Indian economy in the focus of German politics. India expert Mike D. Batra and German managers from India talk to Handelsblatt about their assessment of the growth market. 

The fourth intergovernmental consultations between India and Germany took place in Berlin this week. The Prime Minister of India Narendra Modi and the German Chancellor Angela Merkel want to intensify the trade and investment relations on both sides. They agreed that strategies such as the "Make in India" initiative already offer German companies good investment opportunities in India. Merkel and Modi, however, underlined their determination to further facilitate trade and investment between the two countries.

This week, politicians and the media virtually celebrated India as a strategic partner of Germany, which could take over the role of the USA in the future, in the interest of the German economy and politics.

The harsh reality away from big words on the political stage

While this week India once again moved into the media and political limelight for a moment and for once made positive headlines, the Handelsblatt analysed the status quo of German industry in India and reported on the "troubles of the plains" in doing business in India.

In the Handelsblatt article German economy in India: Disappointment in a boom country of May 28, 2017, India correspondent Mathias Peer lets entrepreneurs who have invested in India have their say. The Bochum-based pump and valve manufacturer Klaus Union and the automotive supplier Marquardt report on the excessive bureaucracy involved in setting up a company and problems with the purchase of land, respectively. Liebherr, like many other companies, is struggling massively with the fact that very few customers in India are prepared to pay for the high quality of its products.

Peer also reports on how, despite the efforts of Modi's government, international corporations like Telenor and General Motors are pulling out of India again and why Vodafone and Volkswagen are having to write off billions in India.

Mike Batra in Handelsblatt on wish and reality

Reality in India

Handelsblatt on the reality of the Indian economy

In the Handelsblatt article, Mike D. Batra, co-founder and managing director of Dr. Wamser + Batra GmbH, gets to the heart of the problem facing the Indian economy: "Companies often lack realistic expectations. Looking at India's growth figures, the risks are often completely ignored."

This once again makes it clear that even if the political willingness and even the framework conditions for close cooperation between Germany (or Europe) and India are there, the challenges of the Indian market do not simply disappear. There is even a danger that companies will enter a market naively and unprepared, which they cannot assess, and end up burning a lot of money there.

"Modi's visit certainly brings India back into focus for many companies"says Mike Batra in an interview with Handelsblatt. "It is to be hoped that in doing so. not lose sight of the challenges in the country."

A realistic assessment of the Indian market is provided by the WB Business Climate Index:

to the study: WB Business Climate Index India

German economy in India: Disappointment in a boom country Handelsblatt article from May 28, 2017, Mathias Peer

Joint Declaration on the 4th Indo-German Intergovernmental Consultations of 30 May 2017