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Dr Stefan Weckbach: FTA will help step up investments, trade...
German companies have been stepping up their investments in India. The southern region is getting a sizeable share of these. Daimler Bharat is the largest investment by Germany in India in the manufacturing sector - Dr. Stefan Weckbach, Consul General of Germany in Chennai.

DAIMLER BHARATH has  set up state - of the-art facilities at its Oragadam unit near Chennai. “The local content will be around 90 per cent and there will be  good focus on exports. The Fuso brand of commercial vehicles developed by Mitsubishi Daimler would be exported from the Chennai plant, apart from meeting domestic demand.”

Developed countries of the West, Japan and Korea have been experiencing stagnant levels of demand in their respective domestic markets. Understandably, they are attracted by the rapidly increasing demand from alarge populations in China and India.

 

Daimler, Bosch-Siemens make large investments

Weckbach, the German diplomat, who brings with him rich experience on the global economies, pointed to the joint venture of Bosch-Siemens establishing a white goods manufacturing plant at Oragadam. The logic appears simple: even if 0.5 per cent of Indians in the top income percentile

are targeted, they constitute a market of six million! Bosch-Siemens washing machines and other white goods have been quite popular in the sophisticated markets of Europe for several decades. These have been built on strong research and development base.

Weckbach referred to Bosch setting up a 5000 strong development centre in Coimbatore and an employee component of over 25,000. Weckbach pointed to Indian middle class and upper middle class households so far predominantly using gas cookers. “German companies offer ready-made kitchen equipment and these are displayed in large showrooms in Indian cities. I notice increasing interest in these,” he said. He pointed to the appreciation for German products for their high quality and sophistication and the willingness of the consumer to pay for quality and service.

 

Skill development...

Germany is renowned for its apprenticeship programme that imparts the needed skills over a vast array of disciplines. Weckbach pointed to the efforts of Germany to work closely with the National Skills Development Corporation in India’s massive skills development initiative. A MoU has been signed with FICCI on vocational training, he pointed out.

 

Trade volume declines....

Germany has been EU’s largest trading partner with India. The economic melt down of Europe and the steep decline in the growth rate of India resulted in bilateral trade declining by 4.2 per cent to 17.6 billion euros during 2012 from € 18.4 billion in 2011. This was also lower than the target of € 20 billion set by German Chancellor Dr Angela Merkel and Indian Prime Minister Dr Manmohan Singh for 2012. Both exports to and imports from Germany registered decline. Exports from India stood at € 7.22 billion (-3.8 per cent) and imports from Germany stood at € 10.38 billion (- 4.5 per cent).

Machinery, apparatus, gadgets, medical equipment and complete plants that accounted for nearly 35 per cent of total imports registered a decline of 10 per cent and electro technology with a 11.5 per cent share declined by 21 per cent.

As regards Indian exports, textiles and garments that accounted for a fifth of total exports, declined by over 30 per cent to € 1.45 billion.

India is an insignificant player in regard to trade with Germany. The total trade volume at € 17.60 billion was 0.88 per cent out of total German foreign trade of € 2006 billion made during 2012. During the year, Germany exported commodities to the value of € 1097 billion and imported €909 billion. Netherlands (€87 billion), China (€77 billion), France (€65 billion), USA (€51 billion) and Italy (€49 billion) are among the largest importers of German goods.

France (€104 billion), USA (€87 billion), UK (€72 billion), Netherlands (€71 billion) and China (€67 billion) were the major export destinations.

Weckbach suggested an early conclusion of a Free Trade Agreement between the two countries that would help achieve quantum jumps in trade and investments.

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