Thursday, March 28, 2013

“Germany and France are Adamant and Strong Enough to defend The Euro”

In 2010, Indo-German trade volume crossed The €15 billion mark; a rise of 17.1% y-o-y. Both have set a Bilateral Trade target of €20 billion by 2012. In This Exclusive Interview with B&E, Michael Pfeiffer, Chief Executive, German Chamber of Trade & Invest talks at length on The Opportunities ahead.

B&E: What is the core proposition that you have come here with regarding East Germany and India?
Michael Pfeiffer (MP): Eastern Germany has become one of the popular business locations in Europe, and Europe is a fabulous market for Indian products. At least 50 % of Indian investments in Germany are in the fields of IT and high tech. We want to speak to Indian companies if they want to get access to the European market, and East Germany is a good location in that respect. With the new airports, it’s now one hour closer to India than before. Secondly, our infrastructure provides for easy access to both West European as well as fast growing East European markets.

B&E: How do you see Indo-German trade, which got a big momentum post-liberalisation, going forward?
MP: If you look at the last 10 years, you would notice that Indo-German trade has really become stronger. It has grown from €4.5 billion in 2000 to €13 billion in 2009. For this year, we expect Indian exports to Germany amounting to €6 billion, and German exports to India being €9 billion. So, except for 2009, where we had the global recession, there’s been a strong rise in Indo-German bilateral trade. The same is true for Indian investment in Germany.

B&E: Earlier, there used to be more exports from India than imports from Germany. Now, it’s almost equal. Wouldn’t that create an issue?
MP: Both India’s exports and imports from Germany are rising. It is not so important to have a real balance of trade between the two countries. It’s important for trade balance in general, but your imports & exports are quite balanced. If you look at the structure of exports from Germany to India, it’s mostly machinery. Machinery is needed in India to develop its industries and be more competitive. So, both countries have learnt in the past few years about how to cooperate better.

B&E: Since 2007, you began talks on FTA. Also, during the G20 summit, Indian finance officials met their German counterparts and assured that it will be a reality by this year. How do you foresee this?
MP: If it happens, it will mean there’s less problems with taxes, or no taxes at all. And trade will come up considerably. We will have bilateral trade up to €20 billion by next year, if it happens.

B&E: Do you feel that the trade agreement will be a holistic one, covering a comprehensive number of services?
MP: It will be. Parties want a really good deal for their business communities. The difficult thing is: In Germany, we have a structure with a large number of SMEs. For them, bilateral agreements are difficult to administer, that’s why we preferred multilateral agreements. But for a different market like India, which is fast growing as well, it is a good goal to have.

B&E: What are the key areas where the two nations can work in a better way?
MP: If you look at the past, India’s expertise in textiles were number one, followed by chemicals and electronics. But presently, it’s mostly the IT companies that are setting up the business in Europe including Germany. This shows that Indian companies nurture the goal of becoming high tech partners of the world. That’s also the goal of the German companies investing here – to become partners of technology.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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