German investments in India
German industry, right from the beginning, was always more than a supplier of goods to India. Periods of high exports were always accompanied by large flows of investment and technology. Since liberalisation started in 1991 the new spurt of German exports to India has led to an equally impressive boost in new investment and technical cooperation projects.
Among foreign investors in India, Germany ranks 8th with total investment of approximately $3.9 billion since August 1991.
Since April 2000, a cumulative figure of $3051 million has been invested by German firms into India. Despite the recession, German investors continued to show great interest in India during 2008-09, when they invested an all-time high amount of $629 million, showing an increase of 32 per cent over 2007-08. In 2009-2010, the dollar figure fell to $626 million, even as the investment into India grew marginally. In line with the negative growth of total Foreign Direct Investment in India, Foreign investments from Germany also fell recording only USD 200 Million.
But this is predicted to grow. According to the Business Monitor survey, conducted on behalf of the Indo-German Chamber of Commerce (IGCC), German investors in India take a positive long-term view of the Indian market and continue to invest in their operations to tap growth opportunities. 27 per cent of all surveyed managers indicated plans to strongly increase their investment activity in India during the next three years. 46 per cent plan a moderate further increase. Only 28 per cent want to keep their investment activity at a constant level. None of the respondents plan to decrease investments in India or to withdraw from this market.
Top sectors attracting FDI inflows in India are Transportation industry, electric equipment, metallurgical industries, fuels, services sector. Chemicals, construction activities, trading, automobiles are other important sectors.
Maharashtra with 57 per cent share of German investments remains to be the most attractive destination of German investments in India. Pune has lately become the hotbed for German investments. Karnataka and Gujarat are other important destinations. Delhi and Andhra Pradesh have, however, experienced a drop in the investments from Germany. Southern states like Tamil Nadu and Karnataka are seen to be gaining popularity due to the conducive investment environment.
As per the database on registered German companies with the IGCC, there are 1,280 German companies in India, which have created more than 200,000 jobs.
Last Updated: Aug 2011
