Germany's economy : A snapshot
Germany is Europe's largest economy and ranks 6th globally by Purchasing Power Parity (PPP), with a PPP-adjusted GDP of approximately US $6.04 trillion in 2024. Its skilled workforce, technological leadership, and proactive planning continue to underpin its strong position in the global economy. Germany has gone through a prolonged period of economic stagnation. After two years of contraction, the economy is set to broadly stagnate in 2025 and rebound with 1.2% GDP growth in 2026 and 2027. After easing to 2.5% in 2024, HICP inflation is projected to decline to 2.3% in 2025, 2.1% in 2026, and 1.9% in 2027. The positive effects of a ramp-up in public spending is partly counterbalanced by the negative impact of trade tensions, which are expected to impact exports.
Like the rest of the world, Germany also suffered economic losses during the pandemic, revival from which was mired by geo-political tensions across the globe. As per recent updates, the country is set to recover slowly in 2024 fuelled by recovery in real household income and improved consumer sentiment. The inflationary pressure is expected to ease from 6% in 2023 to around 2.4% in 2024. Recovery in investment growth is also expected in 2025. Overall real GDP growth is forecast to increase by 0.1% in 2024 from a 0.3% decline in 2023. In 2025, real GDP growth is forecast to recover moderately to 1.0% in 2025.
India and Germany's Bilateral Trade
Germany is the fifth largest destination for India's engineering exports and the largest in European Union. Engineering exports
to Germany was recorded at USD 3.24 billion in 2018-19 and then, after declining in the next two fiscals due to the pandemic,
it continued its rise in the next fiscals. In FY 2024-25, engineering exports to Germany increased by 2.4% while India's overall
merchandised exports to Germany increased by 8%. Major engineering panels exported from Germany to India include
electrical machinery, products of iron and steel, auto components and parts, industrial machinery, medical and scientific
instruments, auto tyres and tubes, IC engines, injecting and moulding machinery etc.
Opportunity in Germany's engineering industry
Germany remains the epicenter of Europe's industrial innovation, and Hannover Messe exemplifies this leadership as the world's
premier trade fair for industrial technology. The country's engineering sector thrives on precision, automation, and advanced
manufacturing, creating a dynamic ecosystem for electrical machinery, industrial equipment, and Industry 4.0 solutions. Despite
Germany being a significant export destination for India, our share in its import portfolio is still marginal compared to leading
suppliers from the EU, USA, and China. This gap underscores a vast untapped potential for Indian exporters to position
themselves as reliable partners in areas such as smart manufacturing, robotics, renewable energy systems, and electric mobility.
Participation in Hannover Messe 2026 offers Indian companies a strategic platform to showcase cutting-edge capabilities, forge
partnerships with global technology leaders, and gain insights into emerging trends shaping the future of engineering.
Strengthening engagement with Germany through such exhibitions will not only boost trade but also accelerate technology
transfer and innovation adoption for Indian industry.
