Minister for Economic Affairs Robert Habeck is in India to intensify economic cooperation with one of the fastest-growing markets in the world. At a time when reducing dependencies on China is a priority, India offers promising opportunities. “India is a fast-growing economy, a country full of potential”, explained Habeck before his departure.
Nevertheless, India will not become a second China any time soon – everyone is aware of that. Nevertheless, the Asia-Pacific Conference (APC) and the government consultations in New Delhi offer German businesses the opportunity to build a strategic alternative to China. Our China.Table editors Julia Fiedler and Amelie Richter accompany the Asia-Pacific Conference on-site and offer you exclusive insights into the developments.
Today you can read an interview with Philipp Ackermann, the German ambassador to India. Around 2,200 German companies are active in India. These include not only “the big ones”, as Ackermann says, but also a large number of SMEs that are particularly interested in digitalization here.
They feel comfortable, but the region is not without its challenges: “Internal tensions and infrastructure deficits sometimes make cooperation difficult”, says the ambassador. And India’s geopolitical ambitions could also cause complications. The BRICS summit in Kazan, Russia, where Prime Minister Modi presented himself alongside Xi Jinping and Vladimir Putin, at least for the cameras, gives an impression of this.
Robert Habeck is on his way to the Indian capital New Delhi to explore new opportunities for the German economy. Last but not least, this is also about de-risking – new options to reduce Germany’s dependency on China. The mission is complex and multifaceted: “India is a fast-growing economy, a country full of potential”, said Habeck shortly before taking off from Berlin.
After landing in the Indian metropolis early Thursday morning, the Asia-Pacific Conference of German Business (APK) and the Indo-German Government Consultations await him together with Federal Chancellor Olaf Scholz and four other ministers. India is seen as a potential new alternative to China as an investment location. However, Habeck is aware of the pitfalls on the path to deeper economic integration: internal tensions and conflicts on the Asian continent and human rights problems also make the region a challenge, said the minister.
While the German delegation is on its way to India, India’s Prime Minister is still at the BRICS summit in Kazan, Russia. Narendra Modi is smiling into the cameras alongside China’s head of state Xi Jinping and Russia’s President Vladimir Putin. “Of course, from a German perspective, there are also many conflicts and problems to discuss: sanctions, compliance with sanctions, circumvention of sanctions”, said Habeck. Before taking off, the minister warned of a world trade that is “increasingly splitting into two camps”.
The APK takes place every two years and is hosted alternately by countries in the Asia-Pacific region. It is organized by the Asia-Pacific Committee of German Business (APA), the Federal Ministry of Economics and Technology and the Chambers of Foreign Trade. India is hosting the 18th APK and welcomes representatives from politics and business.
“Asia plays a key role: no other region in the world will grow faster over the next five years. By 2050, the Asia-Pacific region will contribute around half of global GDP“, says Roland Busch, CEO of Siemens AG and co-chair of the APK with Habeck. “In an interconnected world, we need to build strong partnerships, especially in the Asia-Pacific region, to jointly master the challenges of digitalization, decarbonization and demographic change.”
In addition to Vice-Chancellor Habeck, a delegation of business representatives boarded the government plane bound for India. Another member of the cabinet is also on board: Labor Minister Hubertus Heil. In New Delhi, the group will be even larger: Federal Chancellor Olaf Scholz will travel to the Indo-German intergovernmental consultations, which are taking place parallel to the APK. Foreign Minister Annalena Baerbock, Defense Minister Boris Pistorius and the Federal Minister of Education and Research, Bettina Stark-Watzinger, will also be there.
Labor Minister Heil is counting on skilled workers from the Asian country. “Germany needs more economic dynamism”, said Heil at the start of the trip. This also includes protection against a shortage of labor and skilled workers. “India is an ideal partner for this.” Among other things, Heil will visit a bakery in Delhi.
One of the topics at the high-level talks will be the free trade agreement between the EU and India. Talks on this have been going on for years – but they do not always bear fruit: the negotiations have already been stuck for an agonizingly long time. Chancellor Scholz’s visit is intended to give them a new impetus. German industry has high hopes for the intergovernmental consultations.
“A free trade agreement would be the lever to promote economic growth and innovation“, emphasizes APK Chairman Busch. “This year’s APK in Delhi offers us a unique opportunity to talk openly about existing hurdles on both sides and take a big step towards this goal. The fact that the bilateral government consultations are taking place in Delhi at the same time provides a very special momentum for this.”
India is the world’s largest democracy and has overtaken China as the world’s most populous country. India is also moving forward economically: last year its economy grew by 7.8 percent, this year it is expected to grow by around seven percent. India ranks 23rd among Germany’s most important trading partners. Machinery from Germany, including pumps and compressors as well as machinery for the textile industry, is particularly in demand in India. However, India also imports aircraft and parts, chemical products and electrical engineering from Germany. Germany, in turn, mainly imports chemical and pharmaceutical products from India, as well as machinery, clothing, fuel and electronics.
The Indo-German trade volume amounted to around €30 billion in 2023. By comparison, Germany traded goods worth more than €250 billion with its most important economic partner China in the same year – around eight times as much as with India. However, this has resulted in a high level of dependency for the German economy, which is to be reduced due to increasing geopolitical risks. India is seen as an important partner for diversification.
Last year, Germany ranked ninth in terms of foreign direct investment in India, and the signals coming from companies are positive. According to a recent KPMG study in collaboration with the Indo-German Chamber of Commerce, 78% of the companies surveyed are planning new investments in India by 2029. 59% of companies that are already active in India want to expand their investments.
This time, the APK is taking place in India, the country to which you are ambassador. What impetus do you hope to gain from this conference?
I believe that the choice of location in these times sends a very clear message to India that the German economy in Asia is more interested in India. There are various reasons for this: One of them is the rapid development that is taking place here. Another is certainly what is happening in or with China. I believe that this APK reflects the mood that people are looking more towards India. I don’t believe that we will turn India into a second China in the shortest possible time in terms of economic figures. But at the same time, I can see that the Indo-German trade volume can continue to grow.
What is the current state of Indo-German trade relations?
We have a trade volume of $33 billion. That is by far the largest trade volume of any EU country with India. Moreover, the flows in both directions are quite balanced. Our Chamber of Commerce has six offices across the country, it is the largest foreign chamber of commerce in Germany. Around 2,200 German companies are active in India. Among them are not only the big ones, but also a lot of medium-sized companies that are particularly interested in digitalization here. Overall, it can be said that the German economy feels at home in India.
What do you attribute this to?
The Chamber of Commerce has just conducted its annual survey with KPMG. The mood has been on the rise for years. The German economy wants to invest in India: 80 percent of companies believe that this is the right thing to do. But you also have to realize that the volume of German trade with China is around €350 billion, which is more than ten times as much. So India is still a growth market and there is still a lot that can be done.
What kind of companies are setting up here?
There are a few interesting companies in the renewable energy sector, for example Siemens Energy and Enercon, as well as smaller companies such as Verbio. Many have located their research and development departments here. Mercedes-Benz, for example, employs 8,000 engineers in Bangalore in a research center that focuses on autonomous driving and driving safety for global production. Siemens Healthineers is also building a huge center here. There is a huge amount of investment, particularly in the digital sector. SAP employs more engineers in India than in Germany. You can tell that this is a very interesting location for many.
What makes India such an attractive location for German companies?
The level of education in the technical fields is exceptionally high. The people who come out of the universities are well-educated, motivated and ready to work. Indian technical universities, especially at the top end, are well-positioned internationally. The top earners are worldly and English-speaking, often having studied abroad, which is a great advantage. The infrastructure is also improving enormously: the digital infrastructure and the physical infrastructure such as airports, railways and roads.
So why don’t more companies go to India?
There are still some deficits, particularly in the area of infrastructure. The legal procedures for investments are also sometimes cumbersome. Although the rule of law works in India, the procedures are often too slow, which is of course an obstacle to investment.
There are always accusations of erratic bureaucracy – regulations that are set very unexpectedly and overnight and are perhaps not always economically rational from the industry’s point of view. Of course, there are also political reasons for this, China being one of them.
How sustainable is the Indo-German partnership?
This is a very interesting and beautiful partnership because it is so concrete. It has been booked for almost ten years with ten billion euros. In times of tight budgets here and elsewhere, this shows how seriously we take the partnership. It is important to note that 95 percent of this is in the form of loans. It is not development aid in the traditional sense. These are KfW loans, which are extremely popular here because of their very favorable interest rates. Indian banks charge horrendous interest rates and a KfW loan like this is an interesting alternative for the government.
The partnership consists of three main areas. Firstly, renewable energies with projects in which suppliers or energy companies switch to more renewables with the help of German loans. Secondly, the smart city. Every day, 1,000 people migrate to Delhi. We support the city’s focus on expanding public transportation and renewables. The third pillar is biodiversity. Here we support projects for forests, agriculture, nature parks and biodiversity.
We will launch a website for the government consultations that will make these projects tangible and understandable. As I said, the charm of the partnership is that it is so concrete and based on individual projects that cover the whole of India.
China is not included. What is the state of China-India relations?
The Chinese were never really present at APKs, except for those that took place in China itself. Relations between India and China are not at their best. There is little direct contact. The Border Mechanism, a kind of commission to resolve border demarcation from both sides, meets every now and then, but overall there is hardly any bilateral contact between China and India. From India’s point of view, China is the biggest foreign policy problem. However, it is good news that joint patrols have now been resumed for the first time since 2020.
How do you rate China in the Indian market, in competition with German and European companies? For example, in terms of cars, electronics, mechanical engineering and the like.
The volume of trade between India and China is similar to that between the US and India. And it continues to grow. There is quite an imbalance: About 80 percent of the trade volume comes from China, and 20 percent goes to China. I believe that the Indian market cannot do without China.
Another example: 90 percent of our generic drugs come from India, but again 90 percent of these generic drugs are produced with components from China. It is similar with solar panels – India is now starting to set up its own production. This is an important national goal, but the cells are actually still all from China. So there is a huge dependency. The Indian side says that the Chinese are not allowed to invest here, unlike in Europe. Trade flows can be cut, and that can be done quickly if things get dicey. But you want to hide the investments.
Are de-risking from China and overcapacity in India also an issue like in Germany?
Overcapacity is not a problem here. One goal of the people in India – based on their self-image and self-confidence – is to promote their economy to the outside world. At the same time, they come from a strongly protectionist economic policy. The Indian car industry, for example, would not even exist if the government had not been so protectionist when it came to car imports. This is at odds with what the Indian economy actually wants. Because that includes free trade. De-risking is more of an incentive. However, because investment activity is not so high, they themselves are not so strongly affected by it.
Is de-risking reflected in an influx of German companies to India?
Speaking purely anecdotally, I have noticed that many companies – including SMEs – are saying that they perhaps need to establish another foothold in Asia. Many other countries are competing with India: Indonesia and Malaysia, Singapore and Vietnam, for example. These are all countries that the German economy sees quite positively. India is a very federally organized country, comparable to Germany. Many Indian provincial governments offer incentives to attract SMEs. For the German economy, not everything necessarily boils down to India. But we are already noticing that interest in the country is growing.
Ute Marita Meissner (Josef Meissner GmbH, Cologne): The company builds systems for the chemical and explosives industries. The medium-sized company has been in existence for almost 100 years and has put over 600 systems into operation.
How are you experiencing the development of your business in India?
Positive! We have been active there for around 50 years, for example in Kolkata and Vellore. India is one of the biggest players and will be even more so in the future – the country is undergoing rapid development. In this respect, it is a major market for German industry and SMEs.
Do you also experience difficulties?
There is a lot of bureaucracy, and we have already rejected projects because of it. As a German company, you also cannot guarantee what happens within the supply chains of Indian suppliers. That poses a risk, especially in terms of liability issues.
What are your expectations for the APK?
It is important to be on site to see what is happening and what the general conditions and environment are like. Also in exchange with others.
Karl Bitzer (DELO Industrie Klebstoffe GmbH /Windach): The company is one of the leading manufacturers of high-tech adhesives and associated dosing and curing equipment. The company’s products are primarily used in the automotive, consumer electronics and semiconductor industries.
How do you experience the development of your business with India?
Progress is being made step by step. We hope that the high-tech sector will become even more dynamic. However, the development of our products is currently still taking place outside the country.
How important is de-risking for you?
When it comes to de-risking, India is definitely one of the locations to increase independence from China. Our customers continue to invest in China because the focus is on local for local. We are therefore also continuing to invest in China, but are also looking at other markets. After all, we naturally want to grow in the markets that arise outside of China
What are your expectations for the APK?
It’s about maintaining existing contacts and making new ones. And I would like to exchange views on India: Is the image we have in our heads as a company confirmed? Or are there new insights and approaches and do we need to revise our image because, for example, things are much more dynamic than we think?
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi want to promote cooperation between their countries and contribute more to conflict resolution. The two heads of state met on the sidelines of the BRICS summit in Kazan, Russia, for their first formal talks in five years. They signaled that relations between the Asian giants are gradually recovering from the diplomatic rift caused by the 2020 military clashes along their disputed Himalayan border.
Xi also called on the BRICS countries to deepen financial and economic cooperation, as the need to reform the international financial architecture is becoming increasingly urgent. The call was supported by Russia’s head of state Vladimir Putin, who is campaigning for closer cooperation between the partner countries, particularly in the financial sector. Previously, the Kremlin leader had repeatedly criticized the dominance of the US dollar and announced his intention to promote an independent payment and clearing system within the BRICS as an alternative to Swift.
Meanwhile, Xi Jinping called for a de-escalation of the Ukraine crisis. An expansion of the conflict zone must be avoided, he said. Xi also called for a ceasefire in Lebanon and the Gaza Strip, reaffirming a joint declaration by the heads of state and government present in Russia on Wednesday. According to the statement, the BRICS states are deeply concerned about the negative impact of “unlawful sanctions” on the global economy and worried about the ongoing conflicts in the Middle East and North Africa. However, a unified position of the Global South on Russia’s war in Ukraine cannot be derived from this, the Ukrainian Foreign Ministry commented. fpe/mcl/rtr
Alexander Hirschle’s working life began in an economic area that is still the subject of debate in European politics today: Mercosur. After writing his thesis for his economics degree at the University of Heidelberg on the economic association – with which the EU was already aiming for a free trade agreement at the time – he joined Germany Trade and Invest (GTAI), then known as the Federal Agency for Foreign Trade (BFAI), in 1998.
BFAI, now known as GTAI, is the German government’s economic development agency, which supports German companies on their way abroad, promotes Germany as a business location and assists foreign companies in setting up in the country. The Federal Republic of Germany is the sole shareholder of GTAI and is represented by the Federal Ministry of Economic Affairs and Climate Protection. As an editor, Alexander Hirschle initially worked from Germany on the regions of Latin America, the Middle East and Africa. His first post abroad took him to Brazil in 2002, where he headed the BFAI office for almost six years.
But then he was drawn to another region: “At the beginning of the 2000s, you read all this news about Asia’s economic progress and the Asian century. That fascinated me”, says Hirschle. When he was given the opportunity to manage the GTAI office in Bangkok in 2008, he moved to the Thai capital with his family. From there, he also looked after Laos, Cambodia and Myanmar in addition to Thailand. “That was my introduction to Asia.”
This has now turned into 16 years: After Bangkok, Hirschle became Director for the Asia-Pacific region at the GTAI headquarters in Bonn in 2011, subsequently moving to Seoul and Taipei, from where he reported on economic developments in Taiwan and the Philippines. Since July of this year, he has been in charge of the newly established GTAI hub in Singapore. The business development agency has six offices in the Southeast Asia region, in Bangkok, Hanoi, Jakarta, Kuala Lumpur, Manila and Singapore.
“For German companies, Singapore is the classic entry point for Southeast Asia”, explains Alexander Hirschle. With the new hub, the GTAI is attempting to analyze the Asean region from a bird’s eye view. “If a company now wants to de-risk or diversify and move towards ASEAN, it doesn’t necessarily have to go straight into the individual countries, but we can also provide the company with concrete information according to its specific situation.”
Important sectors and trends are to be viewed comparatively across all Southeast Asian countries from Singapore. “This is because the ten ASEAN member states go through all stages of development, from developing countries to emerging economies. There are also countries rich in raw materials, such as Indonesia, as well as absolutely high-tech economies like Singapore.”
However, the “elephant” in the Asian region is still missing from Hirschle’s list of places to work: “China hasn’t come up for me yet, but I would be very interested in it professionally.” However, the People’s Republic has always played a role in his previous jobs. “China has an incredible regional influence, in Korea, in South East Asia and, of course, in Taiwan. You automatically become very involved with China and developments there.”
Alexander Hirschle lived in Taipei for five years before moving to Singapore. “The perception of danger on the ground is relatively low in everyday life”, says Hirschle. He regularly spoke to think tanks and institutions about the “mixed situation” in the Taiwan Strait. “I was much more nervous in parts of South Korea. The ‘perceived danger’ there is much more immanent due to the proximity.” In Singapore, Hirschle says he is still in the familiarization phase. “I have to say, of all the countries I’ve seen, Singapore is by far the most competitive, everything is even more intense and faster.”
But it’s not just European companies that are looking for their place in the ASEAN region: “China’s market share is increasing massively in this market. Beijing sees this as a great opportunity.” The growth rates are high, the population is young and growing. “This means that middle classes are emerging that are interesting customers for Chinese goods.” Chinese e-vehicles, for example, will be produced in Thailand in the future. However, according to Hirschle, the USA is still ahead in terms of investment. A third of FDI last year came from the United States. Only eight percent came from China.
In his new home of Singapore, Hirschle is particularly fond of the famous street food stalls (“hawker stalls”). In the otherwise somewhat artificial-looking city, he appreciates the authentic atmosphere of the small food stalls. For all his stops, Hirschle has tried to learn the language as much as possible and read up on the country’s history. He believes it is essential that more is read and taught about the history of Asian countries in Europe. “I would like to see much more attention paid to different perspectives in Asia.” The world region is becoming increasingly important – and this is the only way to understand each other better and avoid misunderstandings. Amelie Richter
If you want to pay a visit to the temple of Hanuman, also known as the monkey god, during your trip to Delhi, you first have to enter this maw. The Hanuman Mandir near Connaught Place is not only a sacred temple for praying, but also an Eldorado for real monkeys, who patiently wait there for the next snack from visitors.
Minister for Economic Affairs Robert Habeck is in India to intensify economic cooperation with one of the fastest-growing markets in the world. At a time when reducing dependencies on China is a priority, India offers promising opportunities. “India is a fast-growing economy, a country full of potential”, explained Habeck before his departure.
Nevertheless, India will not become a second China any time soon – everyone is aware of that. Nevertheless, the Asia-Pacific Conference (APC) and the government consultations in New Delhi offer German businesses the opportunity to build a strategic alternative to China. Our China.Table editors Julia Fiedler and Amelie Richter accompany the Asia-Pacific Conference on-site and offer you exclusive insights into the developments.
Today you can read an interview with Philipp Ackermann, the German ambassador to India. Around 2,200 German companies are active in India. These include not only “the big ones”, as Ackermann says, but also a large number of SMEs that are particularly interested in digitalization here.
They feel comfortable, but the region is not without its challenges: “Internal tensions and infrastructure deficits sometimes make cooperation difficult”, says the ambassador. And India’s geopolitical ambitions could also cause complications. The BRICS summit in Kazan, Russia, where Prime Minister Modi presented himself alongside Xi Jinping and Vladimir Putin, at least for the cameras, gives an impression of this.
Robert Habeck is on his way to the Indian capital New Delhi to explore new opportunities for the German economy. Last but not least, this is also about de-risking – new options to reduce Germany’s dependency on China. The mission is complex and multifaceted: “India is a fast-growing economy, a country full of potential”, said Habeck shortly before taking off from Berlin.
After landing in the Indian metropolis early Thursday morning, the Asia-Pacific Conference of German Business (APK) and the Indo-German Government Consultations await him together with Federal Chancellor Olaf Scholz and four other ministers. India is seen as a potential new alternative to China as an investment location. However, Habeck is aware of the pitfalls on the path to deeper economic integration: internal tensions and conflicts on the Asian continent and human rights problems also make the region a challenge, said the minister.
While the German delegation is on its way to India, India’s Prime Minister is still at the BRICS summit in Kazan, Russia. Narendra Modi is smiling into the cameras alongside China’s head of state Xi Jinping and Russia’s President Vladimir Putin. “Of course, from a German perspective, there are also many conflicts and problems to discuss: sanctions, compliance with sanctions, circumvention of sanctions”, said Habeck. Before taking off, the minister warned of a world trade that is “increasingly splitting into two camps”.
The APK takes place every two years and is hosted alternately by countries in the Asia-Pacific region. It is organized by the Asia-Pacific Committee of German Business (APA), the Federal Ministry of Economics and Technology and the Chambers of Foreign Trade. India is hosting the 18th APK and welcomes representatives from politics and business.
“Asia plays a key role: no other region in the world will grow faster over the next five years. By 2050, the Asia-Pacific region will contribute around half of global GDP“, says Roland Busch, CEO of Siemens AG and co-chair of the APK with Habeck. “In an interconnected world, we need to build strong partnerships, especially in the Asia-Pacific region, to jointly master the challenges of digitalization, decarbonization and demographic change.”
In addition to Vice-Chancellor Habeck, a delegation of business representatives boarded the government plane bound for India. Another member of the cabinet is also on board: Labor Minister Hubertus Heil. In New Delhi, the group will be even larger: Federal Chancellor Olaf Scholz will travel to the Indo-German intergovernmental consultations, which are taking place parallel to the APK. Foreign Minister Annalena Baerbock, Defense Minister Boris Pistorius and the Federal Minister of Education and Research, Bettina Stark-Watzinger, will also be there.
Labor Minister Heil is counting on skilled workers from the Asian country. “Germany needs more economic dynamism”, said Heil at the start of the trip. This also includes protection against a shortage of labor and skilled workers. “India is an ideal partner for this.” Among other things, Heil will visit a bakery in Delhi.
One of the topics at the high-level talks will be the free trade agreement between the EU and India. Talks on this have been going on for years – but they do not always bear fruit: the negotiations have already been stuck for an agonizingly long time. Chancellor Scholz’s visit is intended to give them a new impetus. German industry has high hopes for the intergovernmental consultations.
“A free trade agreement would be the lever to promote economic growth and innovation“, emphasizes APK Chairman Busch. “This year’s APK in Delhi offers us a unique opportunity to talk openly about existing hurdles on both sides and take a big step towards this goal. The fact that the bilateral government consultations are taking place in Delhi at the same time provides a very special momentum for this.”
India is the world’s largest democracy and has overtaken China as the world’s most populous country. India is also moving forward economically: last year its economy grew by 7.8 percent, this year it is expected to grow by around seven percent. India ranks 23rd among Germany’s most important trading partners. Machinery from Germany, including pumps and compressors as well as machinery for the textile industry, is particularly in demand in India. However, India also imports aircraft and parts, chemical products and electrical engineering from Germany. Germany, in turn, mainly imports chemical and pharmaceutical products from India, as well as machinery, clothing, fuel and electronics.
The Indo-German trade volume amounted to around €30 billion in 2023. By comparison, Germany traded goods worth more than €250 billion with its most important economic partner China in the same year – around eight times as much as with India. However, this has resulted in a high level of dependency for the German economy, which is to be reduced due to increasing geopolitical risks. India is seen as an important partner for diversification.
Last year, Germany ranked ninth in terms of foreign direct investment in India, and the signals coming from companies are positive. According to a recent KPMG study in collaboration with the Indo-German Chamber of Commerce, 78% of the companies surveyed are planning new investments in India by 2029. 59% of companies that are already active in India want to expand their investments.
This time, the APK is taking place in India, the country to which you are ambassador. What impetus do you hope to gain from this conference?
I believe that the choice of location in these times sends a very clear message to India that the German economy in Asia is more interested in India. There are various reasons for this: One of them is the rapid development that is taking place here. Another is certainly what is happening in or with China. I believe that this APK reflects the mood that people are looking more towards India. I don’t believe that we will turn India into a second China in the shortest possible time in terms of economic figures. But at the same time, I can see that the Indo-German trade volume can continue to grow.
What is the current state of Indo-German trade relations?
We have a trade volume of $33 billion. That is by far the largest trade volume of any EU country with India. Moreover, the flows in both directions are quite balanced. Our Chamber of Commerce has six offices across the country, it is the largest foreign chamber of commerce in Germany. Around 2,200 German companies are active in India. Among them are not only the big ones, but also a lot of medium-sized companies that are particularly interested in digitalization here. Overall, it can be said that the German economy feels at home in India.
What do you attribute this to?
The Chamber of Commerce has just conducted its annual survey with KPMG. The mood has been on the rise for years. The German economy wants to invest in India: 80 percent of companies believe that this is the right thing to do. But you also have to realize that the volume of German trade with China is around €350 billion, which is more than ten times as much. So India is still a growth market and there is still a lot that can be done.
What kind of companies are setting up here?
There are a few interesting companies in the renewable energy sector, for example Siemens Energy and Enercon, as well as smaller companies such as Verbio. Many have located their research and development departments here. Mercedes-Benz, for example, employs 8,000 engineers in Bangalore in a research center that focuses on autonomous driving and driving safety for global production. Siemens Healthineers is also building a huge center here. There is a huge amount of investment, particularly in the digital sector. SAP employs more engineers in India than in Germany. You can tell that this is a very interesting location for many.
What makes India such an attractive location for German companies?
The level of education in the technical fields is exceptionally high. The people who come out of the universities are well-educated, motivated and ready to work. Indian technical universities, especially at the top end, are well-positioned internationally. The top earners are worldly and English-speaking, often having studied abroad, which is a great advantage. The infrastructure is also improving enormously: the digital infrastructure and the physical infrastructure such as airports, railways and roads.
So why don’t more companies go to India?
There are still some deficits, particularly in the area of infrastructure. The legal procedures for investments are also sometimes cumbersome. Although the rule of law works in India, the procedures are often too slow, which is of course an obstacle to investment.
There are always accusations of erratic bureaucracy – regulations that are set very unexpectedly and overnight and are perhaps not always economically rational from the industry’s point of view. Of course, there are also political reasons for this, China being one of them.
How sustainable is the Indo-German partnership?
This is a very interesting and beautiful partnership because it is so concrete. It has been booked for almost ten years with ten billion euros. In times of tight budgets here and elsewhere, this shows how seriously we take the partnership. It is important to note that 95 percent of this is in the form of loans. It is not development aid in the traditional sense. These are KfW loans, which are extremely popular here because of their very favorable interest rates. Indian banks charge horrendous interest rates and a KfW loan like this is an interesting alternative for the government.
The partnership consists of three main areas. Firstly, renewable energies with projects in which suppliers or energy companies switch to more renewables with the help of German loans. Secondly, the smart city. Every day, 1,000 people migrate to Delhi. We support the city’s focus on expanding public transportation and renewables. The third pillar is biodiversity. Here we support projects for forests, agriculture, nature parks and biodiversity.
We will launch a website for the government consultations that will make these projects tangible and understandable. As I said, the charm of the partnership is that it is so concrete and based on individual projects that cover the whole of India.
China is not included. What is the state of China-India relations?
The Chinese were never really present at APKs, except for those that took place in China itself. Relations between India and China are not at their best. There is little direct contact. The Border Mechanism, a kind of commission to resolve border demarcation from both sides, meets every now and then, but overall there is hardly any bilateral contact between China and India. From India’s point of view, China is the biggest foreign policy problem. However, it is good news that joint patrols have now been resumed for the first time since 2020.
How do you rate China in the Indian market, in competition with German and European companies? For example, in terms of cars, electronics, mechanical engineering and the like.
The volume of trade between India and China is similar to that between the US and India. And it continues to grow. There is quite an imbalance: About 80 percent of the trade volume comes from China, and 20 percent goes to China. I believe that the Indian market cannot do without China.
Another example: 90 percent of our generic drugs come from India, but again 90 percent of these generic drugs are produced with components from China. It is similar with solar panels – India is now starting to set up its own production. This is an important national goal, but the cells are actually still all from China. So there is a huge dependency. The Indian side says that the Chinese are not allowed to invest here, unlike in Europe. Trade flows can be cut, and that can be done quickly if things get dicey. But you want to hide the investments.
Are de-risking from China and overcapacity in India also an issue like in Germany?
Overcapacity is not a problem here. One goal of the people in India – based on their self-image and self-confidence – is to promote their economy to the outside world. At the same time, they come from a strongly protectionist economic policy. The Indian car industry, for example, would not even exist if the government had not been so protectionist when it came to car imports. This is at odds with what the Indian economy actually wants. Because that includes free trade. De-risking is more of an incentive. However, because investment activity is not so high, they themselves are not so strongly affected by it.
Is de-risking reflected in an influx of German companies to India?
Speaking purely anecdotally, I have noticed that many companies – including SMEs – are saying that they perhaps need to establish another foothold in Asia. Many other countries are competing with India: Indonesia and Malaysia, Singapore and Vietnam, for example. These are all countries that the German economy sees quite positively. India is a very federally organized country, comparable to Germany. Many Indian provincial governments offer incentives to attract SMEs. For the German economy, not everything necessarily boils down to India. But we are already noticing that interest in the country is growing.
Ute Marita Meissner (Josef Meissner GmbH, Cologne): The company builds systems for the chemical and explosives industries. The medium-sized company has been in existence for almost 100 years and has put over 600 systems into operation.
How are you experiencing the development of your business in India?
Positive! We have been active there for around 50 years, for example in Kolkata and Vellore. India is one of the biggest players and will be even more so in the future – the country is undergoing rapid development. In this respect, it is a major market for German industry and SMEs.
Do you also experience difficulties?
There is a lot of bureaucracy, and we have already rejected projects because of it. As a German company, you also cannot guarantee what happens within the supply chains of Indian suppliers. That poses a risk, especially in terms of liability issues.
What are your expectations for the APK?
It is important to be on site to see what is happening and what the general conditions and environment are like. Also in exchange with others.
Karl Bitzer (DELO Industrie Klebstoffe GmbH /Windach): The company is one of the leading manufacturers of high-tech adhesives and associated dosing and curing equipment. The company’s products are primarily used in the automotive, consumer electronics and semiconductor industries.
How do you experience the development of your business with India?
Progress is being made step by step. We hope that the high-tech sector will become even more dynamic. However, the development of our products is currently still taking place outside the country.
How important is de-risking for you?
When it comes to de-risking, India is definitely one of the locations to increase independence from China. Our customers continue to invest in China because the focus is on local for local. We are therefore also continuing to invest in China, but are also looking at other markets. After all, we naturally want to grow in the markets that arise outside of China
What are your expectations for the APK?
It’s about maintaining existing contacts and making new ones. And I would like to exchange views on India: Is the image we have in our heads as a company confirmed? Or are there new insights and approaches and do we need to revise our image because, for example, things are much more dynamic than we think?
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi want to promote cooperation between their countries and contribute more to conflict resolution. The two heads of state met on the sidelines of the BRICS summit in Kazan, Russia, for their first formal talks in five years. They signaled that relations between the Asian giants are gradually recovering from the diplomatic rift caused by the 2020 military clashes along their disputed Himalayan border.
Xi also called on the BRICS countries to deepen financial and economic cooperation, as the need to reform the international financial architecture is becoming increasingly urgent. The call was supported by Russia’s head of state Vladimir Putin, who is campaigning for closer cooperation between the partner countries, particularly in the financial sector. Previously, the Kremlin leader had repeatedly criticized the dominance of the US dollar and announced his intention to promote an independent payment and clearing system within the BRICS as an alternative to Swift.
Meanwhile, Xi Jinping called for a de-escalation of the Ukraine crisis. An expansion of the conflict zone must be avoided, he said. Xi also called for a ceasefire in Lebanon and the Gaza Strip, reaffirming a joint declaration by the heads of state and government present in Russia on Wednesday. According to the statement, the BRICS states are deeply concerned about the negative impact of “unlawful sanctions” on the global economy and worried about the ongoing conflicts in the Middle East and North Africa. However, a unified position of the Global South on Russia’s war in Ukraine cannot be derived from this, the Ukrainian Foreign Ministry commented. fpe/mcl/rtr
Alexander Hirschle’s working life began in an economic area that is still the subject of debate in European politics today: Mercosur. After writing his thesis for his economics degree at the University of Heidelberg on the economic association – with which the EU was already aiming for a free trade agreement at the time – he joined Germany Trade and Invest (GTAI), then known as the Federal Agency for Foreign Trade (BFAI), in 1998.
BFAI, now known as GTAI, is the German government’s economic development agency, which supports German companies on their way abroad, promotes Germany as a business location and assists foreign companies in setting up in the country. The Federal Republic of Germany is the sole shareholder of GTAI and is represented by the Federal Ministry of Economic Affairs and Climate Protection. As an editor, Alexander Hirschle initially worked from Germany on the regions of Latin America, the Middle East and Africa. His first post abroad took him to Brazil in 2002, where he headed the BFAI office for almost six years.
But then he was drawn to another region: “At the beginning of the 2000s, you read all this news about Asia’s economic progress and the Asian century. That fascinated me”, says Hirschle. When he was given the opportunity to manage the GTAI office in Bangkok in 2008, he moved to the Thai capital with his family. From there, he also looked after Laos, Cambodia and Myanmar in addition to Thailand. “That was my introduction to Asia.”
This has now turned into 16 years: After Bangkok, Hirschle became Director for the Asia-Pacific region at the GTAI headquarters in Bonn in 2011, subsequently moving to Seoul and Taipei, from where he reported on economic developments in Taiwan and the Philippines. Since July of this year, he has been in charge of the newly established GTAI hub in Singapore. The business development agency has six offices in the Southeast Asia region, in Bangkok, Hanoi, Jakarta, Kuala Lumpur, Manila and Singapore.
“For German companies, Singapore is the classic entry point for Southeast Asia”, explains Alexander Hirschle. With the new hub, the GTAI is attempting to analyze the Asean region from a bird’s eye view. “If a company now wants to de-risk or diversify and move towards ASEAN, it doesn’t necessarily have to go straight into the individual countries, but we can also provide the company with concrete information according to its specific situation.”
Important sectors and trends are to be viewed comparatively across all Southeast Asian countries from Singapore. “This is because the ten ASEAN member states go through all stages of development, from developing countries to emerging economies. There are also countries rich in raw materials, such as Indonesia, as well as absolutely high-tech economies like Singapore.”
However, the “elephant” in the Asian region is still missing from Hirschle’s list of places to work: “China hasn’t come up for me yet, but I would be very interested in it professionally.” However, the People’s Republic has always played a role in his previous jobs. “China has an incredible regional influence, in Korea, in South East Asia and, of course, in Taiwan. You automatically become very involved with China and developments there.”
Alexander Hirschle lived in Taipei for five years before moving to Singapore. “The perception of danger on the ground is relatively low in everyday life”, says Hirschle. He regularly spoke to think tanks and institutions about the “mixed situation” in the Taiwan Strait. “I was much more nervous in parts of South Korea. The ‘perceived danger’ there is much more immanent due to the proximity.” In Singapore, Hirschle says he is still in the familiarization phase. “I have to say, of all the countries I’ve seen, Singapore is by far the most competitive, everything is even more intense and faster.”
But it’s not just European companies that are looking for their place in the ASEAN region: “China’s market share is increasing massively in this market. Beijing sees this as a great opportunity.” The growth rates are high, the population is young and growing. “This means that middle classes are emerging that are interesting customers for Chinese goods.” Chinese e-vehicles, for example, will be produced in Thailand in the future. However, according to Hirschle, the USA is still ahead in terms of investment. A third of FDI last year came from the United States. Only eight percent came from China.
In his new home of Singapore, Hirschle is particularly fond of the famous street food stalls (“hawker stalls”). In the otherwise somewhat artificial-looking city, he appreciates the authentic atmosphere of the small food stalls. For all his stops, Hirschle has tried to learn the language as much as possible and read up on the country’s history. He believes it is essential that more is read and taught about the history of Asian countries in Europe. “I would like to see much more attention paid to different perspectives in Asia.” The world region is becoming increasingly important – and this is the only way to understand each other better and avoid misunderstandings. Amelie Richter
If you want to pay a visit to the temple of Hanuman, also known as the monkey god, during your trip to Delhi, you first have to enter this maw. The Hanuman Mandir near Connaught Place is not only a sacred temple for praying, but also an Eldorado for real monkeys, who patiently wait there for the next snack from visitors.
