BERLIN, April 25 (UPI) -- German Chancellor Angela Merkel is making no secret of her plan to increase cooperation with India on all levels, be it trade, energy or counter-terrorism.
Merkel and Indian Prime Minister Manmohan Singh on Sunday opened the Hanover Fair, the world's largest technology and industry fair. And for the second time since 1985, India is acting as the fair's partner country.
Times have changed since the mid-1980s: India is not coming to Germany to plead for business; this time, it is Germany who is doing the courting. India, the former developing country, has turned into a world power when it comes to economic growth. In 2005, the Indian economy -- boosted by Western outsourcing and a strong services sector -- grew by an estimated 7.6 percent, accompanied by several successive record-highs at the Bombay stock exchange.
At the fair, both leaders announced they would aim for closer cooperation when it comes to fighting terrorism and international organized crime. But Merkel focused her speech there on India's huge economic potential, calling it a country with "tremendous growth possibilities." The German leader sees India -- after China, the world's fastest-growing economy -- as a place where German companies should invest and may succeed.
Merkel supports free market competition; while citizens all over Europe take the streets in the masses protesting against the effects of globalization, Merkel has repeatedly said the phenomenon should be accepted as a welcome challenge for Germany's economy, which still suffers from nearly 12 percent unemployment.
"We can't be cheaper, so we need to be better," she has said. Lured by its political stability, she favors democratic India over communist China as the place to do business with.
Her view is mirrored by analysts, who say German technology and goods have the potential to do well in India.
"India has an increasingly well-funded middle class," George Joseph, India expert at the German bank Dresdner Bank, Tuesday told United Press International. "Imagine a market of 100 million to 150 million people all able to consume."
Germany, Europe's largest economy and the continent's second most populous nation, has roughly 82 million citizens.
Joseph said India's growing automobile sector, in which Japanese and Korean firms have a head start, contains a high potential for German companies; but so but so do the IT branch, the pharmaceutical industry and the energy sector.
India's hunger for electricity is growing by the day, and German firms are eager to feed that appetite. But critics say Germany has waited too long to invest in the Indian market, giving competitors such as the United States, China and Japan a head start. In the past Germany has sought business in Eastern Europe, overlooking Asia in the process, Joseph said.
The German-Indian trade volume in 2005 stood at roughly $9.4 billion, as opposed to nearly $62 billion with China.
Gerd Krieger, energy expert at the Association of German Machinery and Plant Construction, or VDMA, an industry group, said German technology remains attractive to India.
"Germany belongs to only a few countries that offer high-class technology for the energy sector," Krieger Tuesday told UPI. "India has a huge energy and electricity demand. When it comes to clean energy, such as clean coal, the renewables and energy efficiency, Germany enjoys a leading position in the world."
Krieger added, however, that India should implement a coherent energy concept to ease foreign investment. He hopes the new Indian-German energy initiative, to be launched Wednesday, will decrease bureaucracy, allowing more middle-sized German companies into the Indian market.
While German firms have often been put off by India's terrible infrastructure, that itself may attract them in the future, Joseph said.
"Modernizing India's infrastructure is a giant job," he said. "We are talking about freeways, airports, ports, railway systems. The German construction sector could hugely benefit from this."
A first success has come to German company Fraport, which runs Frankfurt International Airport. Fraport won a bid to modernize and expand New Delhi's airport, a 30-year job.
But what is India trying to get out of closer ties with Germany?
Observers say the country is trying to create more business with the European Union, and hopes Germany can help bring down trade barriers with the 25-member body.
The willingness to do business with Europe is clear at the Hanover fair, where nearly 350 Indian companies, more than ever before, are exhibiting. Several business deals have been inked in the context of the meeting between Singh and Merkel: German railway giant Deutsche Bahn and India Railways signed an agreement to more closely cooperate in the future when it comes to research and technology, and Airbus sold five A340 airplanes worth $1 billion to Indian Kingfisher Airlines.
"Made in Germany still has a very good reputation in India," Joseph said.
