More than 1,800 German companies are present in India today. And most of them have been here for many years now. This is mainly because they have understood that the opportunities India can offer them are huge, despite all the challenges, stated Jürgen Morhard, Consul General of Germany in Mumbai.
He was speaking at the ‘Financing India’ webinar series at the session which focused on Germany. This series was organised by The Free Press Journal and NMIMS in association with Invest India. Other panellists at the session were (in alphabetical order) Avinash Bagdi, Head of Finance, Covestro (India); Rajesh Nath, Managing Director, VDMA India; and Rahul Oza, Partner and Director, Rödl & Partner India. The session was moderated by R N Bhaskar, Consulting Editor, Free Press Journal.
Explaining the importance of Indo-German relationship, Morhard said, “India is a very important partner and opportunity, despite many problems that we face in India. Anywhere you go, especially on foreign turf, nowhere it is easy (to establish business)."
He also added that over the years many existing German companies in India have continued to invest in the country despite the economic downturn (pre-COVID-19). “German companies have a long-term commitment to India. They are convinced that India will rebound. German companies are not here for short-term quarterly results. They are here for marathons and not for sprints,” Morhard added.
Adding to it, Avinash Bagdi said, “In the last 20-25 years, Covestro has been investing every four-five years to step up expansion to cater to the demand locally.” This is the case with many other German companies as well which are in India.
Commenting on protectionism, Avinash Bagdi said, “In the last few years, we have seen protectionism or economic nationalism picking up. This is definitely having an impact on the overall global supply chain.” He believes that this has worked in favour of India with more multinationals companies looking at India to expand.
FDI coming from Germany to India, for the last 19-20 years, has been approximately around 10.5 billion euros. Rajesh Nath, Managing Director, VDMA India said, “2018 was a very good year —there was an investment of 931 million euros coming from Germany to India. In 2019, there was a dip in investment in India. It can be due to the slowdown in the economy.” And as most people believe, the automobile sector continues to be the one that attracted the largest FDI.
Talking about law, Rahul Oza, Partner and Director, Rödl & Partner India said, “The government is trying to build an economy where its citizens follow the rules. It is a very important factor when it comes to inviting investment.” He added, “We are used to living in a country where we differentiate between applied law and applicable law. We need all applicable laws to be applied.” He stressed this was hurting the economy but eventually following the law will help Indian economy to flourish.