About 80 Indian companies in Germany generated combined revenues of €11.4 billion and employed a total workforce of 27,400 in 2016, according to a study.
The study — conducted by the Bertelsmann Foundation, Confederation of Indian industry (CII) and EY, based on interviews with leading Indian CEOs — also said between 2010 and 2016, Germany was the second-largest recipient of Indian FDI in Europe with 96 projects (U.K. was the first with 265 projects). About 80% of the CEOs surveyed said access to innovation and technology were important factors in the decision to invest in Germany.
‘Advantage Germany’
The study said German firms could benefit from this development through accelerated integration with the huge Indian market, access to the innovative potential of Indian companies and to the large pool of Indian professionals. Murali Nair of Bertelsmann Stiftung said Germany should hence put more focus on government incentives, for example tax relief for depreciation, to encourage commitment by foreign investors.
Since 2010, close to 140 major investment projects by Indian firms had been initiated in Germany. This included FDI as well as mergers and acquisitions.
As on date, 46% of all Indian investment projects in Europe were made in the UK. Germany came in second with 17% of these projects, it said. Top sectors for investment include automotives; metal and metal processing; professional, technical and scientific services, chemical and pharmaceuticals; electrotechnics and manufacture of machinery.
The study found that Indian firms in Germany generate almost 70% of the turnover in labour-intensive sectors such as metals and automotives. Important players in these sectors are Tata Steel, Hindalco industries and Sona Autocomp. The Indian IT industry accounts for a revenue share of 9%. This trend, however, is witnessing a slow shift. Access to high-tech products and the brand "Made in Germany" are also important factors which influence Indian Industry’s decision to invest in German companies.
