Germany-India’s trade has remained unchanged over the last decade
Amidst rising tensions with Canada, German chancellor Olaf Scholz’s visit to India assumes importance, especially as the Western European country has increased the visa quota for skilled Indians.
The decision comes at a time when Canada is looking to tighten its Visa rules.
Strategically, Germany has also been trying to pivot away from China, but an analysis of trade and investment data shows that both countries would need to go the extra mile to enhance cooperation.
A Moneycontrol analysis shows that India’s trade with Germany has remained unchanged over the last decade, with the country accounting for a 2-3 percent share in India’s trade and investment portfolio.
In FY24, India exported $9.8 billion of products to Germany and imported $16.6 billion of goods.
Exports to Rhineland were 2.3 percent of India’s total exports, unchanged from 2.4 percent share Germany commanded in FY15.
On the other hand, imports from Germany at 2.45 percent were also lower than the 2.9 percent share witnessed a decade ago.
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Investment has exhibited a similar trend.
Investment from the country was at its lowest level, with FDI equity inflows falling to $505 million from $547 million in FY23 and $1.13 trillion a decade ago.
The share of investment from the country declined from 3 percent in FY15 to 2 percent in FY24, as the Western European nation slipped in ranks from India’s seventh-highest FDI destination to ninth.
Green shoots
However, a closer look at the numbers indicates that the nature of trade may be turning. Even though India’s exports to Germany have stagnated around the 2-3 percent mark, the commodity mix is undergoing a change.
High value products like smartphones and medicines are India’s top exports to Germany, compared with clothing and readymade garments a decade ago.