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Construction : Interaction | December 2015 | Source : Equipment India

Indo-German trade volume grew 13.5 per cent during first half of 2015

Rajesh Nath, Managing Director, VDMA India.

German companies in India are looking forward to the implementation of GST in 2016 which would help in the ease of doing business here, says Rajesh Nath, Managing Director, VDMA India.

What is the total annual import of German equipment to India? Similarly what is the total annual export to Germany?
We only get what the German Federal Statistics Bureau is providing. If machines are sold to a transit country before being sold to the ultimate destination, the only available information in official statistics is on the transit country. It is difficult to estimate the volume of equipment shipped to India via intermediaries.

The trade volume between India and Germany during the first half of 2015 grew a healthy 13.5 per cent over the same period last year to reach a volume of nearly €8.8 billion. The significant increase in bi-lateral trade was mainly on account of the Indian imports from Germany which appreciated 18 per cent (€4.9 billion) during first half of this year, after registering a negative growth of 13.7 per cent during January-June 2014.

India imported machinery worth nearly €1,598 million during the first half of 2015 (first half 2014: €1,282 million), which accounted for 32.6 per cent of the total imports from Germany during this period. Among the machinery sectors, major demand of German equipment was for power transmission (10.2 per cent), compressors and air vacuum technology (7.6 per cent), textile machinery (6.9 per cent), material handling (5.9 per cent), machine tools (5.8 per cent), printing and paper technology (4.9 per cent), valves (4.7 per cent) and air handling (4.5 per cent). There are other sectors like food processing and packaging, plastics and rubber, process, construction and building material machinery which are growing steadily in India. Out of the total exports of construction equipment to India, China and South Korea account for 28 per cent and 19 per cent, respectively, followed by Germany (10 per cent) in the third position.

On the other hand, Indian exports which had more or less remained at the same level during January-June 2014, posted a growth of 8.3 per cent during the same period this year. Indian exports to Germany during January-June 2015 amounted to nearly €3.9 billion.

Is the above governed by any regulatory mechanisms, which may be mutual or unilateral? What are the essentials of such mechanisms?
German Chancellor Angela Merkel, during her recent visit to India, held talks with Prime Minister Narendra Modi on stepping up bilateral cooperation. India and Germany have signed an agreement to set up a separate body to fast-track investments by German companies in the country and weed out the obstacles faced by them in conducting business. The agreement, signed between the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, and Ministry of Economic Affairs and Energy (Germany), will set up a separate body which will be functional by March 2016. The body will fast-track investments by German companies into India by regularly screening problems faced by them.

At a separate venue, a framework MoU was signed between the Department of Heavy Industries (DHI), Government of India, and Fraunhofer, Germany with the latter as Technology Resource Partner. The objective of the agreement is to support and augment the Make in India programme through increasing the innovation and technology prowess of the Indian industry. The activities include creating a road map for technological development for Indian industry, identifying and plugging technology gaps.

German companies have a unique expertise which India must tap into and the opportunity for growth has just begun. The government would like German companies to partner with them and extended an invitation to German companies to come and set up manufacturing facilities in India. We would welcome the most awaited Free Trade Agreement (FTA) to boost Indo-German collaborations and greater business between Indian customers and VDMA members. The EU and India hope to increase their trade in both goods and services and investment through the FTA negotiations launched in 2007.

Following the EU-India Summit in February 2012, negotiations entered an intense phase. Important issues include market access for goods, the overall ambition of the services package and achieving a meaningful chapter on government procurement. Even during the visit of Narendra Modi to Germany at the Hannaover Messe in April 2015, both he and the German Chancellor spoke in favour of restarting the discussion on FTA.

Further, the German companies in India are looking forward to the implementation of Goods and Service Tax (GST) in 2016 which would help in the ease of doing business here.

What is the role of German Engineering Federation in this business?
The VDMA India office in India serves the Indo-German economic relations in the different engineering sectors and promotes the activities of VDMA member companies in India. To establish the successful business in India, the characteristics of the market must be considered. To support its member companies, VDMA India office offers the comprehensive assistance for both newcomers in the orientation phase as well as for established members in further development.

We also participate in and service bilateral programme such as those in existence, with governmental participation between Germany and India. Like earlier this year, VDMA organised a German delegation visit of mining machinery manufacturers to India. The delegation consisted of 16 officials from 10 major German mining machinery manufactures. The delegation visited two major mining companies in India - Coal India (CIL) and Singareni Collieries Company (SCCL) and visited open cast as well as underground mines of SCCL in Ramagundam and of Eastern Coalfields (ECL) in Jhanjra and Sonepur Bajari area.

Officials from the Mining and Energy department of the Government of the state of NRW in Germany also joined the delegation. A meeting with the Director General of Mines Safety (DGMS) was conducted in Dhanbad. The delegation also met some senior government officials of Telengana and some private mine operators in Hyderabad.

What are your plans to motivate, incentivise and attract more exhibitors and visitors to bauma Conexpo India in the future?
bauma 2016 is the world´s leading trade fair for construction equipment, building material and mining machinery and construction vehicles, which will be held from 11 to 17 April 2016 in Munich, Germany. With around 3,421 exhibitors from more than 57 countries, bauma, organised by Messe Muenchen GmbH, is the heartbeat of our industry. Some 535,065 visitors from more than 200 countries and over 125,850 visitors from the mining sector come to Munich to see the most important new developments from around the world.

We already successfully held two press conferences with Messe Muenchen India for bauma 2016 in Delhi and Mumbai this year. On 4 December 2015, VDMA India is organising for the mining fraternity in the eastern region a roadshow for the world´s largest trade fair for construction equipment, building material machinery and mining equipment in Kolkata.

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