Economic scenario of Germany
Germany is the largest economy of Europe and fifth largest 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. Economic reforms during 1998-2005 led to strong economic growth and falling unemployment. Germany was one of the least aﬀected nations during the sovereign debt crisis in Europe and managed it well through slower spending and higher tax revenue to see a budget surplus of 0.7% in 2017. 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. The economy is projected to grow by 4.1% in 2022 as per OECD
Bilateral relations between the India and Germany have been traditionally strong. Germany is one of the most important partners for India in Europe, both bilaterally and in multilateral fora such as the UN. It is a nation witnessing rapid and continuous technological advancement and has achieved a prowess in manufacturing. India therefore considers Germany as an important partner for economic tie who can contribute in the process of Indian economic development. Germany on the other hand also sees India as a regional and an aspiring global power, and a large market which provides an alternative to China. Germany recognizes the importance of India as a democracy with shared interest in multilateralism and in maintaining a rules-based international order.
Trade in Engineering
Germany is one of India's largest trading partner in Europe. It has consistently been among India's top ten global partners and was the fifth largest trading partner in 2021-22. Merchandise trade between India and Germany was recorded at USD 24.8 billion in 2021-22.
India's engineering exports to Germany for 2021-22 was US$ 3.9 billion. India's exports of Industrial Machinery to Germany for 2021-22 stood at US$ 889.6 million, registering a growth of 39% over 2020-21.
Opportunity for Indian Engineering Industry
Germany is a nation witnessing rapid and continuous technological advancement and has achieved a prowess in manufacturing. As our largest trading partner in Europe and 7th largest source of FDI, Germany oﬀers substantial opportunity for Indian businesses, especially in manufacturing. Engineering sector therefore has ample scope to tap the large market of Germany especially at a time when both India and Germany have been moving towards restoration of economic activities to the pre-COVID level or even better, leading to higher domestic demand and expansion of markets for diﬀerent products. Moreover, India's share in global engineering import of Germany is slightly over 0.50%. This necessarily reﬂects that trade is far below the potential level and ample scope is left for Indian exporters to explore the market of Germany.