Within the EU, Germany is India’s main trading partner and its sixth most important trading partner worldwide

– Rajesh Nath

Managing Director, VDMA India

Govt of India has initiated major reforms in construction and mining sector opening up lots of new opportunities. How is VDMA helping the German enterprises reach out to Indian market?

VDMA, which represents the German machinery and plant manufacturer’s association has been in operation in India for more than two decades now, and the construction and mining machinery division has been proactive in catering to the interests of the Indian infrastructure and the mining industry since the very beginning. The Indian office of the German Engineering Federation (VDMA) helps to support the German Machinery Manufacturers in the Indian market and facilities tie-up and collaboration with the Indian Industry. It is a “one point” contact for the Indian companies interested in German technology and for the German manufacturers seeking information on the Indian industry and contacts to the Indian companies.

VDMA India engages regularly with the important stakeholders in the Indian industry be it the relevant associations in this sector like CII or ICEMA or FICCI to support the development of this sector through technology input from the German industry.

Further to give the German and European companies a platform to reach out to the Indian industry, VDMA organized a German Pavilion at the IME exhibition in Kolkata and at the EXCON exhibition in Bangalore this year. Both these exhibitions were quite successful and helped the German industry connect with relevant clients in these sectors. Further at BAUMA, we will be organizing an Indo-European Session on 26th October 2022 which will help to highlight potential of the Indian market and share success stories of VDMA members in India. At the International Mining Machinery Exhibition (IMME 2022) in Kolkata from 16th to 19th November, VDMA will be organizing a German Pavilion and we are looking forward to a good participation.

How can VDMA contribute to GoI’s ‘Atmanirbhar Bharat’ scheme by inviting German machinery manufacturers to set up plants in India?

Atmanirbhar Bharat Abhiyaan or Self-reliant India campaign is the vision of new India envisaged by the Hon’ble Prime Minister Shri Narendra Modi. On 12 May 2020, our PM raised a clarion call to the nation giving a kick start to this campaign and announced the Special economic and comprehensive package of INR 20 lakh crores – equivalent to 10% of India’s GDP – to fight Covid-19 pandemic in India.

The aim is to make the country and its citizens independent and self-reliant. He further outlined five pillars of Atmanirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand. The Finance Ministry further announced Government Reforms and Enablers across Seven Sectors under Atmanirbhar Bharat Abhiyaan. An outlay of INR 1.97 Lakh Crores was announced for the Production Linked Incentive (PLI) Schemes across 14 key sectors, to create national manufacturing champions and to create 60 lakh new jobs, and an additional production of 30 lakh crore during next 5 years. The companies taking benefit of the PLI schemes would require robust and proven technology. Here the German machinery manufacturers can be competent partners.

How can Indian construction and mining equipment industry reap the benefits of recent R&D achievements of German R&D?

The total trade between Germany and India is roughly about 22 billion euros. The important aspect is that it is not trade in one direction only. There has been a healthy increase in the export of Indian equipment and components to Germany. It has increased by 38%. This also gives immense opportunity to Indian entrepreneurs to look at Germany as a destination for their products. India can follow the important role of industry-academia interaction which is so successful in Germany. At VDMA we have the working groups. Here as per the requirement of the industry, the projects are identified and given to the universities and research centers. This is a win-win situation as the R&D that is done is very industry-specific. Further in Germany the dual system of training has been a very successful. Involving the students at a young age to help them to get industry exposure really helps to make them “fit” for the industry. In India the graduates many times lack the practical knowledge that is required by the industry. So, Academia interaction and engaging students in practical training is really important. The industry should provide training opportunities to the students as this can help to increase their employability. The German manufacturers in India also follow a rigid training program for apprentices as well as their own workforce. This will help in upscaling the skill levels of the workforce. Further the companies offer the latest cutting-edge technology in the market. This would help to increase productivity and safety in India.

Can you cite some successful case studies regarding Indo-German collaboration in this space of construction and mining equipment?

The bilateral relations between India and Germany are founded on common democratic principles. India was amongst the first countries to establish diplomatic ties with the Federal Republic of Germany after the Second World War. Last year we celebrated 70 years of Indo-German diplomatic cooperation. The ties however go back to more than 500 years and both the countries have cooperated in number of areas right from machinery to space research upto marine science.

There are several reputed German companies in the mining and construction equipment sector who are well established in India and contributing to the infrastructure development in the country. Companies like ThyssenKrupp Industries, Schwing Stetter, Putzmeister, Wirtgen, Liebherr, Herrenknecht, Beumer, PERI to name just a few have state of art manufacturing facilities in India and also source from Indian suppliers and vendors. The companies have all made a mark in their field and are suppliers to various projects be it in Coal Mining, Road Construction, Material Handling, Cement, Tunnelling and Shafting, Industrial and Building construction, mineral processing etc. To meet the infrastructure challenges in India, it is imperative that proven technology is implemented to keep the projects within cost and time frame. Here we find that German machinery manufacturers can be suitable partners to the Indian construction as well as Mining sector to meet these challenges

How can Germany help Indian sector to clean up the environment, ensure best pollution control practices and safety of the workers?

Germany has committed an additional 10 billion euros assistance to India to help achieve climate action targets set for 2030 which include sourcing 50% energy requirement from renewables and installing 500 GW of non-fossil fuel electricity capacity. The joint statement which was issued after talks between Prime Minister Narendra Modi and German Chancellor Olaf Scholz mentions clearly that Germany intends to strengthen its financial and technical cooperation and other assistance to India with a long-term goal of at least 10 billion euros of new and additional commitments till 2030 under this Partnership (for green and sustainable development). The two leaders agreed to create a bilateral ministerial mechanism within the IGC to provide political direction to this partnership.

At the COP-26 in Glasgow, as per goals announced by India, we have to achieve carbon intensity reduction of 45% over 2005 levels by 2030. As deliverables of the Indo-German Partnership for Green and Sustainable Development, both sides agreed to develop an Indo-German Green Hydrogen Roadmap based on the inputs by the Task Force supported by the Indo-German Energy Forum (IGEF). India and Germany signed a work plan for cooperation to strengthen quality infrastructure, reduce technical barriers to trade, enhance product safety and strengthen consumer protection. The work plan 2022 was signed during the virtually held 8th annual meeting of the Indo-German Working Group on Quality Infrastructure, led by the Indian Ministry for Consumer Affairs, Food and Public Distribution, and the German Federal Ministry for Economic Affairs and Energy.

Skilling of human resource has been a very vital component. Has there been any plan in this regard by VDMA or other premier German technological institutions?

India and Germany have recently signed two major agreements, referred to as the Joint Declaration of Intent, for cooperation in the field of skills development and vocational education. The Ministry of Skill Development and Entrepreneurship signed the Joint Declaration of Intent with the Federal Ministry for Economic Cooperation and Development (BMZ), Germany. The association will provide a systematic structure for conducting mutual consultations, advisory work and policy exchanges at ministerial and expert levels and provide technical assistance. This collaboration will help further develop the successful cooperation in the various fields covered by the Indo-German Joint Working Group on Vocational Education and Training.

One declaration of intent (DoI) is with the Federal Ministry of Education and Research (referred to as BMBF) for Cooperation in Skill Development and Vocational Education and Training, whereas the second was for Dual VET initiative marking Sustainable Growth of Skills with Siemens Limited, India. The intended cooperation agreements will give special emphasis to enhancing the quality of trainees thus enabling them to gain and apply further technology skills and subsequently help them to find employment in innovative, sustainable sectors and technologies such as renewable energy, e-mobility and energy-efficiency.

What are the challenges faced by the German enterprises and suggestions to iron out those challenges in reaching out to the Indian market?

Within the EU, Germany is India’s main trading partner and its sixth most important trading partner worldwide. Conversely, India was in 23rd place for Germany last year. In spite of the pandemic, India is increasingly becoming an important market for German companies, the potential of which has barely been tapped. According to the survey of German companies in India performed by VDMA in April 2022, 93% of the respondents forecast good business in 2022. Infact for 2021, the average growth for the German companies in India has been around 24% and for 2022 the forecast is around 14% on top of a good base achieved in 2021.

Like in any other country, German companies face some operational challenges in India also. Most of the respondents in the business climate survey, see Indian bureaucracy and its various administrative hurdles as a challenge. Despite significant improvement in recent years, these issues still persist, especially outside of the main business hubs/centers. Supply chain disruptions in certain sectors specially electronic components and high logistics costs are some other issues. However with the National Logistics Policy announced by the government the aim would be to bring down the present logistics cost of 13% to 14% to around 9%. This would certainly be a big savings for the companies.

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