New Delhi-Berlin Working On Co-production Of Submarine: German Envoy To India

The Indian government is now faster with approval requests, and German defence manufacturers are eager to partner with India. We can expect more initiatives in the coming months, according to German Ambassador to India Philipp Ackermann.

More progress on the defence deal is anticipated during German Chancellor Olaf Scholz's visit to India in the latter half of October. Ambassador Ackermann mentioned that key topics on the agenda will include ease of doing business, migration, geopolitics and climate change, in addition to defence discussions.

Additionally, the 18th Asia-Pacific Conference of German Business 2024 (APK 2024) is set to take place in New Delhi from October 24 to 26.

In 2023, German company ThyssenKrupp Marine Systems (TKMS) signed an agreement with Mazagon Dock Shipbuilders (MDL) to construct conventional, air-independent propulsion submarines. TKMS will handle the engineering and design, and provide consultancy support, while MDL will be responsible for building and delivering the submarines in India, incorporating significant local content.

Ambassador Ackermann also highlighted that the German government is fully supporting negotiations with the Indian Navy for Project 75 India, which involves building six new conventional submarines with MDL.

Beyond defence, Stefan Halusa, Director General of the Indo-German Chamber of Commerce, expressed optimism about India's economic growth, noting that German companies have never been more hopeful about their business prospects in India.

Officials also discussed the German India Business Outlook survey by KPMG, which revealed that over 80 per cent of German companies expect revenue growth in India over the next five years and nearly 74 per cent anticipate higher profits.

Specifically, 78 per cent of companies foresee rising sales and 55 per cent predict increased profits. Looking ahead, 82 per cent expect turnover to increase and 74 per cent expect higher earnings over the next five years. By 2029, 37 per cent of respondents expect sales growth of more than 20 per cent and 25 per cent anticipate profit growth of more than 20 per cent.

Halusa said that around 2,000 German companies are currently operating in India, primarily in sectors like automobiles, automotive supplies, engineered solutions, electric chemicals and pharmaceuticals. He mentioned that the complexity of licenses and varying regulations across states pose challenges, especially for companies with multiple locations in India.

Bilateral trade between India and Germany reached a record high of 33 billion dollars in 2023, and German companies' direct and indirect investments in India hit a record 25.6 billion dollars in 2022. According to the German India Business Outlook survey, many companies plan to expand their investments in India due to low labour costs, political stability, and a skilled workforce. This year, 59 per cent of companies surveyed plan to increase their investments, a 23 per cent increase from 2021.

The recent editorial of AHK, the business magazine of the Indo-German Chamber of Commerce, emphasised industrial innovation and workforce development as key areas for collaboration. It noted that India's expanding industrial sector will need a large pool of skilled workers, while Germany faces a shortage of skilled labour and educational gaps among its youth.

Sangeet Kumar Sanu

BW Reporters Sangeet Kumar Sanu as a Correspondent reports on Defence, Space and Foreign Affairs for BW since 2022.