East Germany offers good prospects for Indian firms

NEW DELHI: Indian companies looking for significant European presence have a reason to smile, with the low profile East Germany region offering more organic growth avenues in diverse sectors ranging from renewable energy to microelectronics. At present, about 20 Indian entities including the likes of Mukesh Ambani-led Reliance Industries, wind turbine maker Suzlon Energy, Tata Group firm Voltas and automotive supplier Bharat Forge have business activities in East Germany. However, the exact investment details are not available. "There are a lot of opportunities in East Germany especially for companies from India. The administration offer various incentives for business activities such as fast approval procedures and possible government support," Andreas Dressler, Director Advisory (Global Location and Expansion Services), KPMG Germany told PTI. KPMG is a global advisory firm. Dressler noted that Indian firms in East Germany have created about 2,000 jobs. "More than acquisitions, the firms have a lot of avenues for organic growth in East Germany and are spread across different sectors. Automotive, renewable energy, pharmaceutical, mechanical engineering and microelectronics are among the major fields," he said. According to data compiled by KPMG, Reliance Industries, Voltas, Suzlon and Bharat Forge have hundreds of employees in the region. RIL has more than 700 employees in East Germany. It operates through Trevira GmbH and manufactures polyester fibre. Voltas, which is into manufacturing of high-performance circular knitting machines through Terrot GmbH, employs over 130 people. Suzlon Energy has made investments for design and development of wind turbine generators and roughly account for over 100 jobs. The Indian firm operates through Suzlon Energy GmBH (Rostock), Suzlon Energy GmBH (Berlin) and Suzlon Windkraft GmbH. Another major Indian employer in the region is Bharat Forge that is present through CDP Bharat Forge GmbH and employs about 130 people, the data showed. In addition to incentives from the administration, the region has low labour costs, flexible working hours and good infrastructure. Presently, there are about 240 Indian-owned companies in Germany. A recent KPMG report titled 'Eastern Germany as a Location for Indian Direct Investment', said that foreign investors are provided with many support programmes including research and development funding in the region. Large companies can receive grants up to 30 per cent of their total investment, while medium-sized can get up to 40 per cent and small companies up to 50 per cent. These are cash grants that are paid as initial expenses and therefore have a significant impact in early phases of the investment project, the report noted. It had also said that East Germany is Europe's leading location for microelectronics, primarily due to strong research activities carried out in universities there.

Source: Economic Times