Berlin

Indiaoffers German companies a compelling investment proposition, driven by its large and growing domestic market, strong economic fundamentals, and supportive policy environment, industry chamber FICCI said on Wednesday.

Ficci Secretary General Anant Swarup also said German technological expertise, precision engineering and innovation capabilities complement India's scale, skilled workforce and cost competitiveness.

"India presents a compelling investment proposition for German companies, combining a large and growing domestic market, strong economic fundamentals, expanding infrastructure and a supportive policy environment," Swarup said.

He is accompanying Commerce and Industry Minister Piyush Goyal here. The minister is here on an official visit and is leading a large delegation of businessmen. The minister will also visit the Netherlands.

The visit is important as India and the 27-nation European Union (EU) has finalised a free trade agreement. The pact is expected to be signed in December and may be implemented next year.

Germany and the Netherlands are members of the EU.

Swarup said that an important attraction for global companies is India's significant untapped consumption potential.

"Per capita consumption across several sectors, including automobiles, steel, chemicals, plastics, electronics and consumer durables, remains substantially below global averages," he said.

He added that as incomes rise and urbanisation accelerates, this gap offers enormous opportunities for German companies to invest in manufacturing capacities to serve both domestic and global markets.

"We see particular opportunities in advanced manufacturing, industrial automation, automotive technologies, specialty chemicals, renewable energy and electronics," he said.

He expressed hope that Goyal's visit will enable meaningful partnerships, joint ventures and trade prospects for the Indian industry.

"Germany is one of India's most important economic partners in Europe, and we see significant potential to deepen cooperation in advanced manufacturing, automobiles and auto components, engineering goods, electronics, green technologies and Industry 4.0," he said.

The India-EU FTA offers an important opportunity to build integrated value chains, with India emerging as a competitive manufacturing and sourcing hub for German industry.

Swarup said the focus must now shift towards converting these opportunities into concrete investments, joint ventures and stronger trade flows.

The bilateral trade between India and Germany rose by about 5 per cent to USD 31 billion (exports USD 11.52 billion and imports USD 19.5 billion) in 2025-26.

Germany is the 10th largest investor of India. The country has received USD 495 million FDI in the last fiscal year.

India's primary imports from its top European trading partner includes heavy machinery, aircraft, electrical equipment, and precision medical instruments.

Meanwhile, exports to Germany focus on electronics and smartphones, automotive components, organic chemicals, textiles, and packaged pharmaceuticals.