The Hindu : Tamil Nadu News : Weak dollar a chance to boost Indo-German trade

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Weak dollar a chance to boost Indo-German trade

Special Correspondent

“Indian exporters should shift their focus to euro-area markets”

Bernd Muetzelburg

CHENNAI: The depreciating dollar should be viewed as an opportunity to boost Indo-German trade, according to German Ambassador to India Bernd Muetzelburg.

“ Indian exporters, especially in sectors such as textiles, have very low margins, and they have been hit hard by the falling dollar...I would imagine that shifting the focus to euro-paying markets would be the right option right now,” he said, speaking on the sidelines of the annual general meeting of the Indo-German Chamber of Commerce here on Friday.

If Indian and German businesses used this opportunity, he felt, it could go a long way in evening up the balance of trade in the long run. While Germany is the second largest exporter to India, it stands seventh in the list of importers from India.

Of course, Germany itself will also be affected by the crisis in the world’s largest economy. :We are an export-oriented nation, every third job is related to exports, so if a large market like the U.S. is hurt, we will also feel the hurt,” he said. However, the high volume of trade within the European Union itself, as well as the fact that German manufacturers, especially carmakers, had set up manufacturing units within the U.S., would blunt the impact of the falling dollar on the German economy, Mr. Muetzelburg said.

He agreed that the U.S. economic crisis could also increase the German focus on investments in Asia, and he reckoned that India would be a major beneficiary. “I don’t think India and China are alternatives for German companies. We need you both...But the Chinese euphoria has, to a certain extent, evaporated,” he said, pointing to China’s relatively complex system, tough State negotiators and poor intellectual property rights as the reasons for the rising preference for India.

Mr. Muetzelburg was optimistic about the growth prospects for German companies in India, saying that in terms of profits, they seemed faring much better than German firms in Germany itself.

Bernhard Steinruecke, director-general of the Chamber, said there were seven billion euros worth of publicly announced German investment in India in the pipeline. If one added the unannounced investments, German businesses were set to pour 10 billion euros, or $15 billion, into India in the next few years. A lot of this money would come to south India, especially Tamil Nadu. The growing relationship with the south led to the creation of a consulate-general in Bangalore.

Roland Herrmann, Consul-General in Chennai, said investing in other areas of co-operation such as scientific research, technical training, German language promotion and student exchanges would help the business ties thrive in the long run.

As part of such efforts, Germany would set up a technical training institute in Pune next year, under public-private partnership. The institute would offer the German system of dual education.

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