India may overtake Japan in investments in Bavaria

India is likely to overtake Japan in investing in Bavaria, Germany's largest state and a key location for high-tech industry.

"All these years, the US and Japan dominated foreign investments into Bavaria. But in the last four years, the scene has changed with the Indian companies aggressively looking at Europe and investing heavily in setting up base there," said Thies Claussen, head foreign trade and location marketing, Bavarian Ministry of Economic Affairs.

"With such high levels of investments, India is likely to overtake Japan this year. Indian companies have been consistently investing in Bavaria and in the last four years, some 38 companies have set up base there for their European operations," he added.

Bavaria, popularly known as the 'Silicon Valley of Europe' has a population of 12 million and its GDP for 2005 was 400 billion euros. It is this status which is attracting Indian companies to it, he added.

In 2006, 10 Indian companies set up office in Bavaria as compared to five in 2005. On the other hand, investments from Japan have remained at 10 every year.

Prominent Indian companies to have invested in Bavaria in 2006 were Quest, MindTree, Tech Mahindra and Sobha Renaissance. Other Indian companies like HCL, Reliance, Satyam, Tatas, Wipro have been doing business in Bavaria for the last four-five years.

Trade between Bavaria and India is presently pegged at 1.1 billion Euros and has been growing rapidly with imports from India rising at 32.4 per cent and exports 44.8 per cent in 2005.

Bavarian companies have also got an equal interest in India. "Presently, over 200 small and medium companies have direct or indirect presence through joint ventures and collaborations," said Claussen.

About 18 Bavarian companies, mainly in the IT and machine tool sectors, are positive on investing in India and are exploring the possibilities of either joint ventures or technical collaborations.

A Bavarian delegation, mainly comprising government officials, is in India on a 10-day tour.

The delegation is led by Karl Huber, president of the Bavarian constitutional court and Ingeborg Berggreen-Merkel, Bavarian ministry of education and religious affairs.

In Bangalore, the delegation is holding interactions with judges of the Karnataka High Court, Karnataka Industries Department and is visiting key German and Indian IT companies like SAP and Wipro. In 2004, a similar trip was organised to China to understand its growth.