Trends in India India: Spotlight on Indo-German trade

A comparison of FDI in India since the launch of the ‘Make in India’ initiative in September last year to the corresponding period of October 2014–April 2015.

Since 1991, the year of liberalization, Germany is the 7th most important investing country for India with total investments amounting to around $8,316 mn accounting for almost 3.2% share of the total investment inflow into India. The country has consistently been among the top ten investing countries for India. During the last financial year (2014–15), it ranked 7th with investments to the tune of $1,125 mn. While overall foreign direct invest-ments (FDI) into India grew 27.3% during the last fiscal, inflows from Germany grew 8.4%.

Sector break up

The top sectors attracting FDI inflows from Germany during FY April 2014 to March 2015 are the automobile industry (20.6%), services sector (15.9%), construction (infrastructure) activities (15.6%), industrial machinery (6.2%) and drugs & pharmaceuticals (6.2%). These top five accounted for about 64.5% of the total inflows from Germany during the last fiscal year. About 1,634 financial collaborations have been approved for Germany since 1991 (7.8%) of a total of 21,018 for all countries. About 1,117 technical collaborations (13.7%) of Germany have been approved out of a total 8,151 for all countries since 1991.

During the financial year 2014-15, Maharashtra – 47.3%, Tamil Nadu – 26.9%, New Delhi – 12.7%, Karnataka – 4.25% and Andhra Pradesh – 0.8% were the top investment locations for German companies in India. Germany’s total investments into India during April 2014 to March 2015 amounted to $1,125 mn, accounting for over 3.6% of the total Indian investment inflows in that year.

The trade volume between India and Germany during the first half of 2015 grew a healthy 13.5% over the same period last year to reach a volume of nearly €8.8 bn. The significant increase in bilateral trade was mainly on account of the Indian imports from Germany which appreciated 18% (€4.9 bn) during the first half of this year, after registering a negative growth of

13.7% during January–June 2014.

On the other hand, Indian exports which had more or less remained at the same level during January–June 2014, posted a growth of 8.3% during the same period this year. Indian exports to Germany during January–June 2015 amounted to nearly €3.9 bn.

India imported machinery worth nearly €1,598 mn during the first half of 2015 (1st half 2014: €1,282 mn), which accounted for 32.6% of the total imports from Germany during this period. Chemical products formed the 2nd most important item with imports amounting to €592 mn (1st half 2014: €528 mn), and a share of 12.1%. Electro-technology products featured 3rd on the list, with imports worth €582 mn and a share of 11.9% (1st half 2014: €534 mn).

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