India and Germany create an array of opportunities for one another, which remain uncharted

1. Could you elaborate on the scope of activities of the VDMA? The German Engineering Federation (VDMA) is the largest industry branch association not only in Germany but in the whole of Europe. This association with a workforce of 400 employees worldwide, consists of 3,100 member companies active in 39 engineering sector. VDMA India acts as a link between the German and Indian industry. Salient features of activities of the VDMA India office are:

  • Promotion of sales of Machinery Manufacturers within VDMA, especially exports, including participation in exhibitions.
  • Organizing symposia and similar presentations of German companies in India.
  • Participating in and servicing bilateral program such as those in existence, with governmental participation between Germany and India.
  • Furnishing of information about the complete product program of the German industry to assist Indian companies to identify right partners for mutual business relationship.

2. How does the VDMA success in the year 2011-12 translate into figure and share some latest facts & figure of Indo-German bilateral trade?
Indo-German Trade
In 2011, the trade between India and Germany reached Euro 18.4 billion (Rs.119600 crores). In 2011 Germany exported approx Euro 10.76 billion (Rs 70,000 crores) of goods to India. Out of this the machinery export was approx Euro 3.69 billion (Rs 23,790 crores).The exports from India to Germany attained a value of Euro 7.5 billion (Rs 48,750 crores) in 2011. This was an increase of 21%. Increased demand for German machinery in 2011
In 2011 the total import of machinery from Germany reached a volume of Euro 3.69 billion (Rs 23790 crores). This was an increase by 18 % compared with the same period of time in the previous year. In 2011 among the machinery sectors, major demand of German equipment was for Power Transmission (10.5%), Material Handling (7.6%), Textile Machinery (7.5%), Machine Tools (7.2%) and Construction Equipment & Building Material Machinery (5.4%).There are other sectors like Plastics, Printing, Paper, Food processing and Packaging which are growing steadily in India.

In 2010 out of approximately Euro 12.2 Billion (Rs.79072.5 crores) of machinery imported by India, Germany had a share of around 16.2 %, marginally behind China (20.2%) and ahead of Japan (11.4%) and USA (9.2%).

3. Could you elaborate about the VDMA's Power Transmission Engineering, Construction Equipment, Building Material Machinery, Fluid Power & Robotics & Automation sectors?
Power Transmission
Drive technology - at full speed. As a cyclical supply industry in 2010, it went straight up, with a total order of 70%+. In the period January to July 2011, orders received increased by another 20%. In 2011, a production growth of around 14% was achieved which translated to production volume of around € 15.3 billion. The areas of drive technology which have good economic prospects, show an expected growth of at least 5% for 2012. The average annual growth 1998-2008 (Up to the crisis year) was 7 %, between 1991 and 2011 (20 years) at 5 %. Global mega questions like Energy efficiency and the electrical mobility can be the key technology to drive the industry and act as drivers of innovation.

Construction & Building material
Turnover for Germany's construction equipment and building material machinery industry rose by 17% in 2011 to Euro 12.6 billion. Of this Euro 7.8 billion was accounted for by the construction machinery sector and Euro 4.8 billion by the building materials, glass+ ceramics machinery sector. Germany's construction machinery market is in good shape and contributed significantly to the good sectoral result. For instance, manufacturers of earthmoving machinery sold more than 30,000 units for the first time since 2007. This means the market doubled in just two years. Sales of a good 11,000 wheel-loaders meant it was possible to reach levels last achieved in 1995. Overall, in 2011 the German construction equipment and building material machinery industry sold goods domestically worth Euro 3.3 billion – with Euro 2.45 billion of this accounted for by construction machinery. This is 19% more than last year.

Fluid Power
For 2011, the industry attained an increase of total sales by 22% in Hydraulics & 14% in Pneumatics to attain a volume of Euro 6.8 Billion. In 2012 the total sales are expected to increase by 7% for Fluid Power.

In Fluid Power sector among the total Global exports Germany was the market leader with 27% share followed by Japan (14%) & USA (13%).

Robotics + Automation
The VDMA Robotics + Automation Association has 220 members, producing machine vision, assembly and handling technology, as well as robotics. With their production know-how they make manufacturers competitive – everywhere in the world. This and the on-going worldwide trend towards automation might be the reason for the outstanding turnover increase by 37% in 2011. For 2012, the manufacturers of robotics and automation expect further growth around 7%. This will lead to a new turnover record in the amount of Euro 11.1 billion in 2012, adding a new chapter to the success story of German robotics and automation.
4. Can you explain in more detail what the promotional programme with the Hannover Milano Fairs India Pvt Ltd for upcoming India Hannover, 2012 exhibition?
Since the German Engineering Federation (VDMA), is the technical supporter of the Hannover Milano Fairs India Pvt Ltd for MDA India/CeMAT India 2012, we are organising roadshow/presentations for the event in India. This will help to create awareness for the shows. Further we have done extensive mailing through our Quarterly Newsletter-German Machinery Industry to promote this event.

Similar to the MDA Forum during the Hannover Industrial Fair in Germany, since the last event, VDMA has organised the MDA Forum India at the trade show here. This year also we are organising the MDA Forum India on 22nd and 23rd November 2012. This gives value addition to the exhibitors and visitors as industry experts from prominent companies would be making presentations here.

5. You are an “Old India hand” and have donned many hats to promote indo-German business. Can you elaborate on this?
As VDMA, we provide service to our members by means of market information, market access and creating an optimal platform for our enterprises where even competitors sit together, exchange ideas and work together. VDMA, offers the members a global network through the overseas office like the offices in India, China, Russia, Japan and European office in Brussels. In India VDMA is well established with head office in Kolkata and regional offices in Delhi & Mumbai. These offices act as “bridge-head” between the German and the Indian engineering Industry.

Further as an industrial association, VDMA is instrumental in German participation at various engineering trade shows. This gives the opportunity for business interaction and paves the path for successful cooperation.

Through our Newsletter- German Machinery Industry, we inform the Indian industry about the development in various industrial sectors in Germany. This helps in closer interaction among the companies and fosters Indo-German trade in the engineering sector.

6. There are lot of protests faced by government on the Foreign Direct Investment (FDI) the impact of FDI on India's manufacturing sector. What is your opinion on the FDI? Are you optimistic about the outcome?
In the post liberalisation age, India has attracted FDI in a variety of sectors. The large market in India coupled with the availability of skilled labour force at economical rate makes manufacturing here an attractive option. Due to our demography, India has an aspiring young population. To create reasonable employment for this aspiring population, India needs to grow at 8% to 10% on an annual basis. This can be largely achieved if we are able to increase the FDI which will generate new jobs and employment opportunity. Hence we are optimistic about the future and have full trust in the political and economical structure of the country.

7. How do you think the FDI would impact on engineering trade relation between India and Germany?
India and Germany create an array of opportunities for one another, which remain uncharted. There is great mutual benefit in building upon their past partnership. The purpose is not only to highlight both the nation's attractiveness for investment and business through various avenues but also to lay a foundation for long term affiliation between these two vibrant and promising economics. Hence we look forward to interesting and promising period in the Indo-German trade in the engineering sector

8. What are the emerging sectors of co-operation between the two countries?
India is anticipated to play a vital part on global canvas when it comes to outsourcing of engineering services. With India becoming an important outsourcing hub, we find German companies increasing sourcing components and castings for various industries like construction machinery, valves, process equipment, pumps etc. Hence the growing Indian market and the investment in core sectors offer optimal opportunity to the German machinery manufacturers and technology suppliers. Among the emerging industrial segments, the top 5 sectors are as follows

  • Mechanical Power Transmission Engineering
  • Material Handling
  • Textile Machinery
  • Machine Tools
  • Construction Equipment and Building Material Machinery

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December'15/January 2016