Bilateral Trade between India and Germany

Germany is the third largest destination for India's engineering exports and the largest in European Union. Engineering exports to Germany reached its all-time high at USD 3.86 billion in 2021-22 and then again to USD 3.94% in 2022-23 registering a substantial 48% growth in 2021-22 and 2.1% growth in 2022-23 over the previous fiscals. During the ongoing fiscal 2023-24, engineering exports to Germany continued to be optimistic with USD 2.43 billion of exports during Apr-Oct 2023-24 as against USD 2.22 billion during the same period last fiscal, registering 9.6% growth. It is quite impressive as well as encouraging that when engineering exports to EU has declined in 2022-23 and 2023-24, engineering exports to Germany has been rising continuously. India's major engineering exports to Germany include Electric Machinery and Equipment, Iron and steel and its articles, Auto Components/Parts and Industrial Machinery among others.

Economic Scenario of Germany

Germany is not only one of the leading and highly developed social market economies of the world, it leads the multilateral efforts to promote a stable global economy and encourage the use of renewable resources and environmental friendly production. It is the largest economy of Europe and fifth largest of the world in the world in terms of Purchasing Power parity (PPP). Its highly skilled labour force, continuous advancement in technology and well thought out development planning has made it one of the leading developed economies of the world.

Real GDP growth however slowed down to 0.5% in 2019 and then contracted by 4.9% in 2020 due to the Pandemic effect but domestic consumption, investment, and exports have driven German GDP growth to 2.7% in 2021 but then dropped by 1.8% due to slowdown in Europe as a whole. However, uncertainty is high amidst strong energy price volatility of late. High inflation is reducing real incomes and savings thereby dampening private consumption. Export growth may recover through 2023 due to easing of supply chain bottlenecks and a record-high order back log. The economy is projected to contract by 0.5% in 2023 and recover by 0.9% in 2024 as per IMF.

Focus Product

Automobile is the focus sector and automobile and auto components are the focus products of this event. India's exports of automobiles to Germany recorded nearly 2.5% CAGR between 2018-19 and 2022-23 to reach USD 402 million in 2022-23. Auto components and parts comprises around 90% of India's total automobile exports to Germany. Moreover, the current fiscal saw comprehensive surge in exports of automobiles to Germany till the month of Oct 2023 on a year-on-year basis. Exports of total automobiles jumped by 44.25% to reach USD 320.6 million during Apr-Oct 2023-24 from USD 222.3 million during the same period last fiscal, which is really encouraging for the EEPC India member exporters participating in this event.

Opportunity for Indian businesses in Automobile Market of Germany

Germany as a leading industry rich nation and automobile industry is considered the heart of the country's economy. Of all the industrial sectors, it is by far the strongest in terms of turnover, research, and exports, generating prosperity, growth, and employment in numerous other sectors as well. Germany is one of the forerunners in automobile manufacturing and German cars are trusted across the world for updated technology, high quality engineering and brand value. Most of the large scale global auto players like Mercedes-Benz, BMW, Volkswagen AG, Stellantis (Opel) etc. are from Germany. The automobile industry in Germany generated over 506 billion euros in total sales in 2022, as per reports. It is also one of the largest exporters of automobile in the world and therefore, needs supply of auto parts as important inputs. Here lies the opportunity for Indian exporters as a supplier of auto parts to leading German brands and such events are real good platforms for expanding businesses by Indian auto component makers.