Modi needs to work harder if he wants to sell Make in India to Germany

Six months after Prime Minister Narendra Modi took his Make in India pitch to Germany promoting India as a manufacturing hub and investment destination, the industry of this European economic powerhouse remains unconvinced about putting in its money here.

Indeed, for all the Make in India hard-sell by the government abroad and assiduous wooing of German industry during the Hanover Fair in April this year by PM Modi — he jointly inaugurated it with German Chancellor Angela Merkel — the issues German industry heavyweights have with India remain.

Enunciating the misgivings German industry continues to have about investing in India, the German ambassador in India Martin Ney said on Thursday, "German companies have very high expectations from their investments in India but they do have issues."

It’s noteworthy that India went down two notches to the 142nd position out of 189 countries in the World Bank’s "Doing Business" rankings for 2015.

So when Merkel visits India for three days beginning October 4, Modi will need to work hard to convince her and the business delegation accompanying her that steps to ensure "ease of doing business" are indeed being taken.

The several concerns of German companies about investing in India for now still remain. Citing a recent survey done by the Indo-German Chamber of Commerce — it has as its members over 7,000 German and Indian companies — the German envoy said among the issues they have pertain to "questions of corruption, questions of legal framework for investments, safety of taxation, Intellectual Property Rights and legal ramifications of investment".

The envoy added, "I do believe that the government of PM Modi is tackling all these issues but the industry says we do need further progress in order to implement these planned investments. The two leaders will deliberate on these issues."

It will be the fourth meeting of the two leaders in less than eleven months. Indeed, buoyed by the fact that the Modi government had come to power with a thumping majority, a German delegation comprising business heavyweights had flown down to meet the new PM in June 2014. At the time, delegation members had expressed their optimism about doing business in India.

Merkel’s visit is an important one not merely because of the third round of Indo-German Intergovernmental Consultations on a wide gamut of issues but also because the German leader is accompanied by no less than six senior federal ministers, among them vice-chancellor and federal minister of economic affairs and energy Sigmar Gabriel and federal minister of economic cooperation and development Gerd Muller.

Each of the six visiting ministers will hold separate meetings with their Indian counterpart as India and Germany look to forge even stronger ties and take bilateral ties onto an even higher trajectory.

Germany is India’s sixth largest trading partner globally and largest trading partner among European Union (EU) nations. An estimated 1,700 German companies are doing business in India and their numbers are rising.

Yet another important issue to be discussed between the two leaders will be the revival of the stalled talks on the proposed India-EU Free Trade Agreement (FTA). Germany, a key EU member, is keen that the talks resume and is hopeful that the two sides will return to the negotiating table soon.