The German Economics Minister was just in India to promote an improvement in mutual relations. New figures now confirm an increase in German exports to the subcontinent.
India, ensnared by business and politics as an alternative to China, purchased significantly more goods from Germany in the first half of the year. German exports to what is now the most populous country in the world increased by more than 19 percent in the first half of the year compared to the same month last year to around 8.6 billion euros, according to calculations by the Reuters news agency based on preliminary data from the Federal Statistical Office. Traditionally, India mainly buys machines and chemical products from Germany as well as other vehicles, as the statistics say, including trains, ships and airplanes.
Despite the rapid growth, India is by no means as important a sales market as China: Although German exports to the People’s Republic were around 8.5 percent weaker in the first six months, at more than 49 billion euros they were still far above the level of the Indian business. In June alone, German exporters sold more to China than to India in the entire first half of the year.
And that despite the fact that the world’s second largest economy after the USA is suffering from poor exports, flagging consumption and the ailing real estate market. The Chinese gross domestic product (GDP) therefore only grew by 0.8 percent from April to June compared to the previous quarter. This clearly missed the result of the first quarter of 2.2 percent. In addition, youth unemployment is at a record high.
“Counterweight to China”
According to the Bundesbank, India has primarily gained a foothold in the area of world market production for electronic goods. “For the most populous country in the world, this is associated with hopes for a faster industrialization and convergence process,” says the current monthly report. “India could thus form a certain counterweight to China in the next few years.”
According to forecasts by the International Monetary Fund (IMF), the Indian economy will grow faster than China’s both this year and next. GDP is expected to increase by 5.9 and then 6.3 percent, while China’s is only expected to increase by 5.2 and 4.5 percent.
