India Germany Trade
India Germany Trade Agreement
Last updated: Mar, 2024
Introduction
Germany is India’s largest trading partner in Europe and one of the top trading countries worldwide. In the last decade, economic as well as political interaction has increased significantly between the two nations. India was among the first nations to establish diplomatic ties with Germany post the World War. Today, Germany is amongst India’s most important partners both bilaterally and in the global context. Major Indian exports to Germany include leather and leather goods, gems and jewellery, rubber products, auto components, and chemicals, amongst others. In the last decade, economic as well as political interaction has increased significantly between the two nations.
India-Germany Trade
- In 2022-23, India’s bilateral trade with Germany reached US$ 26 billion (+4.9%) with Indian exports at US$ 10.1 billion registering an increase of 2.5%.
- Indian imports from Germany reached US$ 15.9 billion registering an increase of 6.4%.
- Germany is currently the 12th largest trading partner for India in 2022-23.
- Germany is the 9th largest investor in India, with cumulative FDI inflows of US$ 14.37 billion from April 2000 to September 2023.
- Germany is India’s largest trading partner in Europe and has consistently been among India’s top (10-12) global partners.
- In FY23, German FDI in India was US$ 547 million.
- As per the Confederation of Indian Industry (CII), more than 213 Indian companies are operating in Germany and are involved in trading, manufacturing, R&D, and innovation, and services.
Major exported items from India to Germany with amount & quantity
- India exported 5,842 commodities to Germany in FY23.
- India’s export to Germany stood at US$ 10.13 billion in FY23.
- India’s exports to Germany stood at US$ 6.29 billion from April–November 2023.
- Major exported items from India to Germany include electrical machinery & equipment (US$ 725 million); followed by RMG cotton including accessories (US$ 571 million), telecom instruments (US$ 477 million), machinery for dairy (US$ 476 million), and products of iron and steel (US$ 471 million) in FY23.
- Major exported items from India to Germany include Engineering Goods (US$ 2.7 billion), Organic and Inorganic chemicals (US$ 565.4 million), Electronic Goods (US$ 544.5 million), Textiles (US$ 463.7 million) and Drugs and Pharmaceuticals (US$ 363.8 million) from April – November 2023.
Major imported items by India from Germany with amount & quantity
- India imported 5,955 commodities from Germany in FY23.
- Imports from Germany to India stood at US$ 15.93 billion in FY23.
- India's imports from Germany include machinery for dairy (US$ 1.96 billion); followed by aircraft, spacecraft, and parts (US$ 1.73 billion), medical and scientific instruments (US$ 872 million), electrical machinery and equipment (US$ 856 million), and auto components and parts (US$ 809 million) in FY23.
- India’s imports from Germany include nuclear reactors and parts thereof (US$ 3.16 billion), electrical machinery and equipment (US$ 1.43 billion), Aircraft and spacecraft parts (US$ 1.42 billion) and Optical, photographic cinematographic measuring, medical or surgical apparatus parts and accessories (US$ 1.08 billion) from April-November 2023.
- Imports from Germany to India stood at US$ 11.46 billion during April-November 2023.
Recent Trends & developments
- 6th Inter-Governmental Consultations: Prime Minister, Mr. Narendra Modi visited Berlin on May 2, 2022, to co-chair the 6th IGC with Chancellor Olaf Scholz where he was accompanied by External Affairs Minister, Finance Minister, National Security Advisor, and Minister of State (I/C) for Science & Technology. A total of 14 agreements were signed in diverse fields such as green partnership, development cooperation, renewable energy, migration and mobility, economic cooperation, and agriculture.
- ‘Make in India Mittelstand’ (MIIM) for German Mittelstand (SMEs) and Family-Owned Businesses is being implemented by the Embassy of India, Berlin to support high potential Mittelstand companies with medium to long-term potential for manufacturing in India. Since its inception in September 2015, 135+ companies have been facilitated through this program with a declared investment of nearly US$ 970 million.
- India and the EU restarted talks for a comprehensive free trade agreement earlier this year after a gap of nine years. The two sides concluded the first round of negotiations for Bilateral Trade and Investment Agreements (BTIA), including the Geographical Indicators (GI) on July 1, 2023.
- In May 2022, India and Germany agreed to a nearly US$ 10.65 billion partnership to strengthen financial and technical cooperation toward 2030 climate action and sustainable development goals. Prime Minister Narendra Modi and Chancellor Olaf Scholz signed a joint declaration of intent (JDI) establishing the Green and Sustainable Development Partnership (SDGs).
- German Federal Minister of Defence, Mr. Boris Pistorius visited India from June 5-8, 2023, wherein he had a bilateral meeting with the Raksha Mantri on June 6, 2023. He also visited Headquarters, Western Naval Command, Mumbai on 07 June 2023.
- In July 2023, on his visit to India, Germany's Vice Chancellor and Minister of Economic Affairs and Climate Action Mr. Robert Habeck said India and Germany want to further strengthen bilateral cooperation and increase investments and collaboration among companies.
- During the 9th Annual Meeting of the Indo-German Working Group on Quality Infrastructure held on April 25, 2023, India and Germany signed an agreement known as Work Plan 2023. The agreement focuses on enhancing quality infrastructure (QI) by addressing the various aspects of QI, such as standardization, accreditation, conformity assessment, legal metrology, product safety, and market surveillance.
- The number of German companies in India is growing annually, said German Consulate General Ms. Michaela Kuchler. The number of German companies in India in July 2022 was about 1,800 and it increased to almost 2,000 in July 2023.
Economic Cooperation and Investments
- Over the years, bilateral trade between the two countries has been increasing. Additionally, new business opportunities are also being explored and Germany invested more than US$ 14.12 billion in India between April 2000-March 2023. The German government provides funds of around US$ 1.06 billion (€1 billion) each year for economic cooperation with India. Key areas of investments have been transportation, electrical equipment, metallurgical industries, services sector (particularly insurance), chemicals, construction activity, trading, and automobiles. More than 1,600 Indo-German collaborations and 600 joint ventures are represented in the Indian marketplace.
- Robert Bosch to invest a total of US$ 125 million in India in the next five years towards the localization of advanced automotive technologies and in building digital platforms like Mobility Marketplace and Mobility Cloud Platform.
- German packaging solution provider Multivac invested US$ 7.4 million to establish a production site in Ghiloth, Rajasthan.
- As per the Indo-German Chamber of Commerce, there are more than 1,700 German companies in India. German investments in India have been mainly in sectors of transportation, electrical equipment, metallurgical industries, services sector (particularly insurance), chemicals, construction activity, trading, and automobiles.
- Chancellor of Germany, Mr. Bundeskanzler Olaf Scholzvisited India in February 2023 leading a high-level business delegation comprising CEOs of major German companies. The Prime Minister and Chancellor jointly addressed a Business Round table comprising top industry leaders from both sides.
- The visit saw the release of a common paper titled “India, Germany Vision to Enhance Cooperation in Innovation and Technology” by both sides and the signing of a letter of intent between the Department of Science & Technology and Fraunhofer Institute for Solar Energy System for cooperation in green hydrogen.
Conclusion
India and Germany, as the 5th and 4th largest economies in the world respectively, share a robust economic and developmental partnership. The two nations also have a shared interest in upholding democratic values, the rules-based international order, multilateralism as well as the reform of multilateral institutions. Going by current trends, it is expected that Germany will soon emerge as India’s top three trade partner.
Contacts
- Embassy of India in Germany
Address: Tiergartenstraße 17, 10785 Berlin, Germany;
Contact No: +49-30-25795-0
Mr. Parvathaneni Harish (Ambassador)
Ms. Rachita Bhandari (Deputy Chief of Mission)
Mr Neelesh Kumar, Minister (Consular Affairs); Email: mincons.berlin@mea.gov.in - Embassy of Germany in India
Address: No. 6/50G, Shanti Path, Chanakyapuri, New Delhi 110021; Tel. (0091-11) 44199 199
Dr Philipp Ackermann (Ambassador)
Partners
