The world's largest democracy as a lucrative alternative to China

The time has come: the Museum of Art and Photography, MAP for short, is opening in Bangalore these days. In the cube-like building, family entrepreneur and art collector Abhishek Poddar wants to bring contemporary works by South Asian artists closer to visitors. The MAP, the completion of which was delayed several times not least because of the corona pandemic, is considered one of the most spectacular museum openings this year - worldwide.

The opening comes at the right time, one could say. It not only suits modern Bangalore with its many tech companies. It also fits with India's new role as an important geostrategic partner of Europe and America in Asia – and as Asia's growth engine. That makes the country a place of longing.

This is reflected in unprecedented travel by German politicians. A delegation from the Bundestag's important Budget Committee has just been to the subcontinent, next Thursday Finance Minister Christian Lindner (FDP) is coming to the G-20 finance ministers' meeting in Bangalore, and at the weekend Chancellor Olaf Scholz (SPD) will travel to the capital New Delhi , then he will also go to Bangalore.

India is needed, also by Germany. More than ever, the West needs a strong partner in Asia if it wants to counter Russia and China. Prime Minister Narendra Modi knows that. He and his government are believed to play a mediating role in the Ukraine war.

After all, he played a neutral role after the Russian attack. In addition to arms, India continues to obtain oil and gas from Russia. But there are also established connections to the West. Years ago, Modi concluded a defense pact with the United States and thus secured state-of-the-art US armaments for his country.

It's this position between the blocks that Modi is looking to further develop to his advantage. His first presidency within the group of the 20 most important industrialized and emerging countries, the G20, is just right for him.

The Presidency will ensure that high-level Heads of State and Government visits continue throughout the year. This not only helps him politically, but also economically. After all, it is important to keep up the flow of foreign capital into the country for further investments and thus more prosperity for the billions of people, preferably to increase it.

Recently, the distrust of foreign investors has grown. On the one hand there was the struggling Adani group, which includes construction companies, airports and power plants. After allegations of fraud were raised by American short sellers, the stock market value fell by more than 100 billion dollars within a few days.

Founder Gautam Adani, who denied the allegations, lost his place as the second richest person in the world. European financiers had also made billions available to the company.

The day-long searches of BBC offices in Delhi and Mumbai by Indian tax authorities also recently caused irritation. The opposition in the country pointed out that the raids came shortly after a critical BBC documentary aired in January about the prime minister and his dealings with the country's Muslim minority. Government sides rejected this and reminded that the tax laws also apply to a media organization.

That doesn't change anything about the basic attractiveness of the country. The International Monetary Fund (IMF) expects economic growth of 6.1 percent for this year and even 6.8 percent next year. No other major economy is credited with growing faster.

India is already the fifth largest economy in the world and has just overtaken the former colonial power Great Britain. And the next overtaking maneuver is not far away: it will hit Germany. According to the IMF forecasts, India will pass by in 2025.

The desire to expand economic relations with the world's largest democracy is also great in Germany. After all, after the experience with Russia, it is important to reduce dependence on autocratic China. There is still room for improvement.

On the list of Germany's main trading partners, India is only 22nd for exports and 24th for imports. Goods worth around 15 billion euros were sent back and forth between the countries in 2022.

From the point of view of Stefan Halusa, head of the Indo-German Chamber of Commerce in Mumbai, this can be built on. “The starting point for deepening economic relations between Germany and India is good. Because there is no one-sided dependency, the trade balance is fairly balanced,” he says.

Halusa sees the greatest potential for German companies in the chemical, pharmaceutical/medical technology, automotive and mechanical engineering sectors. In addition, there is the area of ​​logistics and infrastructure. "The Indian state has just increased the budget for the construction of airports, highways and railway lines by 30 percent," he says.

Wages are still low, although not as low as they used to be. “Especially in the software capital of Bangalore, there is intense competition for well-trained workers. Many German companies, such as SAP, Continental, Bosch and Mercedes, also have large development teams there,” says Halusa. From his point of view, a negative location factor is, in addition to the inadequate infrastructure, the bureaucracy in the country.

He also says that to German entrepreneurs. He cannot yet see a mass relocation of production capacities from China to India. "What we are seeing more and more is that German companies are building up additional capacities in India," he explains. So the longing increases there too.