Keine Alternative - GERMAN-FOREIGN-POLICY.com

Keine Alternative - GERMAN-FOREIGN-POLICY.com https://www.german-foreign-policy.com/news/detail/9304 No alternative Habeck is pushing ahead with the conclusion of a free trade agreement with the EU during a visit to India. Business representatives clearly reject the plan to replace the China business with the India business. 21 July 2023 Soon the fourth largest economy in the world Economists basically see some potential for the expansion of economic relations with India, which Germany and the EU are striving for. The Indian economy is growing rapidly, expected to be around six percent this year; India has recently become the country with the fifth largest economic output in the world before the former colonial power Great Britain and will probably displace Germany from the place of the fourth largest economy in the world in just a few years. According to forecasts from the financial industry, for example from Goldman Sachs, India could have risen in absolute dollar values to the second largest economic power in the world behind China and ahead of the USA in 2075; if the economic output is calculated according to purchasing power parity, this would probably be the case much earlier. 1] Its market volume alone makes the country interesting for German companies in principle. German-Indian trade has recently risen from 23.3 billion euros in 2021 to almost 30 billion euros in 2022. Investments are also increasing again; most recently, SAP 55 million euros and Siemens Healthineers 160 million euros invested in the expansion of their locations in the southern Indian Bengaluru, an eleven-million-inhabited metropolis that is considered India's Silicon Valley because of its booming IT industry. Foreign economic on the sidelines In order to give trade with India a boost, the federal government is pushing vigorously for a free trade agreement between the EU and the country. Negotiations on this were already started in 2007, but then dragged on and were provisionally discontinued in 2013. They were resumed last year. Federal Minister of Economics Robert Habeck held talks about this yesterday Thursday in New Delhi. In February, the Berlin Foundation for Science and Politics (SWP) pointed out that India belongs neither to the Asian free trade zone RCEP nor to the trans-Pacific free trade alliance CPTPP, i.e. is "outside down in Asia - a disadvantage "in the location competition for new industrial settlements." 2] As a result, under pressure, it has now increased its efforts to conclude new free trade agreements. In 2021, one was concluded with Mauritius, in 2022 one with the United Arab Emirates; others with the Gulf Cooperation Council (GCC, association of the Arab Gulf States), Israel, Great Britain and Canada are in the works. This also opens up new opportunities for the EU. Of course, the SWP warns that one can be "with good reason skeptical" whether the divergent interests of both sides regarding "market opening, liberalization and sustainability could be reconciled". The problems of the India business Even beyond the debate on the free trade agreement, the German economy has always heard quite skeptical assessments of the prospects of the India business. Although German politicians regularly drummed for moving investments from China to India or at least making new investments there instead of in the People's Republic, it is said that this would be opposed to problems that have been known for decades but have not been eliminated to this day. 3] This applies, for example, to the "bureaucracy and a complex regulatory environment" in the country, stated a few days ago by the Vice President of the German Chamber of Industry and Commerce (DIHK) Kirsten Schoder-Steinmüller.[ 4] Among the "biggest challenges for German companies in India" were also rampant corruption and "deficiencies in the infrastructure", Wolfgang Niedermark is quoted by the general management of the Federal Association of German Industry (BDI). 5] Just recently, the Foxconn group from Taiwan broke off the attempt to build a chip factory in India together with the Indian conglomerate Vedanta for almost 20 billion US dollars, frustrated. The economist Ashoka Mody from Princeton University judges: "The claim that India is booming is completely false." 6] In reality, the country "cannot keep up with China's productivity." Opportunities in solar energy Nevertheless, Berlin is doing everything in its best to vigorously boost the India business. "India is a counterweight to China," said Minister of Economic Affairs Habeck before his current trip; it is therefore essential to strengthen economic ties. 7] Chances of success are currently emerging in solar energy. In India or especially in its northwestern state of Gujarat, where Prime Minister Narendra Modi served as head of government before taking office in New Delhi from 2001 to 2014, a booming solar industry has emerged in recent years, which has so far successfully produces solar modules on a large scale. Although their production costs are still noticeably above those achieved in China. But the Indian government subsidizes the industry with funds in the amount of 80 percent of the additional costs incurred in Gujarat compared to the cheapest manufacturers in China. 8] Habeck will be accompanied on his trip to India by the managing director of the start-up Enpal, which sells solar systems on a large scale; it is to be checked whether Enpal can switch to Indian solar modules. However, India's capacities are limited. As the International Energy Agency (IEA) estimates, the Chinese world market share will fall with successful production in India and the USA, but only from - depending on the market segment - today 80 to 95 percent to 75 to 90 percent in 2027. 9] Arms exports The Federal Government is looking to expand not least the arms exports to India, which have repeatedly reached low three-digit million amounts in recent years. Defense Minister Boris Pistorius announced during a visit to New Delhi at the beginning of June that he wanted to work to ensure that arms exports to India are equated with those to Australia or Japan; this would greatly facilitate the approval procedures. 10] On the sidelines of Pistorius' visit, representatives of the German shipyard ThyssenKrupp Marine Systems (TKMS) and the Indian Mazagon Dock Shipbuilders from Mumbai signed a memorandum of intent that provides for the joint development of new submarines for the Indian Navy. If the two companies come into play, then the submarines are to be built together in India. Both companies had already cooperated in the construction of four submarines in the 1980s; two of them were built at the time at the TKMS predecessor HDW, two at Mazagon. 11] Berlin also supports the German offer with the aim of breaking the hitherto close Indian-Russian arms cooperation. Of course, it may be doubted that this will succeed: A few days ago, New Delhi offered Moscow to deliver BrahMos missiles to the Russian armed forces after the end of the Ukraine war. These were developed in Indian-Russian cooperation; they are manufactured in India. 12] [1] How India could rise to the world's second-biggest economy. goldmansachs.com 06.07.2023. [2] Hanns Günther Hilpert, Bettina Rudloff, Christian Wagner: Negotiations on a free trade agreement between India and the EU. SWP-Current 2023/A 11. Berlin, 10.02.2023. [3] See "Involving India". [4] Three-day trip to India: Robert Habeck wants to expand cooperation. rnd.de 19.07.2023. [5] Why India is becoming more important for Germany. rnd.de 19.07.2023. [6] Mathias Peer, Klaus Stratmann: Why India will not become the new China. handelsblatt.com 19.07.2023. [7] "Time to put your heads in the water and cool them down." n-tv.de 19.07.2023. [8], [9] International Energy Agency: Renewables 2022. Analysis and forecast to 2027. Paris, December 2022. [10] Pistorius wants easier arms deals with India. tagesschau.de 06.06.2023. [11] TKMS And MDL Join Forces To Build Submarines For And In India. navalnews.com 08.06.2023. [12] Navya Beri: India considers selling BrahMos missiles to Russia. wionews.com 16.07.2023.