Embassy of India, Berlin (Economic & Commercial Wing) ***** Executive Summary

Embassy of India, Berlin (Economic & Commercial Wing) ***** Executive Summary German Government expects the economy to grow 0.7 % in and 1.6% in 2013. Germany's economic institutes expect the economy to grow to 0.9% in. They expect budget deficit to fall substantially from 1% in 2011 to 0.6 % in. Unemployment is expected to decline to 2.85 million in from 2.98 million in 2011. The Federation of German Wholesale, Foreign Trade and Services (BGA) expects German exports to increase about 6% in. Consumer Price Index (CPI) for Germany is estimated to have risen 0.1% in April compared to March, mainly due to the rise in energy prices. During Jan. - Feb., Indo-German bilateral trade increased by 6.59% to Euro 3.07 bn.; Indian exports increased by 3.09% to Euro 1.27 bn. and Indian imports increased by 9.22% to Euro 1.79 bn. German engineering and services provider Bilfinger Berger plans to invest nearly Rs 600 crore in the next few years. Deutsche Post DHL has bought the remaining 24% stake in its Indian joint venture from its partner, logistics company Lemuir Group. Gerresheimer AG, one of the world s leading partners of the pharma and healthcare industry, has acquired a majority shareholding (70%) in the Indian company Neutral Glass & Allied Industries Pvt. Ltd. GKD, an architectural mesh manufacturer has established a new subsidiary GKD India Ltd. in Jaipur. Dr. Peter Ramsauer led a high profile business delegation to New Delhi, Kolkata and Mumbai from 9 th to 14 th April. Mr. Kamal Nath, Minister of Urban Development and Dr. Peter Ramsauer, German Minister for Transport, Building and Urban Development signed a Joint Declaration in the field of Sustainable Urban Development in New Delhi on April 9,. Dr. Sudhir Krishna, Secretary, Ministry of Urban Development visited Hannover, Berlin and Frankfurt in April. ****

Embassy of India, Berlin (Economic & Commercial Wing) ***** ECONOMIC AND COMMERCIAL REPORT FOR APRIL (i) Germany s Total GDP and its quarterly growth rates Annual GDP growth in % 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 +0.0% 0.2% +1.2% +0.8% +3.4% +3.3% +1.1% -5.1% +3.7 +3.0 Quarterly GDP growth in % % growth over the earlier quarter % growth over corresponding quarter in the preceding year 2008 2008 1 st Qtr. 1.1 +2.1 2 nd Qtr. -0.4 +3.1 3 rd Qtr. -0.4 +1.1 4 th Qtr. -2.2-1.9 2009 2009 1 st Qtr. -4.0-6.5 2nd Qtr: +0.3-7.4 3 rd Qtr: +0.8-5.0 4 th Qtr. +0.7-1.6 2010 2010 1 st Qtr. +0.5 +2.6 2 nd Qtr. +1.9 +4.4 3 rd Qtr +0.8 +4.0 4 th Qtr. +0.5 +3.8 2011 2011 1 st Qtr. 1.3 +5.0 2nd Qtr. 0.3 +3.0 3 rd Qtr. 0.6 +2.6 4 th Qtr. -0.2 +1.5 2

(ii) State of the German Economy German Government expects its economy to grow 0.7 % in and 1.6% in 2013. According to Germany s Economy Minister Dr. Philipp Rösler, Germany s growth of 0.7% in 2011, higher income and higher employment show that Germany is doing well and remains the growth engine in Europe. The Government expects unemployment to decline to 2.85 million in from 2.98 million in the previous year. Unemployment is expected to decline further to 6.5% (2.78 million) in 2013. The Government s forecast is seen by analysts as renewed evidence that Germany has largely defied the Eurozone debt crisis and generally performed better than its main partners in Europe. Minister Dr. Rössler emphasized that the Government continued to view budget austerity as the best way to secure a solid economy. Germany's Finance Minister Wolfgang Schäuble recently reiterated his commitment to the goal of presenting a next-to-balanced budget in 2014. Germany's economic institutes see a rise in growth to 0.9% in driven by robust domestic consumption and unprecedented competitiveness. The institutes titled their outlook "German economic upswing in the face of the simmering Eurozone debt crisis" - pointing to the "main downward risk". The report stated that if countries in the Eurozone zone were to lose financial market confidence again, the German economy is bound to suffer, adding that "core problems" of the debt crisis remained unresolved. They also criticized a "softening determination" on the part of the Government to consolidate public budgets by cutting expenditure. The institutes expect budget deficit to decline substantially from 1% in 2011 to 0.6% in and 0.2% in 2013. According to a closely watched monthly survey of the Center for European Economic Research (ZEW), the business confidence in Germany continues to rise. The Mannheim-based think tank reported that investor optimism in Germany edged up for the fifth consecutive month, in another upbeat sign for Europe's biggest economy rising to 23.4 points. German exports have picked up unexpectedly in February. It rose by 1.6% in February, reaching Euros 91.3 billion. The second consecutive monthly rise in German exports of goods and services has driven the exports during the first two months of to Euro 177.3 billion, which is Euro 14.7 million more than in the first two months of 2011. Germany's export-heavy economy is also being helped by strong domestic demand, resulting in rising import figures. The Federation of German Wholesale, Foreign Trade and Services (BGA) expects German exports to grow about 6% in. 3

(iii) Rate of Inflation The Federal Statistical Office has estimated Consumer Price Index (CPI) for Germany to have risen 0.1% in April compared to March, mainly due to the rise in energy prices. (iv) Total trade and its growth during the most recent quarter and the previous year (overall) along with trade balance Germany s Foreign Trade (Euro bn.) 2010 % change 2011 % change Jan to % change Item Feb. Exports 952.0 +18.5 1060.1 11.4 177.3 +8.9 Imports 797.1 +20.0 902.0 13.2 149.3 +6.2 Balance of trade 154.9 +11.2 158.1 2.07 28.0 +26.8 4

(v) Total Foreign Trade with 10 Major Countries Germany s Principal Ten Export Destinations during Jan.-Feb. Ranking German Exports Jan. Feb. (Euro bn.) 2011 2010 2009 1. France 17.86 101.55 90.69 81.94 2. USA 13.98 73.69 65.57 53.83 3. UK 11.87 65.33 59.48 53.15 4. Netherlands 11.82 69.31 63.23 54.14 5. China 10.58 64.76 53.63 36.45 6. Italy 9.72 62.12 58.47 51.05 7. Austria 9.62 57.86 53.72 48.23 8. Switzerland 8.04 47.70 41.71 35.32 9. Belgium 7.24 46.40 42.15 51.63 10 Poland 6.86 43.47 38.05 31.62 Total German Exports 177.3 1060.10 952.0 803.20 (India ranked 21st in Germany s global exports in Jan.-Feb. ) Germany s Principal Ten Import Sources during Jan. Feb. Ranking German Imports Jan. Feb. (in Euro bn.) 2011 2010 2009 1. China 6.94 79,16 55.44 59.37 2. Netherlands 6.72 82,16 58.04 72.08 3. France 5.20 66,46 54.55 66.71 4. USA 3.80 48,28 39.91 46.06 5. Italy 3.71 48,31 39.68 45.96 6. UK 3.62 44,89 33.17 44.26 7. Russia 3.56 40,55 24.85 37.08 8. Switzerland 3.00 36,86 28.07 31.16 9. Belgium 2.92 38,26 29.24 39.77 10. Austria 2.83 37,69 29.08 33.14 Total German Imports 149.3 902.00 797.10 814.50 (India ranked 24th in Germany s global imports in Jan.-Feb. ) 5

(vi) Germany s leading five export commodities to the world (Jan.-Feb. ) (Euro bn.) Product Jan. Feb. 2011 2010 2009 Passenger Vehicles and Caravans 19.03 110.64 97.10 73.94 Chassis, Motors and automobile Components 10.79 63.25 54.86 42.97 Pharmaceutical Products 8.11 48.12 47.71 44.36 Equipments for Electricity Generation and Distribution 7.44 46.64 42.24 34.15 Machines 5.60 32.16 28.97 35.82 Total German Exports 177.3 1060.1 951.9 803.2 (vii) Germany s leading five import items from the world (Jan.-Feb. ) (Euro bn.) Product Jan.-Feb. 2011 2010 2009 Oil and Gas 16.20 82.03 51.93 54.94 Motor vehicles and automobile components 7.10 42.71 56.24 62.05 Pharmaceutical Products 5.02 32.59 32.85 31.64 Equipments for Electricity Generation and Distribution 4.68 29.66 25.90 20.97 Passenger Vehicles and Caravans 4.57 31.09 26.57 29.60 Total German Imports 149.3 902.0 736.7 667.10 6

Sl. (viii) Major Service Sectors Total global trade and its growth in trade in services (Euro mill.) 2010 (Jan.-Dec.) 2011 (Jan-Dec.) (Jan.& Feb) Income Spending/ Expenditure Income Spending/ Expenditure Income Spending/ Expenditure 1. Travel 26156 58,596 26156 58,596 3,995 7,384 2. Transport 45113 38,057 45113 38,057 7,215 6,126 3. Insurance 4604 2,769 4604 2,769 655 473 4. Fin.Services 8894 5,185 8894 5,185 1,588 872 Total 1,81,037 1,89,049 1,87,117 1,94,879 30,024 32,321 (Source: Deutsche Bundesbank) BILATERAL (ix) Indo-German Bilateral Trade 2009 % change 2010 % change 2011 % change Jan.- Feb. (Euro bn.) % change Indian 5.10-3.34 6.19 +21.46 7.50 +21.14 1.27 3.09 Exports Indian Imports 7.99-2.37 9.25 +14.32 10.87 +17.48 1.79 9.22 Total Trade 13.09-2.75 15.44 +17.08 18.37 +18.95 3.07 6.59 During Jan. Feb., Indo-German bilateral trade increased by 6.59% to Euro 3.07 bn.; Indian exports increased by 3.09% to Euro 1.27 bn. and Indian imports increased by 9.22% to Euro 1.79 bn. 7

(x) Top 10 commodities of bilateral trade between India and Germany Sl. No Top 10 commodities of India s Exports to Germany Jan.- Feb. (Euro mill.) 2011 2010 2009 1. Cotton Garments 77.26 955,08 676.00 516.18 2. Garments from Interlaced Yarns and Cotton 84.95 813,65 491.72 107.25 3. Chemical Primary Products 71.49 708,75 558.45 454.18 4. Textile Products (not mentioned elsewhere) 62.05 394,48 372.31 277.76 5. Shoes 61.77 493,03 397.90 345.29 6. Leather goods and Leather Garments (excl. Shoes) 56.94 351,87 309.97 394.82 7. Iron-, Sheets and Metal goods 53.95 350,40 335.49 262.06 8. Communication Devices and Equipments 44.32 333,69 283.58 753.60 9. Pharmaceutical Primary Products 44.06 314,01 219.92 205.74 10. Chassis, Motors, & auto components 39.58 312,38 219.25 187.53 Total Indian Exports 1270.00 10,870.09,250.07,990.0 (Euro mill.) Sl. Top 10 commodities of India s imports from No. Germany Jan.- Feb. 2010 2009 2008 1. Equipments for Electricity Generation and Distribution 146.99 676.00 516.18 581.44 2. Aircrafts 146.01 219.92 205.74 214.73 3. Chassis, motors and auto components 135.49 491.72 107.25 243.14 4. Machines 95.06 558.45 454.18 581.00 5. Measurement and control products 77.38 397.90 345.29 344.48 6. Bearings, Gears, Power Drive elements 60.29 372.31 277.76 439.56 7. Chemical Primary Products (not mentioned elsewhere) 55.96 335.49 262.06 277.47 8. Machine Tools 50.70 309.97 394.82 393.19 9. Machines for Textile, Garments and Leather Industries 40.14 219.25 187.53 251.42 10. Pumps and Compressors 37.89 314,01 219.92 205.74 Total Indian Imports 1790.0 9,250.0 7,990.0 8,150.0 India s exports of (i) Chemical Primary Products (ii) Iron Sheets and Metal Goods and (iii) Pharmaceutical products have shown growth rates of 22.4%, 11.9% and 11.8% respectively during Jan.-Feb.. Indian exports of Cotton Garments have declined by 8.3%. 8

(xi) Investments: German investment interests in India a) German engineering and services provider Bilfinger Berger plans to invest nearly Rs 600 crore in the next few years and is looking for strategic acquisitions to expand its business in India. The acquisition of Neo Structo Construction and Spetech Plant Equipments ("Neo Structo") represents an initial milestone in the German company's objective of strengthening its commitment in Asia. The company views India as a market with immense growth potential driven especially by the petrochemical and chemical industries. The company acquired the engineering specialist Tebodin in early. The company has been operating in Chennai since 2007. b) Hinduja Energy India Ltd has announced a joint venture with German energy major STEAG's subsidiary STEAG Energy Services (India) Pvt Ltd for setting up 10,000 MW power plants with an investment of $12-14 billion during the next eight years. Besides operating the Visakhapatnam plant of Hinduja National Power Corporation Ltd (HNPCL), the joint venture will carry out operations and maintenance activities of new power projects in India. HNPCL's 1,040 MW thermal coal-based power plant is now in advanced stages of construction and would be ready for commissioning in 2013. The group has announced its ambitious investment plans to set up 10,000 MW of generation assets over the next 7-8 years with an expected investment of around $12-14 billion. STEAG has also acquired a 5 per cent stake in HNPCL through its subsidiary STEAG Energy Services GmbH at an undisclosed amount and will have the option to invest in future power projects developed by the group. STEAG will be an important technology partner for the Hinduja Group and can be a preferred partner in new power projects of the group. c) Deutsche Post DHL has bought out the remaining 24% stake in its Indian joint venture from its partner, logistics company Lemuir Group. The acquisition would give DHL full control of the firm, which is set to be renamed DHL Logistics Pvt Ltd. DHL and its heritage organisations have shared a long and fruitful association with the Lemuir Group for over 30 years through agency and joint ventures. The company s stake buyout would build further on the company s position in international freight forwarding, supply chain management and customs brokerage services in India. As it looks for growth in the Indian freight market, DHL is already in the process of expanding its freight network in India with plans to increase the number of its retail centres in the country from around 400 to 1,000 in the next three to five years. d) In a first-of-its kind initiative, a bilateral agreement between India and Germany has led to a product launch in the home appliances segment. Godrej Appliances has launched Godrej-EON Green Balance, range of five star air conditioners, which is an outcome of a bilateral treaty between both the countries. Green Balance is an initiative by the Ministry of Environment in 9

India and its counter part working through German Agency of International Cooperation. The agreement was signed after the Montreal Protocol. This model exceeds 5 star range energy saving rating specified by the Bureau of Energy Efficiency (BEE) this year but is also above the ratings specified for 2016 standards. Rs 50 crore has been invested and the firm is looking to sell about 50,000 units in. e) Chemetall-Rai, a member of the Chemetall Surface Treatment Group, has invested in a second production facility in India. The design and construction of this new plant set new benchmarks in safety and quality, while responding to the increasing demand for local sourcing in this growing region. Chemetall, the global metal surface treatment company, has invested in a new state-of-the-art production plant in Chennai for its global customers located in the region. The new facility will enhance Chemetall- Rai s current capacity substantially. To keep pace with the growth dynamics of the Indian market, the company has built its new facility in Chennai. The company has acquired the chemical business of Gramos, one of the major local players of surface treatment technology for the Indian automotive industry. Chemetall is following its strategy to provide state-of-the-art quality technologies as well as local support for global customers. f) Gerresheimer AG, one of the world s leading partners of the pharma and healthcare industry, has acquired a majority shareholding (70%) in Indian company Neutral Glass & Allied Industries Pvt. Ltd. The company views that local production operations in the emerging markets like India is strategically significant for Gerresheimer as pharma sector is witnessing a rapid growth. Gerresheimer already has five plants in South America, seven in China and representative offices in Moscow and Mumbai, providing it with a strong presence in the emerging markets. g) Architectural mesh manufacturer GKD has established a new subsidiary GKD India Ltd. in Jaipur. It was founded as a joint venture with the Indian weave manufacturer WMW Metal Fabrics, covering all four business areas of the German parent company. GKD has a majority holding in the Indian joint venture. (xii) Trade Enquiries Total No. of Trade Enquiries from India : 21 Total No. of Trade Enquiries from Germany : 191 (incl. telephonic enquiries) 10

(xiv) Delegations a) Visit of Dr. Peter Ramsauer, Federal German Minister for Transport, Building and Urban Development to India (April 9 14, ) Dr. Peter Ramsauer led a high profile business delegation to New Delhi, Kolkata and Mumbai from 9th to 14th April. Dr. Ramsauer met Mr. Ajit Singh, Minister for Civil Aviation, Mr. Kamal Nath, Minister of Urban Development, Mr. Mukul Roy, Minister of Railways and Mr. Praful Patel, Minister of Heavy Industries & Public Enterprises. A Joint Declaration in the field of Sustainable Urban Development was signed between Mr Kamal Nath, Minister of Urban Development and Dr. Peter Ramsauer, German Minister for Transport, Building and Urban Development in New Delhi on April 9,. b) Visit of Dr. Sudhir Krishna, Secretary, Ministry of Urban Development to Germany (April 26-27, ) Dr. Sudhir Krishna, Secretary, Urban Development visited Germany from April 26-27,. He was the key note speaker at the Metropolitan Solutions held on April 25, in the Hannover Industrial Fair. Dr. Krishna also met (i) Mr. Jan Mücke, Parliamentary State Secretary, Federal Ministry of Transport, Building and Urban Development (BMVBS) (ii) Dr. Veiet Steinle, Head of Environmental Policy, Infrastructure and Policy Issues in BMVBS (iii) Mr. Jürgen Ross, Head of Dept. (Planning & Passenger Information) of Verkehrsverbund Berlin Brandenburg (VBB) (iv) Mr. Norbert Kuna, Head of International Relations in Deutsche Bahn and (v) officials of Berliner Verkehrsbetriebe (BVG) which was followed by field visits to model transport station of Alexanderplatz. The meetings were held in the context of the work initiated by Ministry of Urban Development on Planning for Regional Rapid Transit System for the National Capital of Delhi and its integration with the Delhi Metro. (xv) Other Promotional Activities & Meetings: a) Ambassador interacted with participants of Post Graduate Programme in International Management from the Management Development Institute (MDI) on April 18,. The group of Indian managers mainly represented the aviation and energy sectors. b) Publicity of Trade Fairs in India The Commercial Section gave wide publicity among the German industry associations, business federations, Chambers of Commerce on the following trade fairs/events and encouraged German participation in these events: OIL SPILL India (OSI ), International Conference and 11

Exhibition, September 13-15, at Holiday Inn Resort, Goa May 8, Global Investors Meet (GIM), Bangalore on 7 th & 8 th June *** 12

Annexure GERMANY S FOREIGN TRADE FOR JAN.- FEB. (Euro bn.) Feb. Jan. to Feb. Jan. Feb. Jan. to Feb. 2011 German Exports 91.3 177.3 86.0 84.1 162. German Imports 76.5 149.3 72.8 72.1 140.7 Trade Balance 14.7 27.9 13.2 11.9 22.0 Item Feb. Group of Countries Jan. to Feb. Feb. 2011 % change Jan. to Feb.2011 Euro bn. % German Exports 91.3 177.3 8.6 8.9 Including EU-countries 53.4 104.4 5.4 5.4 Eurozone 35.4 69.7 3.3 4.0 Non-Eurozone 18.0 34.7 9.7 8.5 Third Countries 37.9 72.9 13.4 14.4 German Imports 76.5 149.3 6.1 6.2 Including EU-Countries 48.7 93.6 6.6 6.9 Eurozone 34.1 65.5 5.5 6.3 Non-Eurozone 14.6 28.1 9.3 8.6 Third Countries 27.8 55.8 5.2 4.9 **** 13