Mun/Com/201/1/2011. Monthly Economic and Commercial Report CGI, Munich, Germany: February 2011 (Consular Jurisdiction: Bavaria & Baden-Wurttemberg)

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1 Mun/Com/201/1/2011 Monthly Economic and Commercial Report CGI, Munich, Germany: February 2011 (Consular Jurisdiction: Bavaria & Baden-Wurttemberg) Executive Summary German business confidence rises German GDP grew by 3.6 in 2010 GDP of Bavaria grew by 3.2 during the 1 st half of 2010 GDP of Baden-Wuertttemberg grew by 5 during the 1 st half of 2010 Indo-Bavarian trade during 2010 at 2.11 billion (24.31 change) Indo-Baden-Wurttemberg trade during 2010 at 2.33 billion (24.07 change) Indo-German trade during 2010 at billion (17.9 change) Daimler Unveils its new truck brand Bharat Benz for Indian market Meeting with Bavarian Economic Minister India Economic Day at Mannheim 7 th Wine Festival Stuttgart Meets Mumbai Visit of Economic Minister of Baden-Wuerttemberg to India Visit of Bavarian Business Delegation to India Spielwarenmesse 2011 ISPO 2011 BioFach India s participation and signing of an MoU for India s participation as Country of the year at BioFach 2012 f.re.e- The new C-B-R 2011 Inhorgenta 2011 Baden-Wuerttemberg s export and import marked new record in

2 I) Economic Outlook Germany German business confidence rises 1. German business confidence has risen for the ninth time in succession, marking a 42-year high in February 2011, according to Munich based Ifo Institute. The Ifo business climate index climbed to from in January. Ifo surveys 7,000 German companies monthly, to get a sense of confidence in the economy. More firms have reported a better business situation than in the previous month and they continue to be optimistic with regard to their business prospects for the coming half year. The upswing in the German economy is robust, said Ifo Institute president Prof. Dr. Hans-Werner Sinn in a statement. Germany is benefiting from strong global economic activity and a very loose European Central Bank monetary policy oriented towards struggling eurozone economies like Greece, Ireland and Portugal. Confidence in exports, manufacturing and construction had risen. Retailing is the only sector in which the business climate has somewhat cooled off, reported Ifo Institute. II) GDP Figures 2. The German economy has rapidly recovered from the economic crisis. The GDP grew by 3.6 in 2010, the largest economic growth registered since reunification. During the crisis year 2009, GDP shrank by 4.7. GDP growth rates of Bavaria and Baden-Wuerttemberg for the year 2010 are yet to be published. During the first half of the year 2010, GDP of Bavaria grew by 3.2 and GDP of Baden-Wuerttemberg grew by In its annual projection for 2011, the Federal Government forecasted that the upswing will continue in 2011 and the GDP will grow this year by 2.3. According to a recent report published by Bavarian Business Association (VBW), Bavarian GDP should grow by close to 4 in 2010 and by 3 in According to a report published by the Baden-Wuerttemberg State Statistical Office, Baden-Wuerttemberg economy is expected to grow by 4.75 in 2010 and by 2.5 in In value terms, GDP of Germany at current prices in 2010, amounted to Euro 2498 billion. GDP values of Bavaria and Baden-Wuerttemberg for the year 2010 are yet to be published. In the year 2009, GDP of Bavaria at current prices amounted to Euro 429 billion and Baden- Wuerttemberg Euro 343 billion. Comparative GDP figures along with growth rates of Bavaria, Baden-Wuerttemberg and Germany are given below. GDP Growth Rate GDP (at current prices) in Year 2007 Year 2008 Year 2009 Jan-June Period Bavaria Baden-Wurttemberg Germany In billion Euros Year 2007 Year 2008 Year 2009 Period Bavaria Baden-Wurttemberg Germany 2

3 III) Inflation rate 5. Inflation rate in Bavaria in February 2011 was 2.1. Compared to previous year, the price for heating oil increased by 33.5, petrol by 12.5, electricity by 7.5 and food by Inflation rate in Baden-Wuerttemberg in February 2011 was 2.4. Compared to previous year, the price for heating oil increased by 33.1, petrol by 13.3, electricity by 8.8 and food by 3.3. Sr. States Inflation rate ( change over same period in previous year) No February 2010 February Bavaria Baden-Wurttemberg IV) Trade figures Value in billion Euros & change in over same period of previous year Bavarian Export Bavarian import Total Trade of Bavaria Export of Baden-Wuerttemberg Import of Baden-Wuerttemberg Total Trade of Baden-Wuerttemberg German Exports German Imports Total Trade of Germany V) Trade with 10 major Countries and India The trade figures of Bavaria and Baden-Wuerttemberg along with the rankings and value of trade for the year 2009 are given in tables below. Bavarian Imports (In million Euro) Rank Country Austria China Italy USA Czech Republic France Russia Netherlands Hungary UK Total Imports Bavarian Exports (In million Euro) Rank Country Austria USA Italy France UK China Spain Netherlands Belgium Switzerland Total Exports

4 Baden-Wuerttemberg s Imports (In million Euro) Rank Country USA Switzerland France Ireland Italy China Netherlands Austria Czech Republic UK Total Imports Baden-Wuerttemberg s Exports (In million Euro) Rank Country France USA Switzerland Netherlands Austria UK Italy China Belgium Spain Total Exports VI) Indo-Bavarian/Baden-Wurttemberg/German Trade 7. Indo-German trade seems to have completely recovered from the impact of the global economic crisis. The bilateral trade has increased in 2010 by 17.9 to billion, compared to 2009 (during 2009, trade declined by 2.28 to billion). With this, Indo-German trade has crossed the 15 billion mark for the first time. Indian exports to Bavaria increased during 2010 by to 734 million, to Baden-Wuerttemberg by to 806 million where as exports to Germany as whole reached 6.19 billion, marking an increase of India s total trade with Bavaria increased by to 2.11 billion, while the two-way trade with Baden-Wuerttemberg increased by to 2.33 billion. Value in million Euros & change in over same period of previous year Indian Exports to Bavaria Indian Imports from Bavaria Total Trade Indian Exports to Baden Wuerttemberg Indian Imports from Baden Wuerttemberg Total Trade Indian Exports to Germany Indian Imports form Germany Total Trade

5 Evolution of India's Trade With Bavaria Value in Million Euros Year Evolution of India's trade With Baden-Wuerttemberg Value in Million Euros Year Evolution of India's Trade With Germany Value in Million Euros Year 5

6 Major 10 Indian Exports to Bavaria Year 2008 Year 2009 Sy.Co Product category Euro Euro Apparel of silk or man-made fibres, excl. Of knitted 804 or crocheted fabrics Electronic valves and tubes and other electronic 865 components Paints, varnishes and mastics Bearings, gears, gearing and driving elements Textile products n.e.s Machinery & Apparatus for electricity production 861 distribution and control Apparel of cotton, excl. of knitted or crocheted 806 fabrics Apparel of knitted or crocheted fabrics of cotton Footwear Articles of leather and leather clothes (excl. 812 footwear) Total Imports of Bavaria from India Major 10 Indian Imports from Bavaria Year 2008 Year 2009 Sy.Co Product Category Euro Euro 885 Automobiles Machine Tools Measuring and automatic control instruments and 872 appliances Chassis, bodies, engines, parts and accessories for 884 motor vehicles, etc Machinery for working rubber or plastics Medical and surgical equipment and orthopaedic appliances Machinery, n.e.s Bearings, gears, gearing and driving elements Industrial plants Machinery and apparatus for electricity production, distri. & Cont Total Exports of Bavaria to India Major 10 Indian Exports to Baden-Wurttemberg Year 2008 Year 2009 Sy.Co Product category Euro Euro Television and radio receivers, sound or video 864 recording or reproducing appar. & associated goods Apparel of cotton, excl. Of knitted or croche.fabrics Machinery & Apparatus for electricity production 861 distribution and control Jewellery, goldsmith's or silversmith's wares Apparel of knitted or crocheted fabrics of cotton Articles of leather and leather clothes (excl. footwear) Chassis, bodies, engines, parts & acce. for motor 884 vehicle.etc Basic pharmaceutical products Articles of metal, n.e.s Automobiles Total Imports of Baden-Wuerttemberg from India

7 Major 10 Indian Imports from Baden-Wurttemberg Year 2008 Year 2009 Sy.Co Product category Euro Euro 845 Lifting and handling equipment Motors and engines (excl.engines for 841 agri.tractors,aircraft,road vehicles) Machinery for Textile Apparel and leather Production Medical and surgical equipment and orthopaedic 871 appliances Chassis, bodies, engines, parts and accessories for 884 motor vehicles, etc Machinery for paper production and printing Measuring and automatic control instruments and 872 appliances Machinery and appara. for electricity production 861.distribution & Control Machinery, n.e.s Machine Tools Total Exports of Baden-Wuerttemberg to India VII) Five principal export commodities S. No Name of Export Commodity Bavaria Year Motor Vehicles and Parts 2. Machinery Electrical Products Chemicals & Pharmaceuticals 5. Food Products 6574 Total Exports Value in million Euros S.No Name of Export Commodity 1. Machinery Motor Vehicles and Parts Pharmaceuticals Electrical products 8454 Baden- Wurttemberg Year Electronic products- data processing and optical products 8365 Total Exports VIII) Five principal import commodities Value in million Euros S.No Name of Import Commodity Bavaria Year Motor Vehicles and parts 2. Electrical products Machinery Chemicals & 8656 Pharmaceuticals 5. Food industry 6218 Total Imports S.No Name of Import Commodity 1. Pharmaceuticals Machinery Electronic products-data processing and optical products Motor vehicles and components Baden- Wurttemberg Year Chemical products 8218 Total Imports

8 IX) Top 5 export and import items in India-Bavaria and India-Baden Wurttemberg trade EXPORTS TO INDIA Top export items of Bavaria to India - Year Medical & surgical equipment and orthopedic appliances Machinery, n.e.s Top export items of Baden- Wuerttemberg to India. Year Machinery for paper production & printing Measuring & automatic control instruments and appliances 7 Bearings, gears, gearing & driving elements 7 Machinery for electricity production & distribution 9 Industrial plants 10 Machinery, n.e.s Machinery for electricity production & distribution Others Machine Tools Others IMPORTS FROM INDIA Top Bavarian import items from India. Year Machinery for electricity production & distribution Apparel of cotton, excl. of knitted or crocheted fabrics Apparel of knitted or crocheted fabrics of cotton Footw ear Top import items of Baden-Wuerttemberg from India. Year Articles of leather and leather clothes (excl. footw ear) Chassis, engines, parts & acce. for motor vehicle Basic pharmaceutical products Articles of metal, n.e.s 62 9 Articles of leather and leather clothes (excl. footw ear) Automobiles Others Others X) India s Investment interest Daimler Unveils its new truck brand Bharat Benz for Indian market 8. Daimler, the Stuttgart based world s largest truck manufacturer, unveiled its fifth truck brand Bharat Benz, the exclusive new brand for its Indian market. Bharat Benz will offer its customers an entire range of trucks from 6 to 49 tons across various applications. Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG & Head of Mercedes Benz Cars unveiled the Bharat Benz brand at the production location in Oragadam, near Chennai on February 17, The new range of trucks, a combination of Daimler s DNA and India s market knowhow will be developed and built in India, said Dr. Zetsche. India has become the world s second largest market for Medium- and Heavy-duty trucks. Daimler expects the Indian truck industry to double in size by Daimler sees the new Indian middle market as the most promising sector and the new truck product portfolio will be offered to them, said Mr. Andreas Renschler, Head of Daimler Trucks and Buses. The company will roll out trucks in 2012 from its manufacturing facility at Oragadam. Spread over about 160 hectares, the facility also houses a state of the art test track. Daimler India Commercial Vehicles Pvt. Ltd (DICV) has a total investment of over INR 4400 crores (around 700 million). Daimler AG is commemorating 125 years of the automobile this year. 8

9 XI) India-Related Events Meeting with Bavarian Economic Minister 9. Consul General met Mr. Martin Zeil, Deputy Minister-President & Minister of Economy of Bavaria, along with senior officials from the Economic Ministry over dinner in Munich on February 1, The meeting was conceived as a prelude to the Ministers visit to Bangalore, Pune and Delhi along with a 40 member strong business delegation from February 13-19, Consul General briefed the minister on the current status of the Indian economy, the growth prospects, emphasising the potential areas to expand cooperation between Indian and Bavarian companies. Mr. Zeil expressed satisfaction over the growing Indo-Bavarian relations and was enthusiastic about his visit. He enquired on the prospective sectors for Bavarian companies and also on the Indian experience with regard to legislations and regulations in various sectors. India Economic Day at Mannheim 10. Chamber of Commerce in the city of Mannheim organised an India Economic Day event on February 1, 2011 in co-operation with the Indo-German Chamber of Commerce (IGCC) Duesseldorf. The event included various presentations by experts on India. Mr. Dirk Matter, MD, IGCC, spoke on the current economic situation in India. He also gave a presentation on Choosing Location. The other presentations were; by Roedl and Partner on legal and taxation aspects on India; by Germany Trade and Invest GmbH on Indian infrastructure; by Industrieplanung Organisation GmbH on realisation of construction projects in India; by SKP Crossborder consulting Pvt. Ltd on Company formation in India; by Odenwaelder Kunstoffwerke Gehaeusesysteme GmbH on their experience of working with Indian sales partner. Over 100 participants attended the India Economic Day, which concluded with podium discussions by experts on various topics raised by the participants. 7 th Wine Festival Stuttgart Meets Mumbai 11. Honorary Consul of India for the German States of Baden-Wuerttemberg and Rhineland- Pfalz Mr. Andreas Lapp organised the 7 th Wine Festival Stuttgart Meets Mumbai from February 4-5, 2011 at Mumbai. This landmark annual Wine Festival is organised as a part of the 43-year long partnership between the sister cities of Stuttgart and Mumbai. The Honorary Consul also led a delegation of 52 members from Germany from different sectors like tourism, film & media, education, jewellery and wine to India to participate in the 7 th Wine Festival. Workshops on tourism, education and jewellery were also conducted in Mumbai on the sidelines of the Wine Festival. Mr. Klaus-Peter Murawski, Deputy Mayor of Stuttgart represented the city of Stuttgart this time. Visit of Economic Minister of Baden-Wuerttemberg to India 12. Economic Minister of Baden-Wuerttemberg Mr. Ernst Pfister visited Chennai, Mumbai and Pune from February 6-12, 2011 along with a 17 member delegation. The delegation visited bc India 2011, the Indian version of Bauma, the International trade fair for construction machinery, building material machines and construction vehicles in Mumbai besides hosting Business Forums titled Baden-Wuerttemberg, The German Southwest: your Gateway to Indo-German Synergies both in Chennai and in Pune in cooperation with Indo-German Chamber of Commerce and Industry. The delegation visited factories of major companies like Mercedes Benz India, Bajaj, Mahindra and Mahindra etc. The delegation also visited IIT Madras and informed that they intend to look for suitable universities from Baden-Wuerttemberg to enter into cooperation with IIT Madras. In Mumbai, Mr. Pfister met Mr. Aziz Mehndi Khan, Principal Secretary, Ministry of Economics. 9

10 Visit of Bavarian Business Delegation to India 13. An important delegation headed by the Bavarian Economic Minister Mr. Martin Zeil was expected to visit Bangalore, Pune and Delhi from January 13-19, However, the minister could not make it to India due to medical reasons. The 40 member strong business delegation was led by the permanent secretary in the Economic Ministry Dr. Hans Schleicher. In this context, Invest in Bavaria, the investment promotion wing of the Ministry of Economy recorded a video message of the Consul General to be screened during the visit of the delegation at various venues in India. Tata Communications organised a special video conference on 14 th February amongst the visiting Bavarian delegation in Bangalore, Tata Communications headquarters in Mumbai and their operation centre in Munich, where the Consul General participated in the discussions. The delegation hosted a Bavarian Business Seminar along with a Bavarian reception on the occasion of the celebration of the 10 th anniversary of establishment of Bavarian State Office in Bangalore. A Round Table Business Meeting was also held in Pune focusing on automotive, engineering and IT sector. XII) Trade Fairs in Germany Spielwarenmesse Spielwarenmesse 2011, the 62 nd international toy fair, world s leading fair for toys, hobby and leisure-time articles was held in Nuremberg Trade Fair Centre from February 3-8. Around 2600 exhibitors from 63 countries exhibited their latest products and services in the fair. The fair attracted trade visitors from over 100 countries. Spiewarenmesse is held annually since A total of 21 Indian companies participated in the fair this time. India s official participation was under the aegis of Sports Goods Export Promotion Council (SGEPC) and 12 Indian companies participated under their banner. Indian companies exhibited various products such as educational games, children books, puzzles, toys, fabric toy cushions, board games, magic tricks & sets, cricket sets, soccer balls, arts craft & hobby sets, kid s room furnishings and toy tyre/gear. SGEPC organised a special India Evening at Hotel Sheraton Carlton in Nuremberg on February 5, The event was attended by over 100 people representing German and international toy industry, media, Indian exhibitors, etc. The next Spielwarenmesse 2012 will take place at the same venue from February 1-6, ISPO ISPO 2011, international trade fair for sports equipment and fashion was held in Munich Trade Fair Centre from February 6-9, With more than 80,000 trade visitors from 106 countries, ISPO attracted the major stake holders in this segment. ISPO is an annual trade fair and it was first held in A total of 2267 exhibitors from 49 countries participated in 2011 wherein 41 were from India. India s official participation was under the aegis of Sports Goods Export Promotion Council (SGEPC) and 36 Indian companies participated under their banner. Indian companies exhibited various products such as volleyball, football, handball, hockey equipment, boxing accessories, track suits and sportswear at the Fair. The next ISPO 2012 is scheduled from January 29 to February 1, BioFach India s participation and signing of an MoU for India s participation as Country of the year at BioFach BioFach 2011, the leading trade fair in the world for organic products, was held in the Nuremberg Exhibition Centre from February 16-19, 2011, together with Vivaness, trade fair for natural personal care and wellness. The exhibition duo welcomed professional trade visitors from 131 countries this year. A total of 2544 exhibitors from 86 countries displayed wide range of products and services at the fair. A strong contingent of 51 companies participated from India, of 10

11 which 22 companies participated under the banner of APEDA. The India pavilion set up by APEDA was impressive which also served organic food products to foreign trade visitors. The International Competence Centre for Organic Agriculture (ICCOA), India led an 8 member delegation, including officials from the State of Karnataka, Nagaland and Sikkim to BioFach. APEDA organized an interactive seminar titled Recent Developments in India's Programme for Organic Production' on February 16, 2011 at International Congress Centre at Nuremberg Trade Fair Centre which was attended by around 100 guests. Mr. Asit Tripathy, Chairman, APEDA made the opening remarks; Consul General gave the inaugural address giving an overview of Indian agricultural sector, with special emphasis on organic products; Dr. PVSM Gouri gave a presentation on Recent Developments in India's Programme for Organic Production'. Another highlight was the signing of an MoU for sealing India s participation as Country of the Year at BioFach 2012 at an impressive ceremony on February 17, by Mr. Asit Tripathy, and Mr. Bernd Diederichs, CEO, Nuremberg Trade Fair Group. f.re.e- The new C-B-R f.re.e- The new C-B-R 2011, the leisure and travel exhibition was held in New Munich Trade Fair Centre from February 23-27, The fair attracted approximately 95,000 trade visitors from all over the world exhibitors from 37 countries presented their travel/tourism related services/products at the fair. Two Indian companies, including India Tourism office, Frankfurt participated in the fair. Inhorgenta Inhorgenta 2011, the 38 th international trade fair for watches, clocks, jewellery, precious stones, pearls and technology was held at Munich Trade Fair Centre from February 25-28, More than 32,000 trade visitors from 79 countries visited the fair. 15 Indian companies exhibited their products and services in the fair comprising gems, gold jewellery, silver jewellery and precious stones, out of a total participation of 1116 exhibitors from 36 countries. Majority of the Indian companies were satisfied with the number of queries/orders received in the fair. Inhorgenta Europe 2012 will be held at the same place from February 10-13, XIII) General Economic News Baden-Wuerttemberg s export and import marked new record in Baden-Wuerttemberg s export and import achieved new record figures in According to a recent article published by the State Statistical Office, the State s exports in 2010 increased by 24.8 to billion and the imports increased by 20 to billion. During the crisis year 2009, exports declined by 17.4 and imports declined by The most important sector in export was automotive and automotive component, which accounted for 22.5 and increased by 42.4 in 2010, compared to The second most important sector was machineries with an export share of 20.8 and its exports in 2010 increased by of the States total export went to EU. The top export destinations were USA ( 13.6 billion), France ( 12.6 billion), Switzerland ( 12.6 billion), Netherlands ( 11.4 billion) and China ( 11 billion). Baden- Wuerttemberg s exports to India increased by to 1.52 billion. XIV) Publicity of Trade Fairs/Events Conducted in India 20. During the month, CGI Munich gave wide publicity among the German industrial associations, business federations and chambers of commerce & industry to the following trade fairs/events in India to encourage German participation: 11

12 A. Tex-Trends India-2011 from February 2-4, 2011 at Pragati Maidan, New Delhi, organised by Ministry of Textiles, Government of India, in association with the Textile Export Promotion Councils ( B. Indo-EU Reverse Buyer Seller Meet at Chennai on March 22, 2011 and at Bengaluru on March 23, 2011 ( ) 21. The report issues with the approval of Consul General. (Dr. Binoy George) Consul (PIC) March 15,