.” India has a high priority in the diversification efforts of German industry.
Disadvantages compared to China
According to Kirsten Schoder-Steinmüller, Vice President of the German Chamber of Industry and Commerce, production by German companies in India will become more important in the coming years, both for the local market and for export to other countries and regions.
“However, investors in India are still facing major challenges: Above all, bureaucracy and a complex regulatory environment. Here, India continues to have major disadvantages compared to economic engagement in China.”
Niedermark spoke of structural problems such as corruption, excessive bureaucracy and deficiencies in the infrastructure. India also continues to levy high tariffs on goods from Europe in several sectors. The BDI expects Habeck to appear as a “strong advocate” of a free trade agreement between the EU and India.
Solar module production is booming
The minister will be accompanied by a business delegation. Henning Rath, managing director of the start-up Enpal, which sells solar systems, will also be there. “We want to diversify our supply chains,” said Rath. India is very interesting as a partner for the solar industry.
Due to the Indian subsidy program “Production Linked Incentives” – the Indian answer to the multi-billion dollar US subsidy program Inflation Reduction Act – solar module production is booming, especially in the Gujarat region, according to Rath. Enpal wants to find out to what extent solar modules can be obtained from there.
Source: Stern
