Originally published June 23rd 2017
Indian companies became one of the most important foreign investors around the world in the past years. The strong European brands and advanced technology attract Indian investors to Europe.
Within the European Union Germany is the biggest trading partner of India and the third most favoured investment destination globally after the US and the UK. Indian investors prefer Germany due to its numerous advantages. Germany has one of the biggest sales markets in Europe. It is strategically located in the heart of Europe and it is well connected by road and air to all European countries. Due to its favourable geographic location and to the removal of trade obstacles it is an excellent hub for business expansion for Indian investors. Political stability, legal transparency, efficient administration system, technological know-how and the high-quality products offer attractive investment opportunities.
Due to the above described attractive opportunities many Indian enterprises entered to the European market by using Germany as a 'Gateway to Europe'.
Indian companies have invested over USD 7 billion in Germany. Currently there are more than 200 Indian companies operating in Germany.
Numerous Indian investments took place in the most diverse industrial sectors in the past years and experts expect a wave of new acquisitions and involvements. Indian companies have invested especially in the IT, automotive, pharma and biotech sectors.
The acquisition of Temmler Pharma by Lupin Pharmaceuticals, the takovers of Scholz Edelstahl GmbH and Rege Holding by Amtek India were some of the notable investment projects by Indian firms in Germany.
Data Services Provider companies Infosys Technologies, Wipro and Tata Consultancy Services (TCS) have announced that they are searching for suitable acquisition candidates.
Mahindra, one of the largest vehicle manufacturer in India and the largest tractor manufacturer in the world, is planning to enter to the German automotive industry as well. With the German technological and engineering know-how they could enhance their cars and expand their business on the world market.
Tata Group, the Indian multinational conglomerate company is currently in extensive negotiations with the daughter company of the German Telekom, T-Systems. With the acquisition of T-System, Tata could further develop and expand the IT services of its daughter company, TSC (Tata Consultancy Services).
Due to the low exchange rate of the Euro and their strong financial power, Indian companies and entrepreneurs are preparing for further company acquisitions in Western countries. The Indian enterprises have a filled war chest and a low financial leverage compared to the companies in the West. The Indian managers are well trained, work at a low cost and they have a start-up mentality, all these make the Indian companies winner in the European market.
India and Germany have agreed to establish exchange programs for Indian and German start-up companies. Berlin is already a start-up hub, being a home of around 2000 start-up companies. Synergies between the two countries would be beneficial for both sides. Both countries have a lot to exchange in terms of ideas, skills, research, talent or funding in the start-up industry.
There is a huge investment potential in the area of transport and mobility as well. Germany is expert in transport infrastructure, where India needs more expertise.
Finding the right partner to invest into a foreign country it is not an easy decision. It requires thorough considerations and detailed analysis. Intercultural differences can create a number of barriers between foreign investors and the local businesses.
Shanda Consult is specialised in consultancy regarding project-based investments and as a partner in bringing together investors and investment projects. We have an active investment consultancy practise in Germany, thus we can assist Indian investors in identifying the right target, to conduct proper due diligence, and to overcome language and cultural barriers.
For a personalised consultation for your business investment needs in Germany please feel to contact us.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
