German business lauds India's budget, ready to invest in country
German companies are ready to invest in India at the first signs of growth recovery, while Finance Minister Arun Jaitley's maiden budget shows the NDA government is taking the right direction, German business leaders said here Friday.
"It is encouraging that the new government sees itself as a facilitator for business. That is precisely our thinking," Ulrich Grillo, president, Federation of German Industries (BDI) told reporters here after meeting Jaitley along with other German corporate leaders.
Describing their meeting with Jaitley within 24 hours of his presenting the budget as a signal of "Germany's confidence in India", Grillo said: "India is very important for Germany. There are 1,500 German companies working in India."
Germany is India's biggest trading partner in Europe and ranks among the top 10 countries by origin of foreign direct investment (FDI) into India.
What has impressed the German industry heads is that the governement intends to facilitate private business and foreign investment.
"Enlarging FDI in sectors like insurance, defence and real estate as the government has done is a good thing for Indian business. This will also help German conmpanies to take part in India's growth process," said Jurgen Fitschen, co-CEO Deutsche Bank and president, Association of German Banks, adding that Germany's strong insurance sector sees a lot of opportunity in India.
The union budget for 2014-15 has raised the FDI cap in defence and insurance upto 49 percent, with majority contral of ventures being retained in Indian hands.
"The transfer of technology, where Germany is a leader, can be a problem if there is no control over the business. For German companies that have ownership it is easier to transfer technology to its subsidiary in the foreign country," Fitschen said.
The German delegation also conveyed some of their concerns to the finance minister.
"We talked of some of the obstacles in business like the protection of our investments related to jurisdiction issues and transparency in the procurement process whereby German companies are treated equally, on par, with competing companies", said Hubert Lienhard, chairman of the Asia Pacific Committee of German Business.
"This top economic delegation has come to explore the new situation in India, especially after the last two years when investments were on hold. Its first-hand impression is that fundamental issues are being addressed, said German Ambassador to India Michael Steiner.
(Posted on 11-07-2014)