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Wednesday, February 28, 2024
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    Why India is suddenly so popular

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    Until now, China has been a place of longing for German companies. But suddenly India is becoming more and more popular. Economics Minister Habeck is also touring the subcontinent.

    Before Robert Habeck enters the headquarters of the German company SFC Energy not far from New Delhi, flower garlands are hung around his neck and candles are lit. After this welcome ritual in the merciless heat, we finally go into the air-conditioned building. The company based near Munich produces hydrogen-methanol fuel cells for power supply near New Delhi and is working with an Indian company that is opening the door to the market. SFC is one of around 2,000 German companies that are now active in India.

    In the morning, Habeck was already smiling in front of Indian and German flags on the sidelines of an Indian-German business meeting – as a background for the two contract signings of the German open-space photovoltaics company Next2Sun with Indian partners. “Can you perhaps say something briefly and explain what this is about?” asks Habeck CFO Sascha Krause-Tünker, looking at the large number of journalists present, “otherwise this seems quite strange.” His request was granted.

    While Habeck's visit to India continues the federal government's charm offensive, the country has steadily become more important for the German economy. The business delegation traveling with them raves about “dynamism” and “momentum” – even if two members put the brakes on euphoria to ntv.de, warn against excessive expectations and point out India's structural problems – such as bureaucracy and corruption.

    The reasons for the widespread optimism: India, as the world's most populous country, is a huge market that is growing rapidly. Germany also wants to become more independent of China and sees India as a key partner – especially since India also sees China as a strategic challenge.

    Proud of G20 presidency

    At the same time, the country is a very self-confident partner. This year India holds the presidency of the G20, the club of the most important industrialized and emerging countries. For the government led by Prime Minister Narendra Modi, this has great, not just symbolic, significance. Many Indians are proud of the growing importance of their country. This cannot be overlooked in New Delhi. The huge poster in the city center with the slogan “G20 – 1.4 billion people, a dream” and the G20 sticker of a colorful tuk-tuk taxi that fights its way through the traffic of India's capital, which is characterized by constant honking, unites the message : India has arrived at the top and among the most important countries.

    The subcontinent is attractive for the German economy for many reasons – for example in the area of ​​renewable energies. German company representatives consider the Indian government's commitment to say goodbye to fossil energy in the long term to be credible. On the one hand, renewables are a future technology. On the other hand, India wants to become independent of energy imports – and therefore produce the required energy in its own country. In addition, the consequences of climate change are particularly felt in India with record heat and heavy rainfall.

    Rapid economic development is particularly important for India – where many millions of people live in poverty. That's why, despite climate change, the country is also building 20 coal-fired power plants, and even more are planned. At the same time, a total of 500 gigawatts of renewable energy are to be added by 2030 – for this to succeed, the expansion must be accelerated. German industry representatives see this as a good opportunity.

    Hoping for a free trade agreement

    India wants to become an industrial country by 2047 – the 100th anniversary of independence. To achieve this ambitious goal, the current growth rates are not sufficient – although they are higher than in China. The Indian government is investing billions in expanding infrastructure such as airports, roads and digital networks.

    If you talk to German entrepreneurs who are active in India, you will hear: From their point of view, India's challenges offer them great opportunities. They also have hopes for the free trade agreement that the EU and India are currently negotiating.

    Half of the German companies that invest in India produce for the local market, not for export. What is also attractive for India: German companies are investing more and more money in research and development on the subcontinent. Growth is also necessary because India has a young population. Every year, new jobs have to be created for 10 to 13 million people – an ambitious task.

    Stefan Halusa, head of the German Chamber of Foreign Trade, sums up what appeals to German companies in India in one word: growth.

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