Dhe 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 Wednesday 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 persistently high level of economic growth and a constantly 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.
Investors face major challenges
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 an 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 act as a “strong supporter” of a free trade agreement between the EU and India.
Habeck is striving for closer cooperation between Germany and India. The Green politician announced before the start of his trip that India, with over 1.4 billion people, is now the most populous country in the world and thus a strong growth market in the Indo-Pacific region. “The journey is also characterized by more resilience and more diversification. Closer cooperation, especially when it comes to renewable energies and green hydrogen, has great potential for both sides and can increase our resilience and economic security.”
As a result of the Russian war of aggression in Ukraine and earlier dependencies on Russia for gas supplies, Germany is trying to expand supply routes. In Asia, in addition to China, other markets such as India should be given more attention. The Federal Government sees great potential in India for intensified cooperation on the energy transition.
Habeck will fly to the Indian capital New Delhi on Wednesday, where talks with Indian government officials are scheduled for Thursday. From there we continue to Mumbai. Habeck will attend the G20 Energy Ministers’ Meeting in Goa on Saturday. India currently holds the G20 presidency.
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. According to Rath, solar module production is booming, particularly in the Gujarat region, due to the Indian subsidy program “Production Linked Incentives”. Enpal wants to find out to what extent solar modules can be obtained from there.
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