3rd Local Business Advisory Council

On 2 September 2020, the 3rd Meeting of the Local Business Advisory Council took place within the framework of the Indo-German Energy Day. Participants were German companies from the wind, solar and bioenergy sector, Indo-German German Chamber of Commerce (IGCC/AHK Indien),  Renewable Energy associations as well as representatives of the German Embassy in New Delhi, the Federal Ministry for Economic Affairs and Energy (BMWi), GIZ, KfW and the IGEF-SO. German companies welcomed that the Government of India increased its ambitions for Renewable Energy capacity additions to 450 Gigawatt (GW) of Renewable Energy capacity grid connected by 2030. German companies have repeatedly praised the past development and these ambitious targets. However, certain issues were addressed to enable further sustainable, long-term growth and successful German industry participation.

  • High impact of COVID-19 in the short term. Lockdown-induced economic slowdown for India so far has been stronger than expected. The COVID-19 recovery may take longer than anticipated but COVID-19 is not seen as a major issue in the long run.
  • A tendency towards more protectionism is observed. While some good experiences with localisation or self-reliance have been made in India, concerns have been raised especially from German business associations and German Embassy that protectionism will harm the Indian economy in the long run. The past has shown that required foreign investments are mainly made based on free trade assumptions combined with increasing local demand. Some German companies could face unexpected risks such as in public procurement with the exclusion of imports from foreign companies.
  • Some German companies see the present drive for localisation as a chance for manufacturing in India for German machines to replace imports from certain Asian countries.
  • Lack of coordination between State and Central Govt. has been observed which makes it often difficult for German companies to come to clear conclusions and make relevant business decisions.
  • Clear long term regular frameworks are required. A tendency of policy overdrive with changes in existing regulation and retrospective amendments are still being observed and may lead to confusion for long term investors.
  • Less bureaucratic simpler tender processes are requested. Especially public tenders are considered as complicated, shying away potential foreign bidders.