India Germany Trade

India Germany Trade Agreement

Last updated: Mar, 2023

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 jewelry, 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

The bilateral trade between the countries between 2021-22 was valued at US$ 24.8 billion. The trade increased by 19% in the first 11 months of 2021 over 2020.
Germany is the 9th largest investor in India, with cumulative FDI inflows of US$ 13.8 billion from April 2000 to September 2022.
Germany is India’s largest trading partner in Europe and has consistently been among India’s top (10-12) global partners. During the financial year 2022-23 (up to August 2022) it stood at the 12th position.
In FY 2022-23 (up to September 2022), German FDI in India was US$ 222 million.
As per the Confederation of Indian Industry (CII), there are more than 213 Indian companies 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 5,815 commodities to Germany in FY21.
India’s export to Germany stood at US$ 9.88 billion in FY 2021-22.
Major exported items from India to Germany include nuclear reactors, boilers, machinery, and mechanical appliances; parts thereof (US$ 1,419.36 million); followed by electrical machinery & equipment & parts thereof; sound & tv recorders & reproducers & parts thereof (US$ 776.92 million) in FY21.
India exported 5,221 commodities to Germany during April-October 2022.
India’s export to Germany stood at US$ 6.7 billion during April-November 2022.
Major exported items from India to Germany include electric machinery and equipment (US$ 422 million) followed by rmg cotton including accessories (US$ 364 million) etc. during April-November 2022.

Major imported items by India from Germany with amount & quantity

India imported 5,882 commodities from Germany in FY21.
Imports from Germany to India stood at US$ 14.9 billion in 2021-22.
India's imports from Germany include nuclear reactors, boilers, machinery, and mechanical appliances; parts thereof (US$ 4,007.08 million); followed by aircraft, spacecraft, and parts thereof (US$ 1,778.95 million) in FY21.
India imported 5,475 commodities from Germany during April-October 2022.
Imports from Germany to India stood at US$ 10.19 billion during April-November 2022.
India's imports from Germany include industrial machinery for dairy (US$ 1,245 million) followed by aircraft, spacecraft, and parts (US$ 988 million), etc. during April-November 2022.

Recent Trends & developments

6th Inter-Governmental Consultations: Prime Minister, Mr. Narendra Modi visited Berlin on 2nd May 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 1 July.
In May 2022, India and Germany agreed to a nearly 10 billion Euro 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).

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$ 13.8 billion in India between April 2000 and September 2022. The German government provides funds of around €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.

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)