India and Germany: Entering a new era

A post by:     Michael Kundel
Last updated: 2024-02-28

While Germany is coming under increasing pressure as a business location, India is developing more and more from an emerging country into an economic power. This is a great opportunity for a company like RENOLIT - and a strong prospect for the European economy. Let's take advantage of it! In this article, I will highlight the dawn of a new era of economic cooperation and provide an insight into RENOLIT's goals in India.

My close relations with India

India holds a great fascination for me. As CEO of RENOLIT, I have traveled to the country every year since 2010. For a week, I personally cultivate my contacts with important Indian companies and the branches of key European customers from north to south. This has resulted in long-standing relationships and I have gained valuable experience and insights into the Indian market, country and culture. This enables us to evaluate business opportunities and systematically develop the market. This requires patience - because success is not always immediate.

A few days ago, I returned from my trip to India this year. Rich in new experiences and contacts. Many impressions and conversations in Delhi, Pune and Bangalore have encouraged me to consistently pursue our growth course with our Indian team.

India's emerging economic landscape

India has been the most populous country in the world since 2023 and is growing faster than all other industrialized nations with a forecast economic growth of 6 to 7% in 2024. The country is already the fifth-largest economy and the third-largest automotive market in the world, as well as an important supplier of active pharmaceutical ingredients. India is thus developing from an emerging country into an impressive economic power. This spirit of optimism can be felt throughout the country. 
In addition, India has a considerable potential of excellently trained software developers and IT specialists, which practically all Western technology companies draw on.

Opening up new perspectives: Germany's opportunity

India's development is a great opportunity for Germany. As a business location, Germany and Europe as a whole are burdened by international crises, a shortage of skilled workers and many other structural challenges. 
At a time when one market, Russia, has almost completely collapsed and at the same time other countries are coming under critical scrutiny due to the political situation, we urgently need additional partners and new sales markets.  
In my view, India will be incredibly important for Germany and Europe in the future and is still underestimated today.

Fascination and challenge

Hardly any other country is as fascinating as India. An incredibly rich culture paired with enormous dynamism. The development that I have experienced in recent years during my visits and contacts in India is impressive.

What makes India so interesting for us

India is changing rapidly and is confidently claiming a more important role in the global community, most recently as the host of the G20 summit. The Indian government is opening trade, technology and skilled labor corridors to Europe and is currently negotiating a free trade agreement with the EU. The country has a very young, inquisitive and increasingly well-educated population that is striving for greater prosperity. This creates great sales opportunities in many industrial and consumer-related sectors. 
India has also achieved great success in reducing bureaucracy and fighting corruption and is pursuing a very ambitious program for the expansion and storage of renewable energies, to which we are making an important contribution with film solutions, as well as the entire infrastructure. The expansion of airports (74 new airports!) and airlines in the last decade alone are impressive examples. 
The Modi government's "Make in India" program has been driving massive direct investment in the country for several years. This provides additional and desirable incentives for foreign companies to set up production facilities in India and thus sustainably increase value creation in the country.

We have to overcome these challenges

Despite the economic successes, there is still a great deal of poverty, a caste system that is difficult for us to accept with little permeability and, even though great progress has been made, there is still a huge backlog in terms of reducing bureaucracy, infrastructure and transportation in the country. Anyone who has ever been to India knows what I am talking about.

In addition, the Indian market is very price- and competition-intensive in many areas and the country is only making slow progress in developing a functioning waste and waste disposal industry. 
And even if we Europeans are culturally closer to India than China, for example, we still need to have a strong understanding of cultural and religious customs that need to be observed in business life. One example: factory openings or expansions are usually held with priests on pre-selected auspicious days and according to set ceremonies. To disregard these traditions would be tantamount to breaking a taboo.

Finally: Growing political support

What has always depressed me in recent years has been the comparative lack of interest in India on the part of German politicians. That is why I am now very grateful to Federal Minister of Economics Robert Habeck. He is the first German Economics Minister to visit India in over ten years. I see growing political support for better economic relations with India - but I hope that this will increase significantly in the near future.

RENOLIT's strategic commitment in India

RENOLIT has been active in India since 2008, initially with a sales office near the capital Delhi and since 2012 with a production joint venture for the automotive industry in Pune and a logistics center set up there in 2023. 
We have gradually expanded our commitment over the past 15 years and now serve the market in all business areas both through imports and local production with our experienced and highly motivated Indian team on site. 
Our aim is to further intensify this commitment in the coming years and to open up the Indian market even more for RENOLIT.

Conclusion: The future of India

An important part of the future of the global economy lies in India - that can be said with great certainty from today's perspective. It is very important to me that Germany and Europe exploit the associated opportunities effectively and assess the risks appropriately. India also offers interesting prospects for RENOLIT. The Management Board and I as CEO are working on tapping into these and thus positioning the company even more strongly and regionally. This is something to which I want to make a significant contribution and I look forward to doing so!