APA Discussion Paper on "India: Forever a Future Market?"

30/06/2022

The Asia-Pacific Committee of German Business (APA) discussion paper talks about India being a future market for Germany with history, facts, and statistics.

The intro excerpt and downloadable link are below.

About APA
The leading voice supporting the German economy in the Asia-Pacific region.
https://www.asien-pazifik-ausschuss.de/en

The balance of power in our world is changing, and the Asia-Pacific region will play a leading role in this new world order, geopolitically and geoeconomically. The APA wants to – and will – shape this change together with its partners in the region and is committed to the convergence of the economies of Asia and Europe. We want to improve market access and expand trade and investment – also for Asian companies in Europe. The APA is building bridges between German companies doing business in Asia and politics in Germany as well as in our Asian partner countries.

The APA is a joint initiative and umbrella organization of leading business federations – the Federation of German Industries (BDI), the Association of German Chambers of Commerce and Industry (DIHK), the German Asia-Pacific Business Association (OAV), the Federation of German Wholesale, Foreign Trade and Services (BGA) and the Association of German Banks (Bankenverband). The APA pools the economic concerns of German businesses active in the Asia-Pacific region and is an agenda-setter for crucial economic issues regarding the future of our cooperation with the Asia-Pacific region. The APA supports high-level economic talks during visits of Asian government representatives to Germany and during visits of the German Federal Government to Asia. One of the main events is the bi-annual Asia-Pacific Conference of German Business, co-organized with the German Chambers of Commerce Abroad and the Federal Ministry for Economic Affairs and Climate Action.

 

Intro excerpt from the discussion paper (June 2022):

At the EU-India Summit in May 2021, the President of the European Commission, Ursula von der Leyen, declared that “the European Union stands by India as friends and partners”, stressing “that the European Union and India are the world's largest democracies”. Then and now, challenges like growing geopolitical tensions, Russia’s war of aggression against Ukraine, global warming and the Covid pandemic as well as strained supply chains have increased the urgency for Europe and India alike to assert their strategic autonomy by diversifying partnerships. Europe’s interest continues to grow in gaining a reliable ally in India that, in addition to geostrategic goals, also shares and defends common values such as multilateralism and respect for international law, democracy and human rights. New Delhi's position on these issues in international affairs is being closely observed more than ever.

Germany and India can build on a long, stable and amicable relationship, particularly since the 1990s when India instituted large scale economic reforms and took steps to liberalize its economy. Germany is India’s biggest trading partner in the EU, and its sixth largest trading partner worldwide. A cornerstone of the bilateral exchange are vast networks of personal friendships, built through encounters based on openness to each other’s worldviews.

In the past, Europe and Germany failed to put enough time and effort into their relationships with Indo- and Asia-Pacific countries and despite longstanding high-level engagement between the EU and Germany with India, the respective relations remain well below their potential. Yet, changes are on the horizon. While Prime Minister Modi has shown a renewed interest in Europe, exemplified by the EU-India Summit in May 2021, the recent Indo-German intergovernmental consultations, and the restart of the trade and investment negotiations, the EU has also realized that it needs to diversify its relations.

The 2020 policy “Guidelines for the Indo-Pacific” of the German Government have rightfully been read as a call for the expansion of interests in the region. When Portugal made the relationship with India a cornerstone of its Council Presidency in 2021, culminating in the EU-India Summit in May last year and in the announcement of renewed negotiations for investment protection and free trade agreements, it became clear that India’s potential as an ally and a market had inspired European foreign policy makers once more. This was also reflected in the “EU strategy for cooperation in the Indo-Pacific”, which mentions India as a partner in the fields of regulatory cooperation, human rights, trade and investment, green transition, digitalization, data protection, connectivity, security, and healthcare.

While some hailed this development as the overdue realization that India needs to be taken more seriously, others pointed to protectionist and democratic setbacks in India that could limit the country’s openness for stronger partnership and its growth potential.

To get closer to a mutually rewarding relationship it is time for an honest appraisal of the current barriers to economic engagement and to provide suggestions for framework conditions to improve the potential for closer cooperation in a challenging geopolitical context. This paper presents a contemporary perspective based on interviews with practitioners and stakeholders from various fields and sectors, including business, politics and think tanks. The analysis combines desk research, semi-structured interviews, and input from various sectors of German business.