Encouraged by the performance of their subsidiaries in India, corporate German is looking to hire more and invest in expanding capacities in spite of the slow pace of reforms and recent scandals, according to a report released by the Indo-German Chamber of Commerce (IGCC).
In a survey report released ahead of the German Chancellor Angela Merkel?s visit to India next week, among German companies operating in India, 55% reported a 20% increase in revenues in the last financial year, 16% reported a 10-20% rise in revenues, and 12% saw revenues rise by up to 10%.
More than a third of the companies surveyed said profits had grown by more than 20%, while about 20% reported a 10-20% increase.
Talking to mediapersons on Friday, Bernhard Steinruecke, director general of IGCC, said the recent rise in inflation, interest rates and scandals concerning the 2G spectrum had not affected German companies’ investment plans in India.
?The majority of the companies said that they want to increase their head counts by 10-20%. Most of the companies said that, yes, the recent scandals have harmed the image of India. On the other hand, when we asked whether that would curtail the investments, the vast majority said no,? Steinruecke said.
The extent to which German companies are already involved in India becomes evident in a new statistical report which states, ?Taken together, the 120 largest German companies in India currently employ 1,73,000 staff. Over and above, they give employment through exclusive agents, dealers, vendors, franchisees and suppliers in the range of 3,00,000 jobs. This means the German companies are a major employment generator in India.?
?So apparently these companies, in spite of these challenges, see the opportunities to expand and invest,” Steinruecke said. More than half of the companies expect sales to surge by over 20% in 2011-12, while about 30% anticipate an increase of between 10% and 20%.
German investor optimism about India is also on the rise, said the IGCC, and about 57% of the respondents from the survey expected India’s gross domestic product to rise by 8-9% while 70% pegged it above 8% for the next three years.
Talking about Indo-German trade, Steinruecke said India?s share in bilateral trade had been increasing over the past few years and the balance, which is still in favour of Germany, was tilting.
?In the first three months of this year, the trade has gone up by 30%. So the target of reaching euro 20 billion in trade volume by 2012 will be reached. That is for sure,? he said.