German Cos to invest in Indian industries, MSME

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Saurabh Gupta | 22 May, 2015
German industry delegation would visit India in November to promote the 'Make in India' drive in areas of automobiles, renewable energy, bio-tech and other micro, small and medium enterprise (MSME) segments, Minister Counselor, Head of the Economic and Commercial Division, Embassy of the Federal Republic of Germany, India, Dr. Corinna Fricke said in New Delhi on Thursday.

"The bilateral relations between India and Germany had deepened and there was huge scope for cooperation for the two countries," she said at an event organized by industry body FICCI.

In order to impart a thrust to Indo-German collaboration in High-Tech Manufacturing, FICCI jointly with the Embassy of India in Berlin and the support of German Embassy in New Delhi organized a Panel Discussion on 'Unleashing opportunities: Indo-German High-Technology Manufacturing'.

The discussions were held in the wake of a study by the Embassy of India in Berlin in partnership with EY (formerly Ernst & Young) in pursuance of Government of India's efforts to encourage Indo-German collaboration in High-Technology Manufacturing. The study is titled on 'Prospects for Indo-German collaboration in High-Technology Manufacturing'.

The objective of the Study was to identify High-Technology sectors that are most suitable for Indo-German collaboration. The purpose is to develop investor-related sector information resulting in a platform that facilitates trade and investments in these particular sectors. The Study is anchored to the Make in India initiative and other national programmes of Government of India, which have been initiated by Prime Minister Narendra Modi. The following sectors have been determined to be the most appropriate in the Indo-German context: ESDM (Electronic System Design and Manufacturing), photonics, IT, automotive, civil aviation and airports, transportation infrastructure, water, renewable energy, heavy engineering, biotechnology, pharmaceuticals, space and defence manufacturing.

As regulations governing export controls and dual use of items have a bearing on High-technology trade and investments, an impact assessment of these regulations on the identified sectors have been carried out. A case study of an ongoing Indo-German collaboration in the Machine Tools sector has been undertaken.

The Indo-German High-Tech Partnership for manufacturing has the potential to significantly benefit both countries and contribute to the betterment of their societies. Germany and India have complementary potentials that together are suitable for a healthy and sustainable partnership. While Germany has well established High-Technologies, its population is ageing which will not provide a sufficient young skilled workforce and academics in the long run. On the other hand, India has a vast, young and high quality manpower that Germany could benefit from.

Together, both countries have the complementary resources to overcome the challenges of the future. Greater trust and understanding between both the partners can bring about a close cooperation between the two - and wider Europe - in the High-Technology sectors. When accomplished, this could unlock the significant potential for mutual growth. Implementation of the strategic instruments detailed in the roadmap section of this report will hold the key to this success.

Sidharth Birla, Immediate Past President, FICCI & Chairman, Xpro India Limited, stated that India needs to put its house in order. As a strategy, there was a need to improve India's share of hi-tech manufacturing and bring about R&D orientation to take a leap towards achieving a greater level of economic growth.

He added that Germany is a technology leader and complements India's ambition in Hi-tech manufacturing. Hence, it was with this perspective that Indian Embassy in Berlin and EY identified opportunities and challenges in high-technology Indo-German collaboration, especially for dual use technologies where there are export controls.

Speaking on ease of doing business in India, Atul Chaturvedi, Joint Secretary, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India, said that a number of initiatives and processes have been implemented by the government to make the complicated business environment simple and transparent.

He added that after the installation of the present Government, the country recorded its highest ever FDI in India's history.

Responding to issues related to IPR, Vishvajit Sahay, Joint Secretary, Department of Heavy Industries, Ministry of Heavy Industry and Public Enterprises, Government of India, pointed out that with the exception of pharmaceutical sector, IPR does not pose a big challenge in other sectors. He added that German companies have been active in auto sector and similarly there were other sectors where IPR would never be an issue.

Reverse engineering, innovation and IPR are all interlinked issues, said A. Chakraborty, Director, Indo-German Science & Technology Centre. He stated that industry-academia link is very low in India and so is the trust between government and industry. There was a need to bridge this trust deficit and encourage industry and academia of both India and Germany to collaborate.

Narrating the success story of Siemens in India, Mr. Sunil Mathur, Managing Director & CEO, Siemens India, said that a company essentially goes through three phases to become successful. The first is when it brings a new tech product and sells it at a premium. Next when the competition enters the market, the company localizes the product. Finally, when the consumer demands the original product with high quality, the company needs to produce smart products that are designed, developed, sourced and engineered in India and sold in Indian markets.

Som Mittal, Chairman, FICCI Electronics and White Goods Manufacturing Committee, observed that there were already numerous foreign companies in India and focus should be on taking care of them as they would eventually become the spokespersons for India and spread the good word.

Touching on the issue of IP, he said that IP was important and many big German companies were sharing critical information with India under strong contractual agreements and so far no IP infringement case had been reported.