Abstract
In Global economy, foreign trade policy is to accelerate the economy from low level of economic activities to high level of economic activities by making it a globally oriented vibrant economy and to derive maximum benefits from expanding global market opportunities.
Many previous Indian investments in Germany were driven by a focus on low costs, leading to the acquisition of distressed enterprises. Today, however, most Indian investors have gained experience with expansion abroad, and are increasingly looking for strategically investment targets in Germany's high-tech sectors. This is the result of a new study of the Bertelsmann Stiftung and Ernst & Young, which combines insights from expert interviews with existing economic data.
Indian investments in Germany have shown a substantial increase in the last few years. Besides trading, Indian companies have set up value chain activities in Germany, manufacturing goods and services locally as well as engaging in R&D and innovation activities. Indian corporate entities have invested in Germany, mainly through Mergers & Acquisitions. Indian companies are operating in Germany, mainly in the sectors of IT, automotive, pharma, biotech and manufacturing. The presence of Indian software companies in the German market is growing and the major Indian software providers, namely HCL, TCS, Infosys, and WIPRO, have operations in Germany. Companies like Bharat Forge Limited, Mahindra & Mahindra, Tata Steel, Novelis, Ranbaxy, Samtel, Hexaware Technologies, Lupin Pharma, Amtek, Graphite India Limited, Hinduja Group, Piramal, Sona Group, Essar, Kirloskar, Dr. Reddy’s Laboratories, Biocon, Hindustan National Glass and others have either acquired German companies or started their own subsidiaries.
India and Germany share a strategic partnership that has its basis in strong business and economic links. Over the years, not only the bilateral trade increased, but German firms have discovered new investment opportunities in India and so have the Indian firms in Germany..
German industry, right from the beginning, was always more than a supplier of goods to India. Periods of high exports and also imports were always accompanied by large flows of investment and technology. Since liberalization started in 1991 the new spurt of German exports to India and Indian export to German have led to an equally impressive boost in new investment and technical cooperation projects.
The study confirmed the growing role of Germany for Indian FDI and vice versa. As the trade ties between the two countries venture abroad,Germany will become indispensable for many Indian firms. Owing to geographical, cultural and linguistic distance, Germany, however, continues to be a tough market for some Indian firms. Nonetheless, as the study shows it is possible, with careful cultivation, to achieve extraordinary success in this highly attractive market.