openPR Logo
Press release

Indian Multinationals Buoyant on Germany

Market Size and Technological Prowess Boost Germany’s Attractiveness for Foreign Direct Investments from India -

Hamburg (28.01.2009): Germany has become a major focal point for Indian multinational enterprises (MNEs) in their spirited pursuit of growth opportunities overseas. In 2008, Indian firms invested an estimated amount of $ 2 billion in Germany, up from $ 825 million in 2007 and $ 850 million in 2006. Sixteen (16) mergers and acquisition (M&A) deals involving Indian firms in Germany were monitored in 2008, up from 7 in 2007 and 11 in 2006. The deals also involved a substantial increase in the average deal value over past few years. A study conducted by the Institute of Technology and Innovation Management (TIM) at Hamburg University of Technology (TUHH) in Germany has now identified “proximity to customers” and “access to technology” as major drivers for this trend.

Of late, Indian firms have been venturing abroad in a big way. According to official statistics, India’s overseas FDI stock nearly quintupled from $ 10 billion in March 2005 to $ 46 billion in March 2008. In contrast, just a decade back in March 1997 India’s overseas FDI stock stood at a meager $ 617 million. Rajnish Tiwari, who led the study at TIM/TUHH, estimates the stock of Indian FDI in Germany at over $ 4 billion. With spectacular deals like that of Suzlon/REpower, Indian FDI has surpassed Germany’s FDI stock in India officially reported at $ 2.3 billion. In fact, Indian MNEs – between May 2004 and June 2007 – were the largest single investor group in Germany from emerging countries, as a Deloitte study (2007) suggested. Between 2001 and 2006 Indian MNEs were involved in 32 M&A deals in Germany. In contrast only 21 M&A deals in this period in Germany involved Chinese MNEs.

“Germany has become a key destination for Indian investments”, emphasizes Prof. Cornelius Herstatt, Director of TIM/TUHH, who has been closely monitoring recent Indo-German business developments. “So far there had not been any serious academic research on Indian investments in Germany, especially on its motives, experiences, and employment effects on the local economy”, says Prof. Herstatt, whose institute has launched a research project called “Global Innovation” with a strong focus on India. TIM/TUHH is one of the only few academic institutions in Germany that engage in academic research on business and economic issues related to India. “German academic research has traditionally focused on issues related to language, culture and socio-political themes, as far as India is concerned”, says Prof. Herstatt stressing the need for a new focus on Indo-German business context.

The study “The Emergence of Indian Multinationals: An Empirical Study of Motives, Status-quo and Trends of Indian Investments in Germany” was conducted by an extensive data research and an empirical survey of Indian subsidiaries in Germany. The study, presumably the only empirical study of Indian firms overseas so far, provides unique insights into the motives, operations, experiences, and future plans of Indian firms. The research, carried out by Rajnish Tiwari and Jayachandran K. Mani, was focused on corporate investments from firms headquartered in India. The study has identified 123 Indian MNEs and their 167 subsidiaries in Germany, excluding minority stakes and holding companies. The “Indian” firms employ approx. 20 000 full-time employees in Germany on an annual average. Additionally, they provide vocational training to about 1000 apprentices.

All known Indian firms in Germany were invited to participate in the survey. Twenty one (21) firms (17% of the total population) participated in the empirical survey. The respondents belonged to top management. “Proximity to customers” and “access to technology” were most-often cited reasons for investments in Germany. Selection of investment locations was in many instances “accidental” as firms decided to play it safe and preferred brownfield investment (acquisitions) as their mode of entry. The firms quite often also faced significant challenges in their day-to-day operations. “Differences in work culture”, “language problems” and “high operational costs” posed major challenges. Especially IT sector firms – with a larger number of expatriates – also complained about cumbersome visa and work-permit procedures.

The survey however also revealed that most Indian firms were doing well in Germany and had been able to grow both in terms of turn-over and headcount in recent years. “Most Indian firms in Germany are quite satisfied with the overall progress”, confirms Rajnish Tiwari citing it as a reason for the flurry of Indian investments in Germany. “India has become a key source of ‘Emerging Market’ FDI in Germany without being reflected in the official statistics”, says Tiwari. The discrepancy in the monitored actual investments and the official data is explained by the study authors Tiwari and Mani as resulting from the practice of Indian MNEs using their already established European or other foreign-based subsidiaries for expansion deals in Germany.

The study is optimistic on the outlook of Indian investments in Germany in 2009. “The present financial crisis is not going to subdue Indian FDI in Germany”, asserts Tiwari and cites the recent Visiocorp deal to make his point. On 2nd January 2009 Indian auto component maker, Motherson Sumi Systems Ltd, announced the buy out of Visiocorp (annual turn-over € 700 million) with four subsidiaries in Germany, including: Visiocorp Automotive GmbH (Wolfsburg/Hattorf) and Visiocorp Group Services GmbH (Stuttgart). More recently on 13th January 2009, India’s IT major Infosys, armed with $1.9 billion in cash and cash equivalents, announced that it was looking for acquisition targets in consulting and ERP space in continental Europe.

“Indian MNEs have just begun to discover Germany”, summarizes Prof. Herstatt, “there is still a huge untapped potential for mutual cooperation”.

For downloading study results visit:

'Research Project Global Innovation' (RPGI) is a project of the Institute of Technology and Innovation Management (TIM) at Hamburg University of Technology, also known as Technical University Hamburg-Harburg (TUHH).

The TUHH is one of the youngest universities in Germany as well as one of the most successful. Between 1982 and today an attractive architectural ensemble was created on the TUHH campus in the south of Hamburg. The campus, with its modern buildings, fits most naturally into the surrounding parkland. With the combination of beauty and function the university has become a landmark in city-planning. For further information see:

The Instiute for Technology and Innovation Management at the Hamburg University of Technology (TUHH) was founded in 1998 and is headed by Prof. Cornelius Herstatt PhD, MBA. Prof. Herstatt has worked for many years in managerial positions in both Industry and Consulting. Before joining TUHH, he was teaching at the University of Zurich and St. Gall (Switzerland). The department is still in the building-up phase, and we cooperate with a number of research institutes in and outside of Germany as well as with a number of companies and federal/private institutions. For further information see:

Dipl.-Kfm. Rajnish Tiwari
Research Project Global Innovation
Institute of Technology and Innovation Management
Hamburg University of Technology (TUHH)
Schwarzenbergstr. 95
D-21073 Hamburg, Germany

Tel.: +49 – (0)40 – 428 78 – 3776
Fax: +49 – (0)40 – 428 78 – 2867

This release was published on openPR.

Permanent link to this press release:

Please set a link in the press area of your homepage to this press release on openPR. openPR disclaims liability for any content contained in this release.

You can edit or delete your press release Indian Multinationals Buoyant on Germany here

News-ID: 66321 • Views: 1872

More Releases from Research Project Global Innovation, TU Hamburg-Harburg

Invitation to Join Research on Chances & Challenges of Offshore R&D in India
Hamburg (19.06.2007): Currently, a strong trend of internationalization of innovation (\"global innovation\") can be observed over many countries participating in the global economy. This tendency is reflected in the increasing number of offshore research and development (R&D) centres located in emerging economies such as China and India. Whereas global innovation was until recently limited to multinational corporations (MNCs), an increasing number of small and medium-sized enterprises (SMEs) is following this
Hamburg-based Study to investigate chances & challenges of 'offshoring' R&D to I …
Hamburg (12.01.2007): One of the most prominent features of globalization has come to be known as Business Process Outsourcing (BPO), whereby firms outsource their routine, standardized activities to an outside firm that usually enjoys cost advantages e.g. on account of specialization and/or location. A logical extension of this trend has resulted in Knowledge Process Outsourcing (KPO), whereby knowledge-intensive research & development work (R&D) is outsourced either to an outside firm
TU Hamburg-Harburg launches research project 'Global Innovation' to investigate …
Innovations are increasingly seen as a source of economic growth and as a useful instrument to face the competition brought about by the globalization. Not surprisingly, innovations have acquired a key-role in the growth and competition strategies of many firms, countries and economic regions. At the same time, a strong trend of internationalization of innovations may be observed across all countries actively participating in the global economy. This trend is

All 4 Releases

More Releases for India

Medical Tour India | Affordable Treatment In India
We at MedCredible look after the well being of the patients seeking treatment in India. Our support staff support is well trained in handling various situations arising due to cross border differences. All the patients can avail of high-quality treatment at an extremely affordable cost in a compassionate environment combined with ethical practices. With options of over 100 + Hospitals and Institutions, we at Medcredible ensure that we connect the
01-17-2011 | Health & Medicine
IVF India, Test Tube baby India
The aim of setting up KJIVF is to help infertile couples in achieving conception through modern diagnostic and treatment methods. KJIVF Centre has given the best results by blessing infertile couples of advanced age with children, these couples could never dream of becoming parents. Thousands of babies are conceived through in-vitro fertilization (IVF) each year; In-Vitro Fertilization (IVF) means fertilization outside the body. A baby developed from an egg that
Beach Holiday India- Best Beaches in India
The natural beauty, exotic locations and rich heritage has helped India to stand as the most visited and most popular tourist spot in the world. The status of “Incredible India”, is defined by an incredible range of nature’s blessings on the Indian subcontinent and this incredibility is doubled by one of the most fabulous tourism option available in the country that are the brilliant and majestic beaches in India.
ISO 27001 India, 27001 training India ISO
Coral eSecure is information Risk Management advisory with specific focus on Information Security (ISO 27001, ISO 17799, PCI, COBIT, HIPAA, GLBA, and DPA), Business Continuity (BS25999) and ITIL/ IT Service Management (ISO 20000). Coral is the FIRST Indian consulting organization which provides an Integrated Management System Consulting, Consisting of ISO 27001, ISO 20000 and BS25999 – ALL THREE IN ONE! Coral provides Consulting, Assurance audit and Training to address these
Interior Designers India, Designers and Architects India
Today, we have recognized ourselves as a booming beauty interior designing firm, offering services that include interior designing. We are a winning firm, which is based on the strong foundation of innovative and original ideas for interior, architectural and landscaping designing services. Synergy Corporate Interior Design Association has more corporate members. Who provide Products and services. We support Interior Designers India, Designers and Architects India. We are committed to the
Domain Registration India, Web Hosting India, Payment Gateway India is a Quality Web Hosting Company India, provide all web related support and Web hosting services like linux web hosting, windows web hosting, web hosting packages, domain registration in india, Corporate email solution, business email hosting, payment gateway integration, SSL with supports like free php, cgi, asp, free msaccess, free cdonts, free webmail, web based control panel, unlimited ftp access, unlimited data transfer. During the domain registration process, you will