German firms look to India for long-term growth

Three quarters of all managers indicate plans to increase investment activity in India, often substantially, according to a survey conducted by Indo-German Chamber of Commerce (IGCC) among over 100 German companies operating in India. “Fresh investments by German companies already established in India will boost FDI levels to new heights. With many new companies setting up business, inflows can only strengthen further,” IGCC Director General Bernhard Steinruecke said in a statement Wednesday.

The survey reveals that most German managers look to India for long-term growth in an otherwise growth starved world. “Many investors are optimistic that India can soon catch up with China in terms of significance for their global businesses”, said Steinruecke. “Their confidence is based on the strong conviction that India will deliver sustained high economic growth over a long period of time.”

Nearly half of all managers surveyed expect India’s economy to expand by eight to nine percent in the current financial year. Twelve percent even forecast more than nine percent growth. Over a third (34 percent) anticipates seven to eight percent economic growth this year.

There is conviction that India can sustain this rate of expansion: 28 percent see the average growth rate surpassing nine percent during the course of the next three years. Thirty five percent see it ranging between eight and nine percent over this period, and 31 percent expect seven to eight percent average growth until 2013.  Nearly one third of all surveyed German managers consider India and China to be of equal importance for their company. More than a quarter feel India will match China’s importance for their business in five years. The same number believes India to catch up with China within 10 years.

“It is significant that German companies translate the opportunities presented by India’s expanding markets into a sound financial performance,” said Steinruecke.