As part of its Make-in-India policy, India is participating in the world’s largest industrial fair in Hannover beginning April 13th with both Indian Prime Minister Narendra Modi and German Chancellor Angela Merkel inaugurating the event.
In an interview to Dev Chatterjee, Bernhard Steinruecke, Director General of Indo-German Chamber of Commerce and former Deutsche Bank India CEO gives an overview of what German companies are expecting from India.
Germany has been one of India's top trading partners. What are the trends seen in the trade and business between the two countries?
Germany is India’s largest trading partner in Europe and overall we are the sixth largest. It is also a key partner for India on many regional and global issues. For the last 10 years, the trade between India and Germany is rising and its only in the last two years, it was showing signs of a decline.
But the trade had picked up once again and final figures of 2014 and 2013 will be almost same. Since India became Hannover fair’s trade partner in 2006, the trade has gone up by 20%. India’s participation as partner country at Hannover Messe promises to take the bilateral economic relationship to another level.
Many German companies like Siemens are investors in India for decades. What changes would they like to see in the government policies?
The ease of doing business in India still needs more work. India need not to be in the place in the world trade where it is now. India needs to give quicker approvals, it has to be less bureaucratic, and there should be fewer regulations as rules are still vague. Of course, corruption needs to go down as well as it deters investors. The prime minister of India has always talked about less government and more governance and red carpet instead of red tape and these needs to be translated on the ground. India has all the opportunity.
Do you think Indian tax laws are suitable to attract investments from Germany?
India is already taking a lot of steps to make its tax laws clearer and easier. The retrospective taxation rule not only hit multinationals but it hurt local companies also. The government has to rectify this problem. India is at a cusp of major economic growth, as per IMF predictions. A clear cut taxation regime helps all. The plan to cut corporate tax to 25% announced in the budget is a good example of a clear taxation regime.
When compared to China, where do you think India scores and where it is weak in terms of attracting investments?
From where Germany companies stand, it is not India versus China but it is India and China. China started its reforms 15 years before India so it has the advantage. But India has demographics on its side and we expect Indian economic growth rate will soon overtake China’s. German companies would like to be part of this journey.
Both Indian government and Germany plan to promote Make-In-India in Hannover Messe this year... Can you give a brief overview of the Hannover Messe and why is this event important to attract investments into India?
Hannover Messe is the largest industrial fair in the world and provides a perfect platform to the Indian government’s Make-In-India platform. There will be visitors, exhibitors from over 100 countries and this year’s event is important as both the Indian prime minister and German chancellor will be inaugurating the event – thus showing the importance of India in the world trade.
A key component of the fair will be the Indo German Business Summit to be inaugurated by both Heads of State. Much of Germany’s economic success is credited to its focus on the manufacturing sector and on producing high technology sophisticated goods and there is great interest in Germany in this campaign.