Key Takeaways
- Despite the challenging circumstances over the last few years including the pandemic and the recent geopolitical developments, German FDI increased tremendously to India. However, there is great untapped potential to step up investments further.
- India is positioned well to attract further investments with factors such as the size of the market, the demographic advantage, a stable and supportive policy environment with schemes such as Production Linked Incentive Scheme (PLI) ensuring political and financial support to German companies.
- There is great potential for both sides to work together to combat climate change, especially in the areas of renewable energy, green hydrogen and Electrical Vehicles.
- Potential sectors of collaboration include infrastructure (both digital and physical), defence and aerospace, healthcare, drugs and pharmaceuticals, insurance, R&D, skill development and services, including banking and finance.
- Effective implementation of policy, greater engagement with relevant stakeholders and building investor confidence in Ease of Doing Business is key for attracting greater FDI.
- Innovating according to market needs and localisation is critical, with greater focus on R&D to enhance investments.
- Trade negotiations such as those between India and EU and early conclusion of trade agreements that address issues of tariff and non-tariff barriers have further scope to intensify the Germany-India partnership.
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