Target Achieved Three Years Ahead

Indo-German Trade Crosses
Euro 10-billion Mark in '06

Bilateral trade between India and Germany crossed the historic as well as the psychological land-mark of €10-billion in 2006. This milestone of an achievement gained further significance as it was reached three years ahead of the anticipated date and also exceeded the estimated volume with a large margin.

Indian imports from Germany grew 51.8 percent
Keeping to its reputation of the world's export champion, Germany's exports to India saw above-average growth (51.8 percent) during 2006. Indian exports to Germany too grew 22.5 percent reinforcing the fact that India has the capability to produce world-class goods.
As in the past years, the German machinery sector is well represented and well-established in the Indian market. German exports of machines grew at an enviable pace of 67.5 percent to reach a figure of almost € 2.5 billion. In great demand were particularly textile machinery (€ 426 mil.), machine tools (€ 238 mil.), printing machinery (€ 188 mil.) and construction and mining equipment (€ 153 mil.). With regard to the value of exports, electro-technical products assumed the second position in Germany's export palette to India. Worth mentioning here are the exports of equipment for power generation, which with € 400 mil., accounted for the lion's share of exports of electro-technical products. An above-average growth was registered by Indian imports of aircraft, which grew over 300 percent to touch a value of just under € 634 mil.
In comparison, the growth of metal products seems a little modest with just 14 percent however, this segment takes up the 4th position in Germany's export list to India with a value of around € 581 mil. Particularly in demand are sheets of iron and steel (€ 131 mil.). Indian imports of chemicals (28.9%, € 553 mil.), measurement & control equipment (+33.2 percent, € 270 mil) and plastics (3.1 percent, € 197 mil.) are further strong segments with respect to German exports to India.
Not surprising is the impressive growth of German exports in the automobile sector to India. In the year 2006, the German automobile manufacturers exported 65 percent more goods with a value in the region of € 192 mil. This underlines on one hand the competitiveness of the German automobile industry and on the other, the clearly growing demand for cars in India. Exports of chassis and motors in other words CKD (Completely Knocked Down) units, accounted for a share of € 115 mil., while the exports of cars with a value of around € 65 mil., contributed to a significant share to the exports of the German automobile industry.
Indian imports of pharmaceutical products (+12 percent), medical technology (+24 percent) and optical products (26 percent) to Germany have also grown and goes to show that India has become an important market for medical products. The standard of living has risen in India and the affording middle class in India is not only interested in consumer goods but to a great extent also in health products. The rising consumerism in India is reflected in the 60 percent growth of imports of the so-called consumer goods such as furniture, watches, sports goods and so on. Though this is yet at a modest level of about € 15 mil., it is a trend that cannot be ignored and will play an important role in the development of Indo-German trade in the future.

Indian Imports from Germany
Indian exports to Germany up 22.5 percent
Traditionally, textiles play a significant role in Indian exports to Germany. Here, cotton knitted garments (€ 371 mil.) and cotton garments (€ 282 mil.) were particularly in demand in Germany. With that, Indian exports to Germany in the textile and garment category grew 22 percent to a total of € 1.17 bil. With around € 402 mil., and registering a growth of 38 percent, metal products assume the second position. Exported metal products of significance were bars or sections of iron and steel (€ 49.3 mil.). Sheets of iron or steel accounted for around € 40 mil., copper and copper alloys (€ 38.2 mil.), tools and cutting tools (€ 38.7 mil.) and zinc and zinc alloys (€ 29.5 mil.). Exports of chemicals were at a modest level with € 204 mil., mineral oil products (€ 85 mil.), dyes and paints (€ 83 mil.) and rubber products (€ 61 mil.)
As in the case of textiles, India is also traditionally strong in the leather and shoes sector and is profiting from the restrictions imposed by the EU on imports of shoes from Vietnam and China. Indian exports in this category therefore grew 8.8% to reach a figure of around € 375 mil. in the year 2006.
Further, a healthy growth was also registered by Indian exports of electro-technology to Germany, which grew about 22% to € 287 mil. Within this segment, particularly in demand in Germany were electronic components (€ 106 mil.) and equipment for power generation (€ 79.5 mil.)
Even Indian exports of machinery (+24 percent), pharmaceutical products (+33 percent) and automobile & components (+21 percent) grew significantly. Worth highlighting here are the exports of bearings, gears and drives with around € 58 mil., Armaturen (€ 31 mil.) and pumps & compressors (€ 27 mil). In the pharmaceutical sector, primary products were mainly exported to Germany, which with a value of € 159 mil. accounted for two-thirds of Indian exports of these products to Germany. Also with regard to the automotive sector, components such as chassis, motors and automotive parts were exported (121 mil.). A segment not to be underestimated is that of cars and caravans, exports of which was in the region of 40 mil.
Also export growths in the aerospace sector (+89 percent), medical technology (+64 percent) and measurement & control equipment (+114 percent) are of significance and prove that the German market appreciates Indian products and quality.

Indian exports to Germany
The major economic institutes in Germany forecast a stronger economic growth in the region of 2.0 percent for Germany this year, while India is 'poised' for 9.0 percent growth this year. Against the backdrop of good economic growth in both countries, one can say that the growth in Indo-German trade will continue unabated.
€ 10 billion mark trade & target
During his visit to India in 2004, former German Chancellor, Gerhard Schröder and Prime Minister Dr. Manmohan Singh spoke about aiming to increase bi-lateral trade from € 5 billion to €10 billion by the year 2009. This target, however, has already been reached 3 years in advance!
With Indian imports from Germany soaring 52 percent to reach a figure close to € 6.4 billion and Indian exports also increasing a healthy 22.5 percent (nearly € 4.2 bil.), the volume of trade between the two countries during January to December 2006 amounted to € 10.5 bil., setting a new record. With Indian industry continuing to perform well, imports from Germany are expected to continue to rise even in the near future, thus keeping to the present growth trend.
German Foreign Trade sets 3 new records!
As far as setting new records goes, Germany will not be left behind. On the contrary, the country has set three new records in its foreign trade during the year 2006. Exports from Germany grew to a record figure of € 893.6 billion (a growth of 14 percent over the previous year), while imports registered a stronger growth. German companies and traders imported goods worth an unprecedented € 731.7 billion. Not surprising that the trade surplus too was a record figure of € 161.9 billion. This has provided a new boost to the German economy, whereby foreign trade is the catalyst for the positive economic growth seen in Germany today. As in the last years, the largest chunk of German exports went to the EU member states (€ 556 billion or 62 percent). Exports from the EU nations, on the other hand, accounted for 63 percent of total imports into Germany.