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In Hannover, Modi paints India as attractive investment destination

The Economic Times:  April 15, 2015

Hannover: If the response to an event that showcased the cultural diversity of Indian states at the world's biggest industrial fair here were a benchmark, then Prime Minister Narendra Modi's visit to Germany can be declared a huge success.

CEOs of giant German engineering companies and Chancellor Angela Merkel loved it and the claps and cheers resounded for long. But, apart from that, there is a long road to traverse even as Modi made a fervent pitch for India. "We want to accelerate economic growth and provide jobs to our youth," he told German businessmen.

Modi said his contingent had 14 states, 120 CEOs and 320 companies from India participating in the fair, Hanover Messe, underscoring the significance India is giving to business with Germany.

Touting "Make in India" as a new national movement that covers society and business, he said the country is an attractive destination and that his government will make it easy to reach and a place where there will be no negative surprises. "There will be no surprise element," he told the audience that had Merkel, Siemens AG chief J Kaiser, Daimler's CEO Dieter Zetsche and Volkswagen's Martin Winterkorn among others.

"We've moved with speed, created confidence at home and abroad and will protect your intellectual property rights," the PM told his audience. The country's tax system would be more "predicatable", he said and also talked about "new financial instruments" to fund India's growth.

"Every CEO who has tried to turnaround knows how challenging and difficult it is get people come on the same side," he said in an attempt to highlight how he has changed business sentiment overnight.

"The will to change is there and it is moving with speed and in the right direction," he said. But the Germans were looking for something more from the Indian government: a free trade agreement with the European Union that will benefit German companies to do trade in India, a suggestion that many in the government and in business in India unwilling to agree, with talk of reworking existing FTAs.

Modi's last line, as he opened the industrial fair along with Merkel, was imploring businessmen from both sides, "When the shutter comes down at the fair, I hope many new doors would have opened".

Why Germany is big for India

  • Germany is the 8th largest foreign investor in India. Its foreign direct investments in India during January November 2014 was valued at $995 million. More than 1600 German collaborations with Indian entities and around 600 Indo-German joint ventures are currently in operation.
  • Trade between the two countries was valued around 16 billion euros. Germany is India's largest trading partner in the EU and one of the top ten global trading partners.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.