EUROPEAN POWERHOUSE MEETS EMERGING INDIA

The Economic Times

Trade relations between India and Germany is said to go back to the 16th and the18th centuries when a number of German companies were established with the express purpose of trading with Indian and other East Asian nations. In the 19th century it was a German company which built the first telegraph connection between Calcutta and London.

Today, Germany is India’s largest trading partner among the 27-member European Union and the 7th largest foreign investor in India with a cumulative FDI of Euro 1.27 billion. In 2006, the total volume of trade between India and Germany crossed the Euro 10 billion mark. It reached the Euro 12.07 billion in 2007 and the strong trend continues in 2008 too.

For the period of January to June 2008, Indo-German trade recorded a high growth rate of 17 percent as against 15.7 percent in 2007. German exports to India rose to Euro 4.1 billion (up by 22.5 percent) from Euro 3.3 billion in 2007. Imports from India recorded a 9.2 percent increase to reach a figure of Euro 2.6 billion from Euro 2.1 billion in the same period in 2007. Germany has also been an important development cooperation partner for India. Nearly 1600 Indo-German collaboration agreements and 600 Indo-German joint ventures are presently in operation.

Germany’s worldwide export volume in 2006 recorded 888 billion euros, well ahead of the USA, and made Germany again the number one exporter in the world. Despite this less than one percent of German foreign trade is exchanged with India.

Several large German companies are re-investing their profits made in India (These re-investments are not reflected in the figures of approved German FDI in India).