"Both countries should work to give further concrete shape to the agenda for Indo-German partnership for the 21st Century, which we drew up last year……We need to exploit more fully the unrealized potential in our commercial and economic ties. The knowledge base economy is an important area of focus for our bilateral partnership.."

A B Vajpayee at a joint Press conference in New Delhi on October 29, 2001
"India and Germany have very very friendly ties, friendly relationship and there has been already a longstanding tradition for these two. Now, this is a very very solid basis for cooperation….Regarding bilateral ties between our two countries not only we will maintain the present degree of healthy relations but we will massively expand the existing ties and we will create what we would like to describe as a win-win scenario."

Gerhard Schroeder at  a joint Press conference in New Delhi on October 29, 2001

OVERVIEW

India today ranks 8th among 10 most important countries having trade with Germany. Germany today is the 4th largest trade partner of India. The Indo-German trade in 2002 stood at € 4.94 billion and in first nine months of 2003, it stood at at € 3.75 bn, signifying a marginal 0.81% over previous year's comparable figure of € 3.72 bn. Germany's recognition of India as one of the most important sources of IT expertise is reflected in the fact that 2852 Indian IT experts have been issued Green Cards.  

After a long declining spell of  five years (1996-2001) since the Indo-German bilateral trade attained a peak in fiscal 1995-96, Germany's exports to India have started showing signs of recovery. According to Centre for Monitoring Indian Economy (CMIE), India's total commodity imports (in terms of US$) during the period 1994-95 to 2001-02 increased at a compounded annual growth rate (CAGR) of 8.66 percent, whereas India's imports from Germany actually declined by 6.96 percent during the same period. This is revealed in a  study carried out by Indo-German Chamber of Commerce on the basis of foreign trade data compiled by the CMIE. During calendar 2002 India's imports from Germany was up 5.21 percent. In fiscal 2001-02 fiscal when total volume of India's imports from Germany was up 16.21% vis-a-vis previous fiscal to US$ 2,035.30 mio. India's imports from Germany peaked at US$ 36,729.98 mio. In 1994-95 Germany was the second largest source of Indian imports during 1994-95. From there the ranking has come down to seventh, despite the recovery during the period. Germany's share in India's total imports has dropped from a peak of 8.57 percent in 1995-96 to a low of 3.50 per cent in 2000-01 and recovered slightly to 3.97 percent in 2001-02.

Germany has made a strong recovery in its trade with India during fiscal 2002-03. Exports to India during this period was up 18.56 percent at US$ 2.40 bn compared with US$ 2.02 bn in fiscal 2001-02. On the other hand, India exports to Germany registered 17.80 percent growth in fiscal 2002-03 to stand at US$ 2.10 bn compared with US$ 1.78 bn in the previous fiscal. 

  •  India's exports to Germany was up 0.87 percent to stand at € 2.52 bn in 2002. 

  • 75% of India's total exports to Germany comes from 15 top items including traditional items such as textiles, leather goods, garments, engineering goods, chemicals and pharmaceuticals.

  • Germany's exports to India was up 4.92 percent at € 2.42 bn in 2002.

  • After a marginal increase of € 0.34 bn in the previous year, India's favourable balance of trade with Germany narrowed down 47.44 percent at € 1.01 bn in 2002 against

  • To boost trade between the countries, Double Tax Avoidance Agreement is in operation since 1997.

  • The German FDI in India nosedived to Rs 2531.44 mn from Rs 15738.91 million in 1997. In 2002 Germany ranked 12th in terms of FDI approvals by the Indian federal government.

  • Approved German investment stood at Rs 2.53 bn in 2002, USA being the largest investor with Rs 20.51 bn followed by Mauritius's Rs 18.46 bn; UK's Rs 18.0 bn; Japan's Rs 7.40 bn; France's Rs 6.22 bn; Netherlands' Rs 5.52 bn.

  • Among the European countries, UK is the second largest foreign investor in India in 2002.

  • Between 1999-2001, total German investment approved by the Indian federal government stood at Rs 21.4 bn.

  • Germany is the second largest partner for Indian industry with about 14 percent of the total number of new foreign collaborations sanctioned by the Indian federal government in 2001.

  • At the end of 2001, 1570 Indo-German collaborations are in operations.

  • A total of 156 new Indo-German collaborations agreements have been cleared by the Indian federal government.

  • Industrial machinery and engineering; electrical equipment; chemicals and pharmaceuticals, automobiles and transportation dominate the newly Indo-German collaborations.

  • Number of Indo-German joint ventures currently stands at 575.

  • Currently, 1600 Indo-German agreements are in operation.

  • Indo-German Chamber of Commerce's latest study identifies Motor Industries Co. Ltd and Bayer (India) Ltd as the top two companies among 25 having German collaboration in India.

Indo-German Balance of Trade
(In € billion)

  1997 1998 1999 2000 2001 2002 2003 (Jan.-Sept)
Indian Exports 2.118 2.165 2.118 2.425 2.500 2.522 1.96
Indian Imports 2.274 1.960 1.843 2.083 2.307 2.420 1.79
Total Trade 4.392 4.125 3.961 4.508 4.807 4.942 3.75
Balance of Trade -0.156 +0.205 +0.275 +0.342 +0.193 +0.342 +0.174
 

Indo-German Balance of Trade
(In US$ million)

  1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03
EXPORT 1921.10 1851.94 1738.39 1907.57 1788.36 2106.68
Growth (%) -3.60 -6.13 9.73 -6.25 17.80
India's total Export 34784.99 33218.72 36822.49 44560.29 43826.91 52719.43
Growth (%) -4.50 10.85 21.01 -1.65 20.29
Share(%) 5.52 5.57 4.72 4.28 4.08 4.00
IMPORT 2528.30 2140.68 1840.99 1759.59 2028.11 2404.53
Growth(%) -15.33 -14.00 -4.42 15.26 18.56
India's Total Import 41484.49 42338.71 49738.06 50536.46 51413.50 61412.13
Growth(%) 2.18 17.34 1.61 1.74 19.45
Share(%) 6.09 5.05 3.70 3.48 3.94 3.92
TOTAL TRADE 4449.40 3992.63 3579.39 3667.15 3816.47 4511.21
Growth(%) -10.35 -10.35 2.45 4.07 18.20
India's Total Trade 76269.48 86560.55 86560.55 95096.75 95240.41 114131.56
Growth(%) 14.49 14.49 9.86 0.15 19.84
Share(%) 5.83 4.14 4.14 3.86 4.01 3.95
TRADE BALANCE 607.20 288.74 102.6 147.98 239.51 -197.85
India's Trade Balance -6699.51 -12915.57 -12915.57 -5976.16 -7586.59 -8692.70
Source: Federal ministry of Commerce, India


Indo-German Balance of Trade
(In Rs  million)
  1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03
EXPORT 713971.25 77912.38 75329.20 87146.01 85290.05 101953.44
Growth(%)   9.13 3.32 15.69 -2.13 19.54
India's Total Export 1292777.00 1397531.6 1595617.70 2035710.20 2090179.80 2551372.80
Growth (%)   8.10 14.17 27.58 2.68 22.06
Share(%) 5.52 5.57 4.72 4.28 4.08 4.00
IMPORT 93963.75 90059.82 79775.20 80385.73 96723.83 116367.72
Growth(%)   4.15 -11.42 0.77 20.32 20.31
India's Total Import 1541762.80 1783318.60 2155284.40 2308727.60 2451997.20 2972058.60
Growth(%)   15.67 20.86 7.12 6.21 21.21
Share(%) 6.09 5.05 3.70 3.48 3.94 3.92
TOTAL TRADE 165360.88 167972.20 155104.41 167531.74 182013.88 218321.16
Growth(%)   1.58 -7.66 8.01 8.64 19.95
India's Total Trade 2834539.80 3180850.20 3750902.10 4344437.80 4542177.00 5523431.40
Growth(%)   12.22 17.92 15.82 4.55 21.60
Share(%) 5.83 5.28 4.14 3.86 4.01 3.95
TRADE BALANCE 22566.63 12147.44 4446.00 6760.28 11433.77 14414.28
India's Trade Balance -248985.80 -385787.00 -559666.70 -273017.40 -361817.40 -420685.80
Source: Federal Ministry of Commerce, India

Updated on March 20, 2004

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