Indian economy may surpass Germany in 5 years: Karl Haeusgen, President, VDMA
Check out this insightful interview where Karl Haeusgen, President, VDMA, engages in a compelling discussion with Subhajit Roy.
Haeusgen highlights India’s promising trajectory, he said, “Considering India’s current growth rate, I am confident that in five years, India will surpass Germany, while the partnership between the two will persist.”
He also added, “German engineering exports to India witnessed a 27% increase last year, while Indian engineering exports to Germany saw an even more substantial rise of 37%. This evidence underscores the successful history of collaboration within our industry.”
Moreover, Haeusgen sheds light on the promising development of the maritime corridor, set to fortify connectivity and collaboration between India and the European Union in the medium term.
Watch the interview now!
In recent years, there has been a noticeable rise in trade volume between Germany and India. What is your perspective on this trend?
I believe there are several key factors at play. First, the robustness of the Indian economy and its advancements in areas such as infrastructure and professional expertise. Additionally, the shifting geopolitical landscape, particularly with China’s transformation from a potential market to a risky one, has prompted numerous companies to seek out India as a safer alternative, thus contributing to the increased trade volume.
How can these countries enhance their collaboration, and what future possibilities do you foresee?
Both countries boast a well-established engineering industry and a history of collaboration in research and development spanning over a decade. Notably, German engineering exports to India witnessed a 27% increase last year, while Indian engineering exports to Germany saw an even more substantial rise of 37%. This evidence underscores the successful history of collaboration within our industry.
Which other sectors do you foresee as potential areas for collaboration between these two countries?
When considering India’s investment prospects for the next 5 to 10 years, it becomes evident that infrastructure, including roads, railroads, and communication networks, will play a pivotal role. Additionally, the focus on renewable energies, particularly in the context of energy transformation, emphasizes the crucial role of German components and equipment in facilitating India’s progress in this domain.
Regarding the discussion around hydrogen fuel in the energy transition, where do you perceive opportunities for German companies to participate in this transition within India?
Primarily, considering India’s geographical and weather advantages, it’s well-positioned to generate large-scale renewable energy, a capacity that Germany doesn’t possess. This renewable energy serves as a fundamental requirement for producing green hydrogen, which I believe will be crucial for future energy production. Thus, when considering the various stages of the value chain, there are ample opportunities for collaboration between Germany and India in this regard, making it a promising joint venture for the future.
As a part of VDMA, what specific measures do you envision implementing to fortify this relationship?
The VDMA represents a diverse spectrum of 3,600 German companies, ranging from startups to medium-sized family businesses and large conglomerates. Essentially, the VDMA serves as a valuable conduit for partners in India to engage and collaborate with the German mechanical engineering industry, channeling the collective knowledge and interests of these companies.
Looking ahead five years, where do you hope to see the trade relationship between these two countries in terms of volume?
It’s interesting to note that in terms of GDP, Germany and India are closely matched, with Germany currently slightly ahead. However, considering India’s current growth rate, I am confident that in five years, India will surpass Germany, while the partnership between the two will persist.
Considering the ‘Make in India’ campaign and the increasing investment by German companies in Indian manufacturing, how can India establish itself as a prominent sourcing hub or manufacturing destination for companies, particularly those from Germany?
I strongly believe that enhancing the collaboration between India and the EU is a mutual endeavor. To elevate this cooperation, the free trade agreement and the maritime corridor hold significant importance. Regarding the free trade agreement, it is imperative that we collectively advocate for its conclusion no later than 2024. Similarly, the maritime corridor, a commendable medium-term infrastructure project, serves to substantially improve connectivity between India and the EU.
Do you anticipate India becoming a favored partner for German companies, or do you foresee Germany competing with China?
Currently, India is a preferred partner, and it is expected to become an even more robust one in the future.
