India-Germany bilateral trade reaches record high of 30.8 billion euros; 59 percent of German companies want to invest more in India

German embassy officials gathered on Friday to talk about the German India Business Outlook survey conducted by multinational business services firm KPMG.

“More than 80 per cent of German companies participating in this survey expect revenue growth in India in the next five years. About 74 per cent of companies expect higher profits in India in the next five years,” Halusa said, citing the report.

According to the survey, 78 percent of companies expect sales to increase, and 55 percent expect higher profits. Companies' expectations for the next five years are even more positive: 82 percent expect turnover to increase and 74 percent expect higher profits.

Companies believe that growth rates will be very dynamic: by 2029, 37 percent of respondents expect sales to grow by more than 20 percent and 25 percent expect profits to grow by more than 20 percent.

Highlighting the large number of German companies operating in India, he said that as per the database, currently around 2000 German companies are operating in the country. Many of these companies are engaged in the fields of automobiles, automotive supplies, engineered solutions, electric chemicals and pharmaceuticals.

Talking about the challenges faced by German companies, he said the complexity of licensing and changing rules in each state trouble companies, especially those operating from multiple locations in the country.

Bilateral trade between India and Germany reached a new record high of 30.8 billion euros in 2023. Direct and indirect investments made by German companies in India also reached a new record high of 23.9 billion euros in 2022.

According to the German India Business Outlook Survey, companies surveyed plan to expand their investments in India in the coming years, attracted by the country's low labour costs, political stability and availability of skilled workers.

59 percent of the companies surveyed are planning to increase their investment this year. This is 23 percent more than in 2021.

It was found that the investment intentions of German companies have also increased significantly compared to last year.

However, the survey highlights obstacles such as bureaucracy, corruption and complex tax system that are hampering the investment intentions of these companies. Despite these challenges, German companies are confident about their long-term prospects in India, the survey said.

In a recent edition of an editorial in AHK, the business magazine of the Indo-German Chamber of Commerce, Stefan Halusa, Director General of the Indo-German Chamber of Commerce, highlighted industrial innovation and workforce development as two key areas where the two companies can cooperate.

“India's growing industrial sector will require large numbers of skilled workers. In contrast, Germany faces a shortage of skilled workers while its youth lack education,” the report said.