Why the future belongs to Indo-German business ties

India and Germany have a tradition of trade and business. During the last several years, India has become one of the most important trading partners for Germany. Germany is India’s biggest trading partner in Europe and among the top ten worldwide. Trade relations will only grow in importance in the future. There is also increased interest on both sides for more investment opportunities and closer ties between the companies of both countries.

India: Gross domestic product (GDP) in current prices from 1986 to 2026 (in billion U.S. dollars)

Business ties between Germany and India have not reached their full potential, but the future looks brighter. There are several reasons to be optimistic about this. The German government has initiated programs aimed at fostering closer economic cooperation between German regions and states. The Indian government also promotes close commercial links with Europe to become the region’s new leader.

India’s economy will become more important in the future because of its size. India has a fast-growing population and middle class with an increasing purchasing power. It is expected that India will surpass the United Kingdom, Germany and Japan to become the world’s third-largest economy by 2030.

India has high expectations towards Europe as well. India’s Prime Minister Modi is striving to build strong political ties between European countries and his own country since he sees this region as an ally against China. Europe is seen as a potential source of investment and trade, both as already successful economies and because they share the same values.

Germany’s reputation in India also plays a role in shaping Indo-German business ties. German engineering has always been of high quality, which attracts many Indian companies. While Indian businesses are attracted to Germany due to its “Made in Germany” reputation, German companies do not always see India’s growing market as favorable since it’s difficult to navigate its restrictive environment for business and trade.