With $ 33 billion in bilateral trade in 2023, the partnership between India and Germany spans diverse sectors, including green hydrogen and Industry 4.0. SMEs, skill development and sustainability initiatives are key focus areas, driving economic progress. The alliance exemplifies strategic global cooperation and offers a blueprint for success, as discussed at a webinar hosted by FIRST Construction Council, in association with “Construction World”, “Smart Manufacturing & Enterprises” and “Equipment India” on 17 January 2025. 

The Indo-German relationship has evolved from basic trade to multifaceted collaboration, with over 1,800 German companies operating in India. Machinery forms nearly a third of the $ 33 billion bilateral trade, with key growth sectors like renewable energy, digitalisation, and green hydrogen.

Highlighting the company’s journey from a small market entrant in 1998 to India becoming its largest manufacturing hub, VG Sakthikumar, Managing Director, Schwing Stetter India, said, “Germany trusted India’s ability to deliver quality at competitive prices.” He added that machinery is now exported back to Germany and beyond, reflecting the mutual growth driving this alliance.

Germany has been pivotal in advancing India’s manufacturing capabilities and Industry 4.0 ambitions. Maanav Goel, Managing Director, Hoffmann Quality Tools India, noted that pre-1947 interactions were largely cultural but evolved into industrial collaboration post-Independence.

German companies like Hoffmann have developed high-quality tools for industries like automotive and aerospace. “Sustainability is not a cost but an investment,” added Goel, pointing to energy-efficient, precision-engineered solutions that bolster India’s manufacturing sector.

Innovation anchors the Indo-German partnership, with Fraunhofer leading advancements in sustainability. Fraunhofer’s technologies, such as digital twins for manufacturing and waste-to-construction solutions, enhance efficiency in Indian industries.

Anandi Iyer, Director, Fraunhofer Office India, emphasised India’s role as a hub for entrepreneurship and rapid technology adoption, earning the company € 70 million annually from Indian contracts. She advocated for democratising technology, particularly for SMEs, suggesting innovation clusters to ensure equitable access and foster growth across all business sizes.

Indeed, SMEs are central to the Indo-German partnership, driving economic growth and job creation. Manoj Barve, India Head, BVMW, addressed their impact, noting that German SMEs contribute 55 per cent to GDP and employ 60 per cent of the workforce. Similarly, India’s SMEs account for 30 per cent of GDP, playing a vital role in job creation and economic development.

Barve emphasised the synergy between India’s IT expertise and Germany’s engineering strength, enabling mutual benefits like advancing ‘Make in India’ and addressing Germany’s energy-led inflation. He also urged India to enhance gender diversity, learning from Germany’s 62 per cent female workforce supported by family-friendly policies. Addressing workplace challenges can help India unlock women’s full potential, in his view. 

Expanding globally is challenging for SMEs, requiring market insights and consistent engagement. Nitin Pangam, Managing Director, Maeflower Consulting, emphasised upon the need to understand target markets, citing opportunities like the US Inflation Reduction Act and Saudi Arabian infrastructure projects.

He further highlighted the role of the Government and institutions like Invest India and VDMA India in supporting international growth of SMEs. Pangam suggested India adopt models like Enterprise Ireland, which effectively helps SMEs expand into global markets.

Skill development is a key pillar of Indo-German collaboration. Schwing Stetter’s Sakthikumar highlighted the company’s training initiatives for operators and welders, addressing gaps in India’s construction machinery sector. “Our state partnerships have produced highly skilled workers, including global welding champions,” he shared.

Iyer advocated for adopting Germany’s dual education system, where 5 per cent of the workforce is in training. “Industry-driven skill programmes can bridge gaps and align India’s workforce with evolving technologies,” she emphasised.

The future of the Indo-German partnership lies in embracing sustainability, digitalisation and workforce empowerment. Rajesh Nath, Managing Director, VDMA India, summarised the webinar’s discussions, emphasising that sustainability and supply chain resilience will play a defining role in the relationship moving forward. “Leveraging technology and deepening institutional collaboration are key to the future,” he concluded, signalling the importance of continued cooperation in these areas.

The optimism expressed by the panellists suggests that Indo-German collaboration is not only beneficial for both countries but also sets a powerful example for global partnerships. As Iyer aptly remarked, “The future is bright but it requires strategic steps to make SMEs and innovation the engines of growth.”

The Indo-German partnership represents a model of what strategic international cooperation can achieve. By focusing on trade, technology, sustainability and workforce development, both nations have been able to create a mutually beneficial relationship that drives growth and innovation.