berlin, Germany, the world’s fourth largest economy and Europe’s largest economy, is currently in recession. Because of this, the concern of many countries of the world including India has increased. The economic slowdown in Germany is likely to affect India’s exports to the European Union in sectors such as chemicals, machinery, apparel and electronics.
Sanjay Budhia, Chairman of the Committee on Export-Import of the Confederation of Indian Industry, has said this. He also said that it is too early to say how the economic slowdown in Germany will affect Indian exports. Germany’s GDP contracted for the second quarter in a row.
After a 0.5 percent decline in the fourth quarter of 2022, it fell by 0.3 percent in the first quarter of 2023. Technically a decline in two consecutive quarters is called a recession.
Budhiya said that Germany’s share in India’s total exports in 2022 was 4.4 percent. India mainly exports organic chemicals, machinery, electronics, garments, footwear, iron and steel and leather goods. While it is too early to assess the impact of the recession in Germany on India. The above mentioned areas may be affected the most.
He said that the entire economy is facing rising energy prices, which has led to two consecutive quarters of recession in Germany. If Germany slips into a recession, the impact could be felt across the US. He said that coal accounts for 14 percent of India’s total exports. Among these countries, the largest export from India is to Germany. It is followed by the Netherlands, Belgium, Italy and France.
Citing a report, Budhia said that according to the Global Trade Research Initiative, the slowdown in Germany could affect India’s exports of around $2 billion. This includes smartphones, apparel, footwear and leather goods.
Regarding Germany’s investment in India, he said that recession may affect it. If we look at the FDI figures from 2000 to 2022, Germany is at number nine. A total of 13.6 billion dollars has been invested from there during this period. It is mainly engaged in transportation, electrical equipment, metal sector, service sector, chemicals, construction activities, trading and automobiles.SS1MS