Indo-German business development – a current look at 2024
Germany and India are among the five largest economies in the world. The Indian economy has been growing at a high rate over the last few quarters. The Real GDP growth for the year 2023-24 was 8.2%. The forecast for the current year is a growth of 6.5%.
2024 heads-up on Indo-German Business: Booming markets in India promise good development of trade and investments between Germany and India
There are multiple engines driving the growth in India:
- India’s growing young middle class with a rising disposable income has been driving growth in consumption of both discretionary and non-discretionary products.
- The Government has large investments planned for infrastructure development across energy projects, ports and highways and urban infrastructure.
- Further, there is a renewed push for “Make in India”, making large investments in manufacturing attractive for the private sector.
German companies are planning increased investments to manufacture locally and market to the expanding Indian economy:
- The initial interest may have been because of the China+1 strategy for securing supplies. But now the size of the growing market, lower production costs and stable policies have led many German companies draw up big plans for India.
- In the last five years Germany has made investments of about Euro 15 billion in companies in India.
- So there is a strong movement of German companies which plan to make new investments in India this year.
Thus, the ZF group has announced plans to increase its sourcing of materials from India by 2030 to a number of Euro 2 billion for selling to local and international markets. Peter Laier, a member of ZF Group's management board, emphasized the importance of India in the company’s long-term strategy. "India's transportation needs are increasing, and we anticipate more vehicles on the roads in the future. Our investment is a long-term commitment, reflecting the growth potential we see in the region."
DHL eCommerce has announced plans to increase its presence in India backed by a Euro 250 million funding plan by 2030.
Hettich is investing in a new product to be launched in 2025 which will be made in India for the world. Mr. Andre Eckholt, MD, India, Middle East and Africa said “there is a growing economy and definitely our industry is growing. So if the entire world is struggling at the moment, the sun is shining right in India and we are happy to be part of this.”
Indian companies are also actively scouting for opportunities in Germany focussing on niche products and technologies which have a growing market in India. The largest number of transactions in the recent past have been in the automotive sector. Craftsman Automation acquired Fronberg Guss, Imperial Auto acquired Metallwerk Biebighaeuser and Suprajit acquired SCS Deutschland. Other deals include Infosys buying in-tech and Tarsons buying Nerbe R&D.
India and Germany are strong economic and strategic partners. The partnership is expected to be strengthened by the new investments and joint ventures between the two powerhouses. RSM Ebner Stolz is your capable partner to support you with your business activities both in Germany and in India. Based on our multidisciplinary approach at RSM, you can rely on our full range of audit, tax, consulting and legal services to help you succeed in Germany and India.
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