German companies have a long association with the Indian market and were amongst the first to enter India nearly 500 years ago. The first economic links between India and Germany date as far back as the 16th century. Jakob Fugger, a merchant and banker from Augsburg, financed the voyage of the first German ships to Goa, thus opening up the trade route between Germany and India. Between the 16th and the 18th centuries, a number of German companies were established with the aim of trading with Indian and other East Asian countries. In 1867 the first corporate house from Germany, Siemens, built the first telegraph connection between Kolkata and London, via Berlin.

Since then both countries have cooperated in a number of areas right from basic machinery to marine science and now space research. As a result, German companies continue to test the Indian soil and today VDMA has more than 550 member companies in India. VDMA (Verband Deutscher Maschinen- und Anlagenbau e.V), which is the German Engineering Association, is the largest association representing the capital goods industry in Europe.

Due to their deep understanding about Indian culture, working conditions and dynamism, German industry has been optimistic even during the economically tough times in the past two years. The political scenario clubbed with various complications in the Indian economy was one of the toughest challenges faced by VDMA member companies in India. It is a matter of pride that each one of them withstood this storm and aspires to achieve the highest glory and success in the coming years.

The 3rd VDMA Engineering Summit held in Mumbai during September 2014 is part of this growth story. The summit has been growing in terms of participation since its inception in 2012 and the event this year witnessed around 140 participants. Mr Rajesh Nath, Managing Director, VDMA India, in his opening remarks mentioned that the GDP growth had dipped to below 5% levels in the past two years. India's lumbering economy registered its fastest growth in two and a half years for the quarter ended June 2014. The GDP grew at 5.7% compared with a provisional 4.6% expansion in the previous 3 months. This growth pick-up was mainly on account of rebound in manufacturing and mining sectors. This positivity is only triggered after the elections and the unanimous victory of Mr Narendra Modi, ushering in a new government. He mentioned that manufacturing, which makes up nearly 15% of the economy, grew 3.5% in the 3 months to end June, recovering from 1.4% and 1.2% contraction in the past quarter and year ago period. The mining sector expanded 2.1% compared with 0.4% and 3.4% and 3.9% declines a quarter earlier and in the corresponding previous quarter.

Last year VDMA India had successfully organised a delegation of member companies from Germany, who came to India with focus on "Sourcing Opportunities in India". This year in March VDMA welcomed a delegation visit of VDMA Board members from the Agriculture Machinery division. Besides interaction with Ministry of Agriculture in New Delhi this delegation visited Morinda, Ludhiana, Chennai and Pune. VDMA also organised a seminar on German Technology for the Textile Industry in Mumbai and Coimbatore, which was attended by around 350 people. Also for the European Ceramic Technology Suppliers (ECTS), a seminar on Technology for the Heavy Clay Industry was organised in Kolkata, which was attended by around 150 brick manufacturers throughout India and in May this year, together with ASSOCHAM an "Indo-German Business Symposium" was organised.

Mr Nath mentioned that the vocational training project of VDMA in Cleaning System and Facility Management is progressing well. Around 250 youths have already been trained and the response from the industry offering placements has been very encouraging. These youths, primarily from humble backgrounds, are being absorbed in the Facility Management industry with a good starting salary. Besides the 2 centres in New Delhi at GMR Foundation and DB Tech, another centre has been opened recently in Mumbai at Don Bosco School. Member companies Karcher and Hako have provided their equipments free of charge at these training centres.

The Chief Guest, Mr Michael Siebert, Consul General of the Federal Republic of Germany in Mumbai thanked VDMA for being present in India helping the German companies bridge the gap between two countries. He said that when VMDA started in Indian in late 1990s, the export of German machinery to India was only 500 million Euros. This has since grown exponentially, almost sevenfold, peaking of 3.6 billion Euros in 2011. According to him, textile machinery and automotive sectors are only two examples of this long standing Indo-German co-operation.

Today, there are over 1450 German companies present in India, together creating several lakh jobs in this country. In Asia, India is Germany's 2nd most significant market. With the 2nd fastest growing services sector in Asia, India has emerged as an important back office destination for Global and Fortune 500 companies, also for Germany. Today, Europe is India's largest trading partner, and Germany makes up for the biggest part of it. The bilateral trade is around Euro 16 billion, and it is growing again after two difficult years.

Mr Siebert also the recent visit of German Foreign Minister Steinmeier to India and his meetings with PM Modi and several ministers in Delhi. India and Germany are partners in many areas of international politics, from Afghanistan to the reform of the United Nations. Minster Steinmeier's visit also focused on identifying a road-map for co-operation on renewable energy, infrastructure including corridors and smart cities, cleaning of rivers and vocational training, as well as high technology and the manufacturing sector. German Chancellor Angela Merkel is due to visit India again next year for a new round of governmental consultations.

Mr Ulrich Ackermann, Managing Director, Foreign Trade Division within VDMA Frankfurt elaborated how the Indo-German relationship has grown over the years. Out of the many things he stated what clearly stood out was that while India was Germany's 20th largest trade partner in 2011 (Statistisches Bundesamt, 2012), the previous year saw India climbing up the ladder finishing as 10th largest partner in the mechanical engineering sector. He stated that in 2013, the turnover of German mechanical and plant engineering dropped by 0.5% to about Rs 16,000 billion (Euro 206 billion). With a share of 16% of machinery exports worldwide, the German capital goods industry remained "world export champion". In 25 of 32 internationally comparable sub-sectors, German companies were among the top 3 export suppliers. All the important competing countries within Europe as well as the USA expect only a modest growth in the engineering industry. By contrast, he expects India - after two years of decline - a growth of more than 5% for 2014 in comparison to last year. In recent times, the most important sectors were power transmission technology, textile machinery, machine tools, valves and fittings, air handling technology, food processing and packaging machinery and materials handling technology.

Germany's share in India's machinery imports is around 16%. He mentioned that India is still one of the most important future markets for the German manufacturers. A next important step will be the realization of the vision Industry 4.0 and the development of innovative products and product concepts. The term "Industry 4.0" stands for a complex technical revolution with the potential to turn the entire value added chain inside out. Simply speaking, the aim of Industry 4.0 is to computerise traditional product processes and to create a "smart" factory.

Among other speakers at the summit were:

• Mr K C Mani, MD of BDB India, the Knowledge Partner for the Summit, who released a publication "An Overview on Indian Manufacturing Industry"
• Mr V G Ramakrishnan, Managing Director - South Asia, Frost & Sullivan, who delivered the keynote address on "Trends in Indian Manufacturing Industry"
• Fr A M Joseph - Executive Director of DB Tech (Don Bosco Institute of Technology) who spoke on "Skill Gap and Need for Skill Training in India"
• Mr Rahul Gangal, Prinicipal, Roland Berger Strategy Consultants whose focus was on "India Post Elections - Kya Ache Din Ayenge"
• Ms Sujata Banerjee, Trainer on Intercultural issues, Germany, who spoke about "Old and new challenges and opportunities in Indo-German co-operations from an intercultural perspective", and
• A panel discussion on "Leadership in Engineering Industry".

The esteemed panellists were: Debasis Nandi, MD, Lenze Mechatronics Private Ltd; Ramesh Palagiri, MD, Wirtgen India Pvt Ltd; Anton Reinfelder, MD, Groz, Beckert Asia Private Limited; Suresh Vasani, MD, Lechler India Pvt Ltd; Ruediger Schroeder, MD, Karcher India Pvt Ltd. The panel discussion was moderated by Rajesh Nath. The panellist contributed through personal experience and activities being undertaken by individual companies.

This article is an abridged version of the original report provided by VDMA India. The complete report is available at: http://india.vdma.org/article/-/articleview/4164638