German keen to invest in hi-tech manufacturing in India

German companies are favourably inclined to invest in Indian high-technology market, according to a study - titled on ‘Prospects for Indo-German collaboration in high-technology manufacturing’ - by the Embassy of India in Berlin in partnership with EY (formerly Ernst & Young). Germany is a technology leader and complements India’s ambition in hi-tech manufacturing, said Sidharth Birla, immediate past president, FICCI & chairman, Xpro India Limited while commenting on the study. As a strategy, there was a need to improve India’s share of hi-tech manufacturing and bring about R&D orientation to take a leap towards achieving a greater level of economic growth, he added.
 
The objective of the study was to identify high-technology sectors that are most suitable for Indo-German collaboration. The purpose is to develop investor-related sector information resulting in a platform that facilitates trade and investments in these particular sectors. The study is anchored to the Make in India initiative and other national programmes of Government of India, which have been initiated by Prime Minister Narendra Modi. The following sectors have been determined to be the most appropriate in the Indo-German context: ESDM (Electronic System Design and Manufacturing), photonics, IT, automotive, civil aviation and airports, transportation infrastructure, water, renewable energy, heavy engineering, biotechnology, pharmaceuticals, space and defence manufacturing.
 
“The Indo-German high-tech partnership for manufacturing has the potential to significantly benefit both countries and contribute to the betterment of their societies. Germany and India have complementary potentials that together are suitable for a healthy and sustainable partnership. While Germany has well established high-technologies, its population is ageing which will not provide a sufficient young skilled workforce and academics in the long run. On the other hand, India has a vast, young and high quality manpower that Germany could benefit from. Together, both countries have the complementary resources to overcome the challenges of the future,” said the study.
 
In fact, a German industry delegation is expected to visit India in November 2015 to promote the ‘Make in India’ drive in areas of automobiles, renewable energy, bio-tech and other MSME segments. Dr Corinna Fricke, minister counsellor, head of the economic and commercial division, German Embassy, India, said the bilateral relations between India and Germany had deepened and there was huge scope for cooperation for the two countries.
 
“With the exception of pharmaceutical sector, IPR does not pose a big challenge in other sectors. German companies have been active in auto sector and similarly there were other sectors where IPR would never be an issue,” said Vishvajit Sahay, joint secretary, department of heavy industries, ministry of heavy industry and public enterprises, Government of India, during a panel discussion on ‘Indo-German collaboration in high-tech manufacturing: Opportunities and challenges’ on May 21, 2015 in New Delhi.
 
According to A Chakraborty, director, Indo-German Science & Technology Centre, reverse engineering, innovation and IPR are all interlinked issues. “Industry-academia link is very low in India and so is the trust between government and industry. There was a need to bridge this trust deficit and encourage industry and academia of both India and Germany to collaborate,” he added.
 
Som Mittal, Chairman, FICCI’s electronics and white goods manufacturing committee, observed, “IP was important and many big German companies were sharing critical information with India under strong contractual agreements and so far no IP infringement case had been reported.”
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Key findings of the study:

• The key findings of the report are: German companies are favourably inclined to invest in the Indian high-tech market;
• India is assumed to be the highest performing country among the BRIC markets; there is high market readiness in India for high-tech products;
• Indo-German collaboration in high-tech manufacturing can become an important part of the ‘Make in India’ initiative;
• A set of challenges are impacting German companies’ investment decisions;
• Seven high-tech sectors offer greatest convergence for Indo-German collaboration;
• India has strong IT and space sector capabilities that German companies could benefit from; Recent Government of India initiatives in FDI, ease of doing business and infrastructure can significantly impact the business environment in High-Tech sectors; and
• Indo-German collaboration in high-tech manufacturing has the potential to favourably impact both economies

 
The way forward
The roadmap suggested by the report has been prepared with the following objectives:

• To forge a transformative collaboration between the two countries in manufacturing technologies that goes beyond buyer-seller cooperation, to promote joint and wholly owned ventures through strong industry linkages, R&D collaborations and skill development across a wide range of high-tech sectors
• To facilitate entry of German companies and their technologies to India across the high-tech sectors. To that effect, to identify steps that can help create a favourable environment for high-tech trade and collaborations
• To initiate Indo-German high-tech partnership at the political level with the involvement of industry and other stakeholders
• To create the appropriate political, administrative and economic instruments for successful high-tech trade and collaborations