Germans Want Labour Policy Streamlined

On the first day of the two-day conference yesterday, the delegates said the labour policy in India needed to be streamlined. They cited the system of sovereign investment guarantees in Germany which, they said, took care of the inherent political risks to investment and trade.

Responding to the concerns expressed by the German delegates, Tata Sons director F Mehta said the labour policy in the country had shifted its focus from an exit policy to that of retraining the workforce.

Industry minister Murasoli Maran expressed the hope that the labour policy will not be a major hurdle in the way of German investments in the country as the European economic powerhouse too had rigidities in its labour market.

 

I think firing a German worker is far more difficult that firing an American worker, he said.

Maran and finance minister P Chidambaram exhorted the visiting German industrialists to step up direct investment in India.

Addressing a 400-strong team from Germany, which is here to attend the two-day meet being held at the Taj Palace hotel under the aegis of the Indo-German Chamber of Commerce, Chidambaram said Germany had for long been Indias principal trading partner in Europe. He quoted statistics to point out that of the total foreign direct investment proposals cleared by the Foreign Investment Promotion Board in the last five years, just less than 10 per cent were from Germany.

Reassuring the delegates that the government was committed to lowering of tariff rates to Asian levels by the year 2000 and to world levels shortly thereafter, the finance minister said there were ample opportunities for German small and medium enterprises to collaborate with Indian firms, especially in software and services.

Maran, while addressing a luncheon hosted by the Confederation of Indian Industry, pointed out that the share of German investment in India had dropped sharply from 38 per cent in 1989 to 4 per cent in 1994. He said the German industry must consider investing more in India.

The minister quoted a study of the German Asia Pacific Committee which, while assessing the investment prospects in emerging economies, ranked India higher than China in terms of operating environment and commercial prospects.

German federal minister of economics Guenter Rexrodt stressed the need to encourage exchange of human resources and flow of students to Germany to be trained in their corporate system for better economic cooperation.

The mood of the delegates seemed upbeat and the enthusiasm to look for business opportunities in India was palpable. However, many delegates expressed reservations on the slow-working system in the country and the gradualist approach needed to do business here.

Most German SMEs do not have enough capability to invest the funds and time required to form a working partnership in the country, said a delegate.

The New Delhi Conference is focusing on the role and potential of the German medium-scale industry in the Asia Pacific region and on promotion of Indo-German economic relations.

Around 100 German delegates are participating in the 40th anniversary celebrations of the Indo-German Chamber of Commerce on November 3 at Mumbai.

Rexrodt is the chief guest at the function.