special report germany || india...trade and investment in india and look at the op - ... q3-2012...

SPECIAL REPORT

GERMANY || INDIAEDITION 1 || 11.2018

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SPECIAL REPORT GERMANY || INDIA

“The transformation of India is remarkable. By all metrics of growth, pop-ulation and urban development, India’s economic story is hugely impres-sive; even if it has gone largely unnoticed in much of Europe. From 13th place in 2000, India is on track this year to become the 5th largest econ-omy in the world”. “For an equity market investor, the DAX has nearly doubled over the past 18 years whilst India’s main stock market index has risen 700 %. Even accounting for the depreciation of the Rupee, a euro-based inves-tor would have enjoyed gains of 300 %”. “The strength of India’s economy and its huge population growth offers enormous opportunities for Germany. In 2017, Germany’s exports to In-dia totalled € 10,668m with imports of € 6,770. Its’ bilateral trade surplus of almost € 4bn is the largest of all EU member states”.

Nick Parsons | Head of Research & Strategy, ThomasLloyd Group

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Germany is the world’s fourth largest economy, though there are some fascinating developments just below it on the global leader board. Earlier this year, India reached a new high point. Its GDP rose above France to take it up to 6th place. At current levels of growth and exchange rates, it is likely to overtake the United Kingdom by the end of 2020 and will then be in 5th place behind only Germany, Japan, China and the United States.In this paper, we look at the dynamics of growth, trade and investment in India and look at the op-portunities this presents both for investors and companies in Germany.

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SPECIAL REPORT FRANCE || INDIA

RELATIVE ECONOMIC AND FINANCIAL PERFORMANCE

At the start of 2000, India’s annual GDP stood at just $ 466,841m; less than one-third the size of the French economy, whose GDP at that time was $ 1,502,245m and the United Kingdom with $ 1,652,539m. Germany was then the world’s 3rd largest economy with a GDP of $ 2,202,845m; almost five times the size of India.

Over the subsequent 18 years, Germany’s GDP has increased by 67 % to $ 3,684,816m, the UK has grown cumulatively by 59 % to $ 2,624,529m whilst France has expanded 65 % to $ 2,583,560m. In contrast, India has grown al-most five-fold to $ 2,611,012m.

With a very sluggish start to the new millennium, the impact of the global financial crisis (GFC) in 2008 – 09 and the European sovereign debt cri-sis in 2011 – 12, Germany has suffered three pe-

riods of falling or zero growth since 2000. GDP fell for 2 consecutive quarters from Q4 2002 (the technical definition of a recession) then for 4 successive quarters during the financial crisis from Q2 2008. Another brief and shallow 2-quar-ter recession then began in the final quarter of 2012. Germany returned to growth in Q2 2013 and its average quarterly growth rate of 0.7 % throughout 2017 was the highest since 2006.

Back in 2000, India was not even amongst the world’s top 10 economies. Its annual GDP at that time was lower than Mexico, Spain and South Korea and it was only the 13th largest in the world. The Indian Statistics Office does not publish figures on quarterly GDP growth (it only publishes the annual percentage change every three months) but the numbers can be obtained from the OECD.

Quarterly GDP development in Germany, India and OECD since 2000

GDP development of Germany, France UK and India from 2000 – 2017

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

UK

Germany

India

France

2017201620152014201320122011201020092008200720062005200420032002200120001999

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

IndiaOECD Germany

Q1-

2018

Q1-

2017

Q1-

2016

Q1-

2015

Q1-

2014

Q1-

2013

Q1-

2012

Q1-

2011

Q1-

2010

Q1-

2009

Q1-

2008

Q1-

2007

Q1-

2006

Q1-

2005

Q1-

2004

Q1-

2003

Q1-

2002

Q1-

2001

Q1-

2000

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In the 18 years since the beginning of 2000, In-dia has only suffered two quarters of negative GDP growth (Q2 2009 and Q3 2011) and it has never been in recession. Its average quarterly growth rate over the period has been a very impressive 1.7 %, compared to just 0.3 % for Germany and an OECD average of 0.5 %.It goes without saying, the period prior to the financial crisis in 2008 was marked by particu-larly strong growth across the emerging mar-

kets (EM) universe as a result of cheap and plentiful liquidity, a benign regulatory environ-ment in banking & finance, globalisation and liberalisation of trade flows. The GFC then hit significantly harder in G7 than the EM nations and it might arguably be fairer to compare rel-ative performance from when European Cen-tral Bank President Mario Draghi famously pledged in Summer 2012 to do “whatever it takes” to save the euro.

Even taking this favourable starting point, however, we see that the Indian economy has grown by 45 % over the 5 ½ years to end-2017

whilst Germany has grown just 8.9 % and the OECD average is 12.2 %.

Quarterly GDP development in Germany, India and OECD Q3 2012 – Q1 2018

Cumulative GDP growth in Germany, India and OECD Q3 2012 – Q1 2018

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

India OECD Germany

Q1-

2018

Q4-

2017

Q3-

2017

Q2-

2017

Q1-

2017

Q4-

2016

Q3-

2016

Q2-

2016

Q1-

2016

Q4-

2015

Q3-

2015

Q2-

2015

Q1-

2015

Q4-

2014

Q3-

2014

Q2-

2014

Q1-

2014

Q4-

2013

Q3-

2013

Q2-

2013

Q1-

2013

Q4-

2012

Q3-

2012

90

120

150

IndiaOECD Germany

Q1-

2018

Q4-

2017

Q3-

2017

Q2-

2017

Q1-

2017

Q4-

2016

Q3-

2016

Q2-

2016

Q1-

2016

Q4-

2015

Q3-

2015

Q2-

2015

Q1-

2015

Q4-

2014

Q3-

2014

Q2-

2014

Q1-

2014

Q4-

2013

Q3-

2013

Q2-

2013

Q1-

2013

Q4-

2012

Q3-

2012

Q2

2012

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Looking at relative financial market perfor-mance, India has been the clear winner in this new millennium. The main index, comprising 50 blue-chips traded on the National Stock Exchange (NSE) is known as the ‘Nifty 50’. Launched with a base value of 1,000 in 1995, the index stood at 1546 in January 2000. By August 2018, it had reached 11,738; a sev-en-fold increase in just 18 years. The DAX

index of 30 leading German shares stood in January 2000 at 6,835. In July 2018, the index was at 12,805; almost double its level 18 years ago.

German DAX and Indian Nifty actual performance 2000 – 2018

0

3000

6000

9000

12000

15000

31.01.18

31.01.17

29.01.16

30.01.15

31.01.14

31.01.13

31.01.12

31.01.11

29.01.10

30.01.09

31.01.08

31.01.07

31.01.06

31.01.05

30.01.04

31.01.03

31.01.02

31.01.01

31.01.00

Nifty 50DAX

German DAX and Indian Nifty 50 cumulative performance 2000 – 2018

0

100

200

300

400

500

600

700

800

Nifty 50DAX

31.0

1.18

31.0

1.17

29.0

1.16

30.0

1.15

31.0

1.14

31.0

1.13

31.0

1.12

31.0

1.11

29.0

1.10

30.0

1.09

31.0

1.08

31.0

1.07

31.0

1.06

31.0

1.05

30.0

1.04

31.0

1.03

31.0

1.02

31.0

1.01

31.0

1.00

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Of course, relative currency performance (and the reinvestment of dividends which are not included in headline index performance) can also significantly impact investor returns; often in ways which are under-appreciated or even ignored. The European euro has appre-ciated from INR43.9 at the beginning of 2000

to 78.9 in August 2018. Though the impact of foreign exchange losses would obviously eat into the capital appreciation, this would still leave a euro-based investor in the Indi-an stock market with gains of 300 % over the period.

India’s sustained economic growth is un-deniably impressive and comes at a time of enormous increase in its population. Already established as the second largest population in the world, it is predicted to overtake China as the world’s most populous country in 2024. Its growth is staggering; the annual birth rate substantially exceeds the entire population of Australia. Each day the population increases by 57,000, and every week by enough to fill the Allianz Arena in Munich five times over. Approximately 1 in every 6 people on earth lives in India.

The current population of India is 1.339 bil-lion. By 2025, the United Nations projects an increase to 1.452 billion, then 1.659 billion by the year 2050. This is an increase of nearly 24 % from the figure in 2017. The population is set to hit its peak of around 1.679 billion around 2060.

Given the twin influences of population growth and continued urbanisation, India al-ready has five megacities with metropolitan areas consisting of populations of over 10 million people. These are Delhi, Mumbai, Kol-kata, Bengaluru and Chennai; names which are all surely familiar to people in Germany. Much less well-known are some of the oth-er top 10 fastest growing cities in India; all of which are in the top 35 globally in the period from 2006 – 2020 with growth rates substan-tially above the global average city population growth of 2.7 % per annum.

Increased rural to urban migration and an endogenous population increase will result in further growth in many cities across India. By 2050, the country is expected to have in-creased its tally of megacities to 8, and by 2100 it is projected to have 12. Existing meg-acities are also predicted to continue to grow

SURGING POPULATION GROWTH

EUR/INR exchange rate since 2000

20

40

60

80

100

EUR/INR

31.0

1.18

31.0

1.17

29.0

1.16

30.0

1.15

31.0

1.14

31.0

1.13

31.0

1.12

31.0

1.11

29.0

1.10

30.0

1.09

31.0

1.08

31.0

1.07

31.0

1.06

31.0

1.05

30.0

1.04

31.0

1.03

31.0

1.02

31.0

1.01

31.0

1.00

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in size. Delhi will increase by nearly 10 million by 2050, whilst Mumbai is set to grow by al-most 20 million to become the world’s most

populous city by 2050. Another current meg-acity, Kolkata is projected to more than dou-ble in size, from 14 to 33 million.

By all metrics of growth, population and ur-ban development, India’s economic story is hugely impressive; even if it has gone largely unnoticed in much of Europe. After the deep and painful recession of 2008 – 09 and the low growth years of 2011 – 12, the introspec-tion from politicians, businesses and citizens

across the European Union is entirely under-standable. Looking over the horizon, though, we can better appreciate the external op-portunities in a world which is growing more rapidly – and far more sustainably – than is commonly understood.

ECONOMIC GROWTH AND INTERNATIONAL TRADE

India is just one of a group of Asian countries (China, Indonesia, Thailand, Philippines, Ma-laysia, Pakistan, Bangladesh, Vietnam and Sri Lanka to name just a few) which have not had a single year of falling GDP since 2010.

Not all the economic growth is – or can be – domestically driven. To take just one example, India is rich in many natural resources but has only a very limited exploitation of oil reserves. Indeed, its crude oil production fell for a sixth consecutive year in 2017 – 18 to just 35.6m tonnes, which meant it imported 82.8 % of all its oil requirements. Production of natural gas, meantime, – a key input required for power

generation and manufacturing products in the fertilizer and steel industries – grew very mar-ginally in the last year but is still down more than 30 % over the past 6 years.

The dependence on imported energy signif-icantly contributes to India’s external trade deficit and its negative current account bal-ance which amounts to around 1 % of GDP. However, the story of India’s trade in goods and services is a far more complex one; build-ing not just on its colonial history but as a sea-faring nation which has seen a two-way flow of goods across the Asian subcontinent and beyond for many centuries.

India’s mega-cities: current and projected population

0

10

20

30

40

5020502016

Chennai BengaluruKolkataMumbai Delhi

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Annual Change in Gross Domestic Product (GDP) Forecast

ʼ05 ʼ06 ʼ07 ʼ08 ʼ09 ʼ10 ʼ11 ʼ12 ʼ13 ʼ14 ʼ15 ʼ16 ʼ17 ʼ18 ʼ19 ʼ20 ʼ21 ʼ22

China 11.3 12.7 14.2 9.6 9.2 10.6 9.5 7.9 7.8 7.3 6.9 6.7 6.8 6.5 6.3 6.2 6.0 5.8

India 9.3 9.3 9.8 3.9 8.5 10.3 6.6 5.5 6.4 7.5 8.0 7.1 6.7 7.4 7.8 7.9 8.1 8.2

Indonesia 5.7 5.5 6.3 7.4 4.7 6.4 6.2 6.0 5.6 4.0 4.9 5.0 5.2 5.3 5.5 5.5 5.5 5.5

Thailand 5.2 5.0 5.4 1.7 -0.7 7.5 0.8 7.2 2.7 0.9 2.9 3.2 3.7 3.5 3.4 3.1 3.0 3.0

Philippines 4.8 5.2 6.6 4.1 1.1 7.6 3.7 6.7 7.1 6.1 6.1 6.9 6.6 6.7 6.8 6.8 6.8 6.8

Malaysia 5.0 5.6 6.3 4.8 -1.5 7.5 5.3 5.5 4.7 6.0 5.0 4.2 5.4 4.8 4.8 4.9 4.9 4.9

Pakistan 6.3 6.9 6.5 5.5 5.3 6.0 6.4 6.3 6.0 6.3 6.8 7.2 7.1 7.0 7.0 7.0 7.0 7.0

Bangladesh 7.5 7.0 7.1 5.7 1.7 -0.7 7.5 0.8 7.2 2.7 0.9 2.9 3.7 3.5 3.4 3.1 3.0 3.0

Vietnam 7.5 7.0 7.1 5.7 5.4 6.4 6.2 5.2 5.4 6.0 6.7 6.2 6.3 6.3 6.2 6.2 6.2 6.2

Sri Lanka 6.2 7.7 6.8 5.9 3.5 8.0 8.4 9.1 3.4 5.0 4.8 4.4 4.7 4.8 4.9 5.0 5.1 5.3

Figures from Eurostat show that India is the 14th largest exporter of goods in the world with a share of 2.1 % of world exports and the 9th largest importer with a share of 2.8 % of world imports. Its exports of € 235bn place

it between Taiwan (€ 253bn) and Thailand (€ 193bn) whilst its’ imports of € 322bn leave it between Mexico (€ 350bn) and Singapore (€ 256bn).

Detailed breakdown of GDP, actual and forecast (in %) Forecast

2014 2015 2016 2017 2018 2019

GDP at market prices 7.5 8.0 7.1 7.0 7.3 7.4

Private consumption 6.2 6.1 8.7 8.0 7.8 7.5

Government consumption 9.6 3.3 20.8 15.6 11.2 10.0

Gross fixed investment 3.3 6.5 2.4 2.8 5.3 6.7

Exports of goods & services 1.8 -5.3 4.5 5.0 5.8 6.9

Imports of goods & services 0.9 -5.9 2.3 4.9 5.3 6.4

Consumer Price Inflation 5,8 4,9 4,5 3,2 4,6 4,2

Government deficit (% of GDP) -6.9 -6.8 -6.0 -5.9 -5.8 -5.6

Current account balance (% of GDP) -1.2 -1.1 -0.7 -0.9 -1.2 -1.4

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The top four trading partners of the EU are the United States, China, Switzerland and Russia. These countries together make up 43 % of all exports from the EU and 48 % of all imports to the EU. In 2017, India was the tenth larg-est destination for EU exports with a share of 2.2 % amounting to € 42bn. This places it be-tween the United Arab Emirates (€ 43bn) and Mexico (€ 38bn). India was the ninth largest partner for EU imports with a share of 2.4 % amounting to € 44bn. This places it between South Korea (€ 50bn) and Vietnam (€ 37bn).

The European Union had a trade surplus with India from 2007 to 2012 although this turned into a trade deficit in 2013, reaching € 2.4 bil-lion in 2017. During this period, trade between the two economies hit a low in 2009, but quickly recovered, peaking in 2011. It then fell somewhat and did not surpass the 2011 levels until 2017. Between 2008 and 2017 exports to India grew by € 10.4bn while imports grew by € 14.5bn.

The Eurostat data show that the main catego-ries driving exports to and imports from India are ‘Machinery and vehicles’, ‘Chemicals’ and ‘Other manufactured goods’. Together these manufactured products accounted for around 89 % of the EU exports and 83 % of imports. In exports from the EU to India, ‘Machinery and vehicles’ (42 %) was the largest group be-fore ‘Other manufactured goods’ (33 %) while in imports from India, ‘Other manufactured goods’ (50 %) was almost three times as large as ‘Machinery and vehicles’ (18 %).

There are seven EU member states whose imports from India are higher than € 3bn: the United Kingdom, Germany, Italy, Belgium, France, the Netherlands, and Spain. Together they account for 83 % of imports from India. The share of India in extra-EU imports is less than 3 % for all but four member states. The same seven member states that are the larg-est importers, are also the largest exporters to India but here Germany (€ 10.7bn) leads followed by Belgium (€ 8.0bn) and France (€ 5.7bn). Taking exports and imports togeth-er, Germany is trading most with India in ab-solute terms.

Imports, exports and trade balance between the EU and India, 2008 – 2017

45,0

40,0

35,0

30,0

25,0

20,0

15,0

10,0

5,0

0,0

-5,0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Export Imports Balance

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Germany’s bilateral trade surplus with India should not come as a surprise. Figures from Statistisches Bundesamt show that in 2017, Germany exported more than it imported from 169 countries around the world! Its three biggest surpluses are with the United States (€ 50.4bn), United Kingdom (€ 47.3bn) and France (€ 41.1bn). India comes in at number 28 on the list (between South Africa and Ukraine) with a net surplus of € 2.2bn based on exports of € 10.7bn and imports of € 8.5bn. Beyond India, not only have the value and volume of German exports to Asia increased since

2000, but the share of total exports going to the region has also increased. For the BRICS nations together, German exports have more than doubled from 4.5 % of the total in 2000 to 10.3 % in 2016.

German exports to India include: machinery and electronic equipment (43.1 %), chemicals (11.9 %), metals (7.9 %) transportation (7.8 %) and plastic or rubber (5.4 %). More than a third of its total exports are machinery and engineering goods.

GERMANY & INDIA TRADE

As well as trade, Germany is now a major source of foreign direct investment (FDI) for India with many major companies already present there. Germany is the 7th largest for-eign investor in India with a cumulative invest-ment of USD9.7bn from 2000 to March 2017, representing 2.9 % of the total FDI inflows into

India according to statistics provided by the Department of Industrial Policy & Promotion (DIPP). The highest FDI equity inflows are in the automobile sector (20.8 %), with mechan-ical & engineering (15.1 %) in second place, followed by services (12.1 %) and chemicals (7.5 %).

0

20.000

40.000

60.000

80.000

100.000

120.000

UAEFranceCyprusGermanyUSANetherlandsUKJapanSingaporeMauritius

FDI Inflows into India from 2000 – 2017

Annual FDI inflows from Germany

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Large German companies have significantly increased investment in India in recent years; including all the major German automobile companies: BMW, Daimler, Audi, Volkswagen and Porsche. To give just a few examples, Mercedes-Benz opened its manufacturing plant in the town of Chakan in 2009, whilst Volkswagen also opened a plant there with capacity for producing 110,000 cars annual-ly. Daimler is in partnership with Indian Sutlej Motors (SML) for manufacturing luxury buses and in 2012 opened a new factory in Chen-nai – the centrepiece of its USD 850 million (44 billion rupee) investment in India. Other companies to make notable investments in the country include Siemens, Bosch, Bayer, BASF, Adidas, SAP and Deutsche Bank but it is not just the big household names which have operations there. After it success as the Partner Country in Han-nover Messe 2015, and backed by the Federal Government, the Embassy of India in Ber-lin has launched ‘Make in India Mittelstand” (MIIM); a market entry support programme for facilitating investments by German fami-ly-owned companies. As at March 2018, MIIM

has approached more than 350 Mittelstand companies, of which 113 are now enrolled as official members. The programme supports declared investment of € 836m spread across industries including chemicals, renewable energy, consumer goods, environment, infra-structure and mobility. In total, it is estimat-ed that more than 1,700 German companies are active in India, providing employment to around 400,000 people.Moving in the opposite direction, around 140 major investment projects have been estab-lished and more than 40 M&A deals completed in Germany by Indian companies since 2010, employing more than 24,000 people. After the United Kingdom with 45.5 % of the total, Germany is the second most-favoured Euro-pean destination for Indian FDI with 16.5 %. Whilst they operate across the country, the main areas for Indian investment have been North Rhine-Westphalia, Hessen, Bavaria and Baden-Wurttemberg. These Federal states together have attracted almost two-thirds of total Indian-led FDI projects in Germany.

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Source: https://www.ey.com/Publication/vwLUAssets/ey-indian-investments-in-germany/$FILE/ey-indian-investments-in-germany.pdf

2016

Lloyd Electric & Engineering2016(M&A); 2015(FDI)

Suzlon Energy2010

Suzlon Energy2010

Jumps Auto Industries2015 Appollo Tyres

2016(M&A)

2015 (FDI)

2017(M&A)Yashraj Biotechnology2015 (FDI)

Hinduja Group 2017 (M&A)

TD Power Systems2016 (M&A)

Godrej Group2015 (FDI) )

Essel Corporate Resources2016 (FDI)

Infocore Engineering & IT Services2014

Thermax2012

Kalyani Group2011 ; 2014 Ashok Minda

Group2013

Essel Propack2015(FDI); 2016(M&A)

Industries2011(FDI); 2011(M&A)

Firepro Systems2011

Rotex Group2015

Berlin

Hamburg

Düsseldorf

Frankfurt a. M.

Hanover

Munich

Sudarshan Chemical Industries2012

2011

PCM Group of Industries 2013

Technology2015

Mahindra Group2011

Industries2015

Amtek Auto 2014

Bharat Fritz Werner (BFW)2011

KalpavrukshSystems

2012

Veer Energy &Infrastructure 2011 (FDI)

QuEST Global Inc 2012 (FDI)

iWave Systems Technologies2010 Wipro

2016

Kalabhai Karson2014

PV Power Technologies 2010

Rinox Engineering2013

Lupin2015

Aditya Birla Group2013

Paradigm IT 2013

Samvardhana Motherson Group2013 (FDI)

Manna di Moda2015

Global Economic Advantage /

2014

Indoflash

2011Tata Group2011

Tata Group2013

Castex Technologies2014

Himenviro Environmental Technologies2012

EMC2015

Ruia Group2011(M&A)

Aditya BirlaGroup

2011(FDI)

Tech Mahindra2014(FDI)

PI Industries2014(FDI)

2013

SuperhouseGroup2012

Evalueserve2014

Wipro2010 (M&A);

2011 (FDI)

Bilcare2010 (FDI);2015 (FDI);

2010(M&A) Bilcare2011 (FDI); 2015 (FDI)

Amtek Group2013(FDI);2013(M&A)

QueryNow2015

Forbes Marshall2012

Services2010

Ruia Group2010

Vikram Solar2010

Orchid Chemicals and

2013

Kalyani Group2011

Premium Transmission2011

Zydus Animal Health2011

Samvardhana Motherson Group2013

Automag (I)2013

Amtek Group2014

Bagla Group2014

TVS Group2012

Tata Autocomp Systems 2013

MAP 1

Foreign direct investment (FDI) [ until Q1 2016] Mergers & Acquisitions (M&A) [ until Q1 2017]

Name of the Indian investor year of the investment

Major cities with more than three FDI projects or M&As The larger the circle, the greater the number of projects

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It is estimated that Indian companies operat-ing in Germany generate combined revenues of € 11.4bn, almost half of which comes from metal and metal processing industries and nearly a third from the automotive industry.

Key companies include Hindalco Industries, Tata Steel, Motherson Sumi Systems, Amtek Auto, Wipro Technologies and HCL Technol-ogies.

India and Germany officially signed a stra-tegic partnership in 2000 and the two coun-tries have regular bilateral exchanges. The German Chancellor Merkel was in India for a three-day visit in 2015 at which a deal was signed to make trade easier through fast-track approvals. Prime Minister Modi visited Germany twice in 2017; on a state visit which included the bi-annual India-Germany Inter-governmental Constitution aimed at boosting economic co-operation and later to attend the G20 Summit in Hamburg. He then made another trip in April 2018, stopping over in Berlin on his return from the first India-Nordic Summit in Stockholm and the Commonwealth Heads of Government meeting in London.

During the Indo-German inter-governmen-tal negotiations in December 2017, Germany pledged around € 1,055m for development co-operation. This is to promote infrastruc-ture development, urban mobility and climate resilience as part of the Indian government’s ‘smart cities’ initiative. In August 2018, the German Ambassador to India, Martin Ney, and Finance Ministry Joint Secretary Kameer Kumar Khare signed agreements on financial and technical co-operation within this frame-work to mark 60 years of successful partner-ship. The focus, said the Ambassador, “is on sustainable urban development”. Environ-mental and resource protection are also areas to receive funding, along with social protec-tion, the promotion of Indian women entrepre-neurs, education and vocational training.

There is considerable demand in India for Vocational Education and Training (VET) and Germany is an important partner in reforming the system. The two countries are working together through Indo-German inter-govern-mental consultations to see which elements of Germany’s education system can be best adapted to meet this need, whilst there is an ever-increasing stream of talent flowing in the opposite direction. The number of Indian stu-dents in Germany more than tripled between 2011 and 2017 to 15,529; many of whom spe-cialise in Germany’s traditional strengths of

science, technology and engineering. Indeed, Indians now form the second largest group of international students enrolled at German universities.

In 2006, the Indo-German Energy Forum was founded by Chancellor Angela Merkel and former Indian Prime Minister Manmohan Sin-gh. It aims to promote and strengthen political dialogue on energy security, energy efficien-cy and renewable energy as well as joint re-search and development and is designed to contribute to the sustainable development of both countries. Both India and Germany see an opportunity to become world leaders in one of the 21st century’s growth industries: green energy. Thus, both countries have adopted policies to encourage the growth of renewable energy and energy efficient indus-tries and the Forum meets annually, chaired by the German Federal Ministry for Economic Affairs and Energy (BMWi) and the Indian Min-istry of Power (MOP).

The IGEF notes that, “India and Germany share the concern of adapting energy systems to limit Green House Gas Emissions… Ger-many has committed to reducing its overall and per capita emissions whilst India, whose growing economy will require an overall in-crease in energy supplies, has committed to keeping per capita emissions below the av-erage levels in the developed countries”. It is a reflection of the remarkable advances India has already made that its currently installed renewable energy capacity of 108 GW is just 4 GW behind Germany’s 112 GW.

India’s economy is beginning to get the rec-ognition it deserves, and we will surely see even greater bilateral trade and investment flows in future. At the start of this millennium, India wasn’t even amongst the world’s top ten economies. Less than 20 years later, it will have overtaken Mexico, Spain, South Korea, Netherlands, Brazil, Canada, Italy and France to be the sixth largest economy in the world after Germany.India is truly a land of opportunity.

POLITICAL CO-OPERATION AND ECONOMIC ENGAGEMENT

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REFERENCES

https://stats.oecd.org/

http://www.imf.org/external/pubs/ft/weo/2017/02/weodata/weoselgr.aspx

http://dipp.nic.in/sites/default/files/FDI_FactSheet_June2017_2_0.pdf

http://ec.europa.eu/eurostat/statistics-explained/index.php/India-EU_%E2%80%93_international_trade_in_goods_statistics

https://wits.worldbank.org

https://www.ciiblog.in/india-germany-trade-and-investment-relations/

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/ForeignTrade/Tables/Order-RankGermanyTradingPartners.pdf?__blob=publicationFile

https://www.bmwi.de/Redaktion/EN/Publikationen/facts-about-german-foreign-trade-2017.pdf?__blob=publicationFile&v=6

https://www.ey.com/Publication/vwLUAssets/ey-indian-investments-in-germany/$FILE/ey-indian-invest-ments-in-germany.pdf

http://www.whatsupgermany.de

https://indien.ahk.de/fileadmin/AHK_Indien/user_upload/PDFS/publication/Business_Monitor_2018.pdf

https://www.ey.com/Publication/vwLUAssets/ey-indian-investments-in-germany/$FILE/ey-indian-invest-ments-in-germany.pdf

http://www.makeinindiamittelstand.de/

https://www.daad.in/files/2017/11/Factsheet-India-20171201.pdf

https://www.giz.de/en/worldwide/15850.html

http://www.thedialogue.co/indo-german-bilateral-trade-goods/

https://india.diplo.de/in-en/themen/wirtschaft/economic-relations/1991398

http://ficci.in/international/75179/Project_docs/India-Germany.pdf

https://www.bmwi.de/Redaktion/EN/Publikationen/facts-about-german-foreign-trade-2017.pdf?__blob=publicationFile&v=6

https://worldview.stratfor.com/article/india-and-germany-partnership-be-reckoned

www.thomas-lloyd.com

Memberships and voluntary commitments

special report germany || india...trade and investment in india and look at the op - ... q3-2012...

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