For German companies, China has always been a place of longing. But suddenly India is becoming more and more popular. Economics Minister Habeck is also touring the subcontinent.
Before Robert Habeck enters the headquarters of the German company SFC Energy not far from New Delhi, garlands of flowers are hung around his neck and candles are lit. After this welcome ritual in the merciless heat, we finally go into the air-conditioned building. The company from near Munich manufactures hydrogen-methanol fuel cells for power supply near New Delhi and works together with an Indian company, which is the door opener for the market. SFC is one of around 2000 German companies that are now active in India.
In the morning, on the sidelines of an Indian-German business meeting, Habeck was already smiling in front of Indian and German flags – as the background for the two contracts signed by the German ground-mounted photovoltaic company Next2Sun with Indian partners. “Could you perhaps say something briefly and explain what this is about?” Asks Habeck CFO Sascha Krause-Tünker, looking at the numerous journalists present, “otherwise it seems pretty strange here.” His request was granted.
While Habeck’s visit to India continues the federal government’s charm offensive, the country has steadily gained in importance for the German economy. The business delegation traveling with them raved about “dynamics” and “momentum” – even when two members put the brakes on the euphoria, warned against exaggerated expectations and pointed out structural problems in India – such as bureaucracy and corruption.
The reasons for the widespread optimism: As the most populous country in the world, India is a huge market that is growing strongly. In addition, Germany wants to make itself more independent of China and sees India as a key partner – especially since India also sees a strategic challenge in China.
Proud of G20 Presidency
At the same time, the country is a very confident partner. This year India holds the presidency of the G20, the club of the most important industrialized and emerging countries. For the government around Prime Minister Narendra Modi, this is of great, and not just symbolic, importance. Many Indians are proud of the growing importance of their country. You can’t miss it in New Delhi. The huge poster in the city center with the slogan “G20 – 1.4 billion people, a dream” and the G20 sticker of a colorful tuk-tuk taxi, which fights its way through the traffic of India’s capital characterized by continuous honking, unite the message: India has arrived at the top and among the most important countries.
The subcontinent is attractive for the German economy for many reasons – for example in the field of renewable energies. German company representatives consider the commitment of the Indian government to say goodbye to fossil fuels to be credible. On the one hand, renewables are a future technology. On the other hand, India wants to make itself independent of energy imports – and therefore wants to produce the necessary energy in its own country. In addition, the consequences of climate change are being felt particularly severely in India, with record heat and heavy rainfall.
Rapid economic development is particularly important for India, where many millions of people live in poverty. That is why India is building 20 coal-fired power plants despite climate change, and even more are planned. At the same time, a total of 500 gigawatts of renewable energies are to be added by 2030 – for this to succeed, the expansion must be accelerated. The German industry representatives see this as a good opportunity.
Hoping for free trade agreements
By the year 2047 – the 100th anniversary of independence, India wants to become an industrial country. The current growth rates are not enough to achieve this ambitious goal – although they are higher than in China. The Indian government is investing billions in expanding infrastructure such as airports, roads and digital networks.
If you talk to German entrepreneurs who are active in India, you will hear: From their point of view, India’s challenges offer them great opportunities. They are also pinning their hopes on the free trade agreement that the EU and India are currently negotiating.
Half of the German companies that invest in India produce for the local market, not for export. What is also attractive for India: German companies are investing more and more money in research and development on the subcontinent. Growth is also necessary because India has a young population. New jobs have to be created for 10 to 13 million people every year – an ambitious task.
Stefan Halusa, Head of the German Chamber of Foreign Trade, sums up what appeals to German companies about India in one word: growth.