Europe's 'Land of Ideas' eyes India

CROSS-BORDER BUSINESS

By no account is German business interest in India anywhere near dwindling yet.

Fitting into someone else's shoes can be a daunting exercise, and that's pretty much the task cut out for Bernhard Steinruecke, director general, Indo-German Chamber of Commerce (IGCC).

For, under the leadership of his predecessor, Gunter Kruger, IGCC sprung out of its erstwhile shell to stake its claim to being the largest foreign chamber of business in India, and by far the largest German bi-national chamber worldwide.

"In fact, the country conferred the Padma Vibhushan title (posthumous) on Dr Kruger this year. And yes, I do have a task and vision ahead "" after all we are larger than even Ficci in India in terms of direct membership," says Steinruecke, who is now busy pacing out celebratory events to mark 50 years of the Chamber's existence in India this year.

Not only has Steinruecke to pull the legacy forward, but also to counter what it portrays as misperceptions of Indo-German business ties.

A Deutsche Bank Research report tabled late last year, for instance, got attention in India for suggesting a slowdown since the year 2000 in German FDI entering India, with UK and Dutch firms outpacing German firms.

This, despite the good performance of German enterprises in India, having recorded double-digit growth in sales and net income.

The real story, according to Steinruecke, is that statistical figures for FDI inflow do not capture the true picture of German business interest in India.

The Chamber, he asserts, has been directly responsible in helping over 100 firms of direct German extraction set up shop in India last year alone, up sharply over 2004.

This is the more indicative parameter, he claims, because globalisation and the multinational pattern of modern business operations have rendered direct bilateral investment data meaningless.

"FDI that is routed through German MNCs from other countries, through their subsidiaries, often does not get captured in the data. Besides, many German companies that are already here do not need FDI, and are successful enough here to undertake investments on their own," says Steinruecke. And he ought to know.

After all, he was instrumental in setting up Deutsche Bank's operations in India, and is now involved in aiding other companies establish their local ventures. He rattles off examples of how companies such as DHL, Mico Bosch, Lufthansa are all busy deepening their presence in India.

"This also includes Deutsche Bank, which is stepping up its scale of operations here," says Steinruecke.

And to be sure, the Deutsche Bank report itself later mentions that Indo-German relations, which showed some signs of stagnation, started picking up again in 2004.

So there's little evidence that Germany is distancing itself from India as it seeks to position itself firmly as a "land of ideas" in the mind of the global investor.

IGCC itself is rearing to go too. It has already set up 20 additional representative offices in the country and is also setting up India desks in Bangkok, Colombo, Hong Kong, Johannesburg, Kuala Lumpur, Singapore and Sydney.

"We are doing this to facilitate investments from those places in India. Not only German companies, but even other firms there can access information relating to India or Germany from our offices. Today, we cannot restrict presence only to a certain place. We have to take into account the globalisation trend...opportunities can arise out of anywhere," says Steinruecke.

And that's not all. According to the projections put forward by the annual review of the IGCC, the bilateral trade between Indian and Germany is expected to grow for a few simple reasons.

In contrast to rival destinations to its north and east, India offers transparency, a vibrant media and English as the widely spoken language "" and is a transmitter of ideas.

East of West

Exactly 50 years ago, a group of businessmen, led by F K Heller, started IGCC. But the Indo-German relationship dates back to the 16th century "" if not more, when the first German traders set sail from Augsburg and Nuremburg in search of precious stones and spices.

"But traditional folklore is a little more interesting that says that the three wise men that came at the time of Christ's birth were from India," says Steinruecke.

Then there's the Sanskrit connection, with Max Mueller a household name. In business, India's early steel plants owe plenty to German expertise and help.