New Delhi, Oct 28 (IANS) India's decision to open its doors to foreign investment in multi-brand retail and other economic reform measures have created an attractive situation for foreign players, much like a "beauty contest", and German companies are keen on long-term strategic investments in India, the country's envoy has said.
The decision to allow multi-brand retail and also to attract foreign investment in pensions and insurance "are attractive for companies, and create a good psychological effect on them to invest further," German Ambassador Michael Steiner told IANS.
The opening up of the economy "has created a situation that is like a beauty contest.. It has led to a good investment climate.. This helps build investor trust and confidence," Steiner said.
The upcoming Asia-Pacific Conference (APK) of German Business Nov 1-3 in Gurgaon will see 800 CEOs of German companies arriving in India, said Steiner.
He said that German firms are looking for long-term strategic investment in India. German firms like Bosch and Siemens, which are household names in India, reinvest the money they earn. "German firms reinvest in India.. this is part of the long-term strategic approach, which is good for both," the envoy said.
"CEOs of firms like Siemens, Bosch and Volkswagen will discuss the prospective of economic engagement in Asia. And since it is being held in Gurgaon, it will be the perfect occasion to showcase India," he said, adding that senior German government officials would also be present.
The last APK was held in Singapore in 2010. "If it works, investment will be a huge boost," he added.
But the "mother of all boosters", according to Steiner, would be if the Free Trade Agreement (FTA) with the 27-member European Union works out. The FTA would open up a "highway" in every respect - "in economic relations, investment and trade", he said.
Germany has for long been pressing for concluding the FTA.
"If this is concluded, the message would be that India is open to outside investment from its largest trading partner," Steiner said.
With India opening up, the automatic effect would be that outside investment would come, according to the envoy.
The FTA would lay the ground for long-term investments and also add to investor confidence. "It is important for both," he said.
Inking of the FTA should not be hamstrung on "small issues", he stressed.
Steiner also said that the FTA should be finalized before the general elections due in 2014.
"We need to do it before (the 2014 election). It should be done early next year," he added.
The EU is India's largest trading partner, while India was the bloc's 8th largest trading partner in 2010. The total trade in 2010 increased by 28 percent to 67.78 billion euros (Indian exports of 32.99 billion euros/Indian imports of 34.79 billion euros) as compared to 2009. In the first eight months of 2011, trade between India and the EU grew at 23 percent, according to the Indian external affairs ministry.
(Ranjana Narayan can be contacted at firstname.lastname@example.org)