A giant statue of an Indian elephant dominates the stand of German cable maker Lapp at this year’s Hanover Fair, the world’s largest industrial trade show, which opened Monday.
Stuttgart-based Lapp and a host of other German industrial companies are lining up to tap into the growth potential of India, Asia’s third-biggest economy, which is the partner country of this year’s fair and is eagerly wooing foreign investors to help modernise its industry.
The family-run firm, with a workforce of 3,200, has been active on the densely populated sub-continent since the mid-1990s, believing that its democratic structures, patent protection laws and wide use of English make it an easier market to crack than, say, China, a company spokesman told AFP.
India’s Prime Minister Narendra Modi, on his first official visit to Germany this week, jointly opened the “Hannover Messe” with German Chancellor Angela Merkel.
“We will make it easy to make business in India,” Modi told invited politicians, business leaders and exhibiting companies at the opening ceremony on Sunday evening.
“The opportunities we offer are huge. For people in India, Germany is a valued partner and symbol of technology, innovation, quality,” Modi said.
For India, Asia’s number three economy after China and Japan, Germany is already the most important trading partner in Europe. But for Germany, Europe’s largest economy, India ranks just 25th on the list of countries it does business with.
Following a tour of the fair with Modi on Monday, Merkel acknowledged there was “still potential for German companies to grow in India”.
In concrete terms, bilateral trade between the two countries amounted to 16 billion euros ($16.9 billion) in 2014, with Germany exporting nearly 9.0 billion euros worth of goods to India.
The figure “could be increased sharply,” according to the BDI German industry federation.
For now, chemicals and machine tools make up the lion’s share of trade between the two countries. Germany also exports electrical goods to India, and imports textiles from the sub-continent.
– ‘Massive potential’ –
“For German companies, there’s massive potential in sectors such as energy, environment, medicine, IT and services,” said Volker Treier, responsible for foreign trade at Germany’s DIHK federation of chambers of commerce.
Modi’s promises of economic growth, job creation, regulatory and fiscal reform and infrastructure development could provide the necessary trigger to whet German companies’ appetite for the Indian market.
As part of a massive campaign to find new investors, New Delhi has come up with the slogan “Make in India”.
With other emerging economies such as China and Brazil already well saturated and dwindling investment opportunities in Russia, India is beginning to awaken investors’ interest.
DIHK estimates that German exports to India could grow by more than 10 percent after declining in recent years.
“One of the main stumbling blocks for German companies is the lack of infrastructure,” not only in energy, but also in roads, rail and shipping, BDI said.
Power supply was frequently unreliable, bureaucracy was heavy and there were also customs barriers, said DIHK.
But for Erich Nesselhauf of Daimler Commercial Vehicles India, it was primarily a question of being able to adapt.
“It’s not any more complicated than in Germany, just different,” he said.
Daimler chief executive Dieter Zetsche is one of the many business leaders who was set to meet Modi during the PM’s visit to Germany.
And the carmaker has invested 750 million euros in assembling trucks in India, with primarily India-made parts, since 2012 and more recently buses, under the brand name “BharatBenz”.
The trade fair runs through Friday.