Issue: Dec 2010


Innovative Indian Companies Drawn to Eastern Germany



by Steve Barclay

The number of Indian investors in Germany continues to rise, with 255 Indian companies active in Germany today. Most recently, Kalyani subsidiary Kenersys inaugurated its wind turbine production plant in the Eastern German state of Mecklenburg-Vorpommern. Generous incentives and low costs have drawn high-tech Indian companies to Eastern Germany in recent years. In order to meet the increasing interest by Indian companies, Germany Trade & Invest is hosting two investor events on December 2 in Chennai and December 4 in Mumbai to showcase the advantages of doing business in Europe's largest market.

Between 2005 and 2008, Indian FDI stocks in Germany nearly quadrupled to EUR 310 million. In terms of greenfield and brownfield investment projects, India is the third most important Asian investor in Germany. Over 40 percent of these projects are in the information and communications technology and software industry. The industries currently flourishing in Eastern Germany - namely renewable energies, microelectronics, machinery and equipment and the automotive industry - match with India's current growth industries.

A highlight of the events will be a keynote address by P. Natarajan, Managing Director of Sanmar Metals Corporation. He will share the success of his iron foundry - Eisenwerk Erla, a specialized automotive supplier - in the Eastern Germany Schwarzenberg. Representatives from the federal state of Thuringia will also discuss opportunities with participants. Michael Pfeiffer, Chief Executive of Germany Trade & Invest, will address business representatives at both events.

Michael Pfeiffer: "Germany is currently experiencing one of its strongest economic growth periods in the past twenty years. Business confidence is at an all-time high. Indian companies are playing a part in this boom and we gladly welcome newcomers. There has not been a better time to invest in Germany, especially in the growth industries of Eastern Germany."

Indian investors in Germany represent a broad range of industries in diverse regions of the country. Companies like the Kalyani Group with its recently inaugurated wind turbine production plant in Mecklenburg Vorpommern are a testament to Eastern Germany's attractiveness to Indian investors.

Eastern Germany stands out as an investment location as it combines the benefits of Eastern and Western Europe. Eastern Germany provides a stable investment environment and carries the weight of Europe's largest economy. At the same time, labor costs remain approximately 30 percent less than in western Germany and generous incentives are available for new and existing businesses. Eastern Germany also offers affordable land and office pricing, often cheaper than in India's cities.

Germany's transportation and communications infrastructure - ranked first worldwide by the World Bank's 2010 Logistics Performance Index - is a boon to Indian companies looking to reach the European market as well as IT companies seeking a strong technological backbone. Investments by Jet Airways (aerospace), Hexaware Technologies (software & IT services), Dabur India (pharmaceuticals), and Ensoft Informatics Private (semiconductor
industry) confirm Germany's appeal.

Germany Trade & Invest is the foreign trade and inward investment promotion agency of the Federal Republic of Germany. The organization advises foreign companies looking to expand their business activities in the German market. It provides information on foreign trade to German companies that seek to enter foreign markets.

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