India to seek German support on outsourcing

FICCI delegation lead by commerce minister to visit Germany

PTI | October 4, 2010



A high level FICCI business delegation to Germany being led by Commerce and Industry Minister Anand Sharma will seek support from a key member of the European Union over the campaign against outsourcing, particularly in the US.

"We will explain to them, like we did it in the case of the US that outsourcing is good for their economy. It is a two-way street," FICCI President Rajan Bharti Mittal said here. The delegation comprising senior industry leaders would be in Germany from October 6 to October 8.

Mittal, who will be part of the delegation to Dusseldorf, Dresden, Berlin and Frankfurt, said "thankfully" a bill against outsourcing has been defeated in the US Senate.

Germany, being the largest member of the 27-member EU bloc, would be briefed about the advantages of the outsourcing for the west.

Mittal cited the case of a multi-billion outsourcing contract given by the Bharti group telecom company to the multinational IBM .

The Commerce and Industry Minister, who forcefully, conveyed India's concern over anti-outsourcing voices in the US to the Obama administration recently, is expected to raise the issue with German authorities as well.

The other key issue India wants to discuss with the Western countries is about the USD one billion being lost by India by way of deductions from the income of professionals on short-term visits in the name of social security.

On bilateral relations, Mittal said the effort would be to set in motion mechanisms that would help achieve the mutual trade target of Euro 20 billion by 2012 from the 2009 level of Euro 13 billion.

Cooperation on scientific research and technology is also high on the agenda.

"We will go the whole hog in seeking FDI from Germany," he said. He said Germany's strength in technology is well matched by India's attributes of a high growth market, favourable demographics, cost-efficient production and R&D base, access to wider South Asia market and availability of skilled labour.

In Dusseldorf on October 6, Sharma will release a FICCI-KPMG Knowledge Paper on 'India & Germany: Exciting Present, Promising Future'.

As per the paper, an increasing number of German firms are expected to invest in India in automotive, chemical, pharmaceuticals, infrastructure and renewable energy sectors.

"This raises the expectation that FDI to India from Germany could be raised many times over the current level of USD 3 billion," he said.

Currently, Germany is the third largest investor in India among European investors, after the UK and the Netherlands.

However, the direct FDI annual inflows from Germany is less than USD 1 billion.

Mittal said the team will seek German FDI into the Indian infrastructure like roads, ports, power . According to government assessment, India will require a huge investment of USD one trillion in the next Five Year Plan for infrastructure.
 

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