A Recipe For Growth If India is to achieve inclusive economic success, it must build on its relationship with Germany

    The quintessential strategic task of both India's internal and external policy is to foster domestic growth and overcome poverty in India, Shashi Tharoor states in his latest book. We agree. 

    India has written a success story since the economic reforms designed in the early 1990s by then finance minister Manmohan Singh. Today, it has a middle class comprising more than 200 million people. For 2025, 500 million are predicted. 
    But although India has nearly 20% share of the world population, it has not even 2% share in world trade. If it is true that India needs at least 8% annual GDP increase for inclusive growth, this gap between 20% and 2% needs to be closed. Indian leaders know: If you want 8% growth, you cannot go it alone. You need to open to the outside world. You need partners to cooperate with, partners who have the right tools. 
    Germany has the right toolbox on offer. It is India's gateway to Europe, it can be a leverage factor for India's path towards growth. 
    Europe and India are both global players in the making. Germany in its avant-garde role in Europe is complementary to India in many ways, a perfectmatch for all weathers. Some matchmakers: 
    Germany and India share the same democratic values. They are both anchors of stability, Germany in Europe, India in South Asia. Both look east and west. 
    The demographic factor: Germany needs a skilled workforce, India needs jobs for the young. Our respective situation is almost congenial. 
    Vocational training: The dual system is one of the secrets of Germany's economic success and a model which could help India master the task of training millions of young people. 
    Energy supply: India needs an energy mix in order to satisfy its growing demand. Germany is 
one of the world champions for renewable energy and for the biggest energy resource – energy efficiency. 
    A similar 'entrepreneurial gene': We have decades-old economic ties. The Indo-German Chamber of Commerce in India is the biggest worldwide. 
    So it comes as no surprise that Germany is India's biggest trading partner in Europe. 
    But we could do much more. German technology and quest for perfection together with Indian creativity and entrepreneurial spirit is an almost unbeatable combination. 
    Take the German companies here in India. They are not interested in the quick buck, but in long-term engagement. German companies have created tens of thousands of well-paid jobs in India; they look for win-win situations. They are no corporate raiders; they are bound to stay, as Indian companies do in Germany. Siemens' presence in India dates back to 1867 when it laid the world's first undersea cable from London to Kolkata. Today, Siemens employs around 18,000 people with 21 manufacturing plants across India. 
    We could quote other success stories at will, also from the 'Mittelstand'. They are the best argument for a strong Indo-German partnership. But weneed more. Our potential has by far not been realised. 
    No doubt, the right framework conditions are essential. Reliable investment money is a shy animal and there is a beauty contest out there to receive long-term investment. Therefore, a good investment climate is indispensable. 
    The Indian government is aware of that. Its recent reform agenda is impressive. The reform path is surely a difficult one. It requires political courage and stamina. But it isn't only political leaders who have to show perseverance. Business firms also have to assume responsibility. They must show entrepreneurial courage and stamina. 
    German companies in India draw an overall positive assessment of the situation in India. The large majority of them intend to stay and increase their engagement. That clearly shows that India is the right place to invest, but more needs to be done for a conducive business environment, which in turn should then increase the engagement of these companies. 
    Just two days ago, we had the annual conference of the Indo-German Chamber of Commerce in Mumbai with more than 400 delegates. The discussions reflected exactly this kind of spirit. What we heard often was the request for a timely conclusion of the Free Trade and Investment Agreement between the EU and India. We fully support this request. This would be an enormous boost for trade and investment between Europe and India, and therefore also for Germany and India. 
    This is not about selling out respective interests. It's about the necessary outer leverage for the inner reforms that the Indian government is currently pursuing. 
    We cannot lose out on that. We have only a couple of months left. What is needed is political will and readiness for compromise on both sides. It is not a tactical question, it's a strategic one. Both Germany and India must lead on this. 
    India and Germany – this relationship is a success story founded on complementarities of minds, means and natural inclination. We are just at the opening chapters. We have to write it forward. In our respective offices, we will work for more India in Germany, for more Germany in India, for mutual growth to the benefit of both countries. 
    Steiner is the German ambassador to India and Vishwanathan is the president of the Indo-German Chamber of Commerce.

Diplomacy is good for industry