Business Opportunities for German Companies in India
Currently, India is one of the most popular places in the world to start an overseas business. Rapid infrastructural development, industry-friendly policies, and ease of doing business are benefits attracting foreign companies to this nation. Moreover, India’s developing industrial sector and expanding consumer market have opened up several opportunities for overseas investments.
This is good news, especially for nations like Germany, which has been one of India’s top ten global business partners over the last several years. Additionally, due to the presence of Indian entry consulting firms, the ease of entering and expanding in this market has never been easier.
Ideal Industrial Sectors in India for German Organisations
These are some of the best industrial sectors in India for German firms to make investments:
- Sustainable Energy
When investing in India, the sustainable energy sector can be a top choice for German companies. Given the rising domestic energy demands and ongoing global climate crisis, the government has planned to increase its capacity to generate power from renewable resources.
By 2030, it plans to meet almost 50% of the country’s energy needs from sustainable sources. Thus, German businesses can get several business opportunities in this sunrise sector.
- Digital Infrastructure
Undoubtedly, digitization and IT sector development have moved in tandem over the last few years. The government as well as large corporations are digitizing their operations and are becoming increasingly dependent on AI, data analytics, etc.
Moreover, with the official launch of the 5G network in India, the scope for development in the digital infrastructure sector is expected to improve manifold. German corporations can leverage this opportunity to invest in Indian sectors and achieve significant growth in the long run.
- Chemical Products
Globally, India has a rapidly developing market for all types of chemical products. In it, almost 22% is occupied by specialty chemical sales. These products play a vital role in improving manufacturing procedures and also serve as crucial ingredients for finished goods.
Additionally, according to reports, in the next 4 years, the market for specialty chemicals is set to expand at 12.4% CAGR, reaching USD 64 billion. This presents a big opportunity for German organizations to tap into a billion-dollar market.
- Healthcare
After the pandemic, India’s healthcare, pharmaceutical, and medical equipment sector has developed at an exponential pace. Apart from this, rising income and improved health awareness among people have made this sector improve at a CAGR of 22%.
Experts suggest that by 2025, this industry segment can reach USD 638 billion. This will create a scope for investment by both domestic and foreign organizations. Hence, businesses in Germany can also consider the healthcare sector for making investments.
How German Firms Can Benefit from the Indian Market?
Here are some of the benefits that German firms can get by investing in India:
- Indo-German Fast Track Mechanism
As the name suggests, it is an agreement to speed up German investments in India. It facilitates the expedition of resolutions in case German firms face issues while doing business in this country. Since its launch in 2015, this mechanism has solved more than 87% of lodged cases. It was initially signed between the German Ministry of Economic Affairs and Energy and the Indian Government. The executing agency in this regard is Invest India.
- German India Start-up Exchange Program
Starting in February 2018, the main objective of the German India Start-up Exchange Program was to help German entrepreneurs kick-start their businesses in this country. It is a non-profit platform that facilitates investments in start-ups across several industrial sectors. In the long run, this scheme aims to scale the start-up cooperation that exists between the two nations.
- Make in India Mittelstand
This is a unique and dedicated ‘Make in India’ initiative for German ‘Mittelstand’ companies – stable business enterprises in Germany that have shown sustainability during times of economic turbulence. The goal is to offer support services to such companies and German family-owned businesses if they wish to enter the Indian market.
It was launched in 2015 as a non-profit investment facilitation program. This scheme is headed by the Indian Embassy in Berlin and has made investments of more than USD 1,693 million. Target industries in this regard are advanced technologies, industrial, healthcare, infrastructure, consumer goods, mobility, etc.
How Partnering with a Consulting Firm Can Benefit German Companies?
Despite all the advantages, German organizations can face some significant hurdles while establishing their business in this country. This is because the Indian consumer market consists of a varied consumer base, with customers hailing from different economic and demographic backgrounds. Thus, to occupy a fair share of the market, they have to develop products that are in line with the Indian consumer’s preferences.
Moreover, there is a high demand for commercial real estate in India. When it comes to shifting base to India, foreign companies need to choose a strategic location that would be suitable for accommodating their workforce and ensuring a stable supply of resources. Now, for a German organization to do all this on its own can be a hectic task. It will require employing additional manpower and resources which can lead to unnecessary delays in their entry and expansion plans. In this regard, taking help from an India entry consulting firm can be a smart solution.
There are several companies like Tecnova that can provide effective product development strategies along with finding suitable manufacturing plant locations. Moreover, they have professionals who can facilitate successful entry and expansion for a wide variety of businesses.
Reference
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