Mun/Com/201/1/2010

Monthly Economic and Commercial ReportCGI, Munich, Germany: July 2010

(Consular Jurisdiction: Bavaria & Baden-Wurttemberg)

Executive Summary

German GDP is expected to have grown faster in the 2nd quarter of 2010

Bavarian economy recovers from crisis

Baden-Wuerttemberg economy is expected to grow by 2% in 2010

Indo-Bavarian trade during Jan-May 2010 at € 770 million (8.91% change)

Indo-Baden-Wurttemberg trade Jan-May 2010 at € 887 million (22.68% change)

Indo-German trade during Jan-May 2010 at € 5.8 billion (12.81% change)

Meeting with executives of Siemens AG: July 1, 2010

Meeting at University of Hof regarding Bavaria-India Cooperation in Vocational Training: July 2, 2010

Meeting at Vocational Training School Landsberg: July 15, 2010

German-Indian Round Table (GIRT) Meeting at Roethenbach: July 6, 2010

“Indian Summer”, at Stuttgart: July 19-25, 2010

Indo-German Business Network (IGBN) Meeting: July 21, 2010

Meeting with executives of IHK Freiburg and Solar Company Mirroxx GmbH: Freiburg: July 23, 2010

Performance of Mercedes-Benz, BMW and Audi in India

Siemens India registers growth in third quarter

Siemens to build combined cycle power plants in Gujarat

Continuing success of ‘Bayern-Fit For Partnership’ programme of Bavarian Economic Ministry

Bavarian export booms

Continuous Growth in the number of SMEs in Baden-Wuerttemberg

Increase in Baden-Württemberg’s Industrial Order

I) Economic Outlook Germany

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

1

German GDP is expected to have grown faster in the 2 nd quarter of 2010

1. After registering a somewhat slow growth in the winter half-year 2009/2010, the German economy appears to have enjoyed solid growth in spring 2010. According to a report published by the German Economic Ministry in July 2010, the German GDP is expected to have grown at a faster rate in the second quarter of 2010 than in the first quarter. German GDP grew by 0.2 % in the 1st quarter of 2010, compared to the previous quarter. The current growth is the result of a sharp expansion in industrial output on the one hand and due to the better seasonal weather conditions on the other hand. German industry is benefiting from external economic stimuli as well as a revival in domestic investment activity. According to the report, overall industrial output rose sharply by 3.4%. Compared to the previous year, production continued to rise, particularly in industry (+13.7%) and also in the construction (+3.8%). Foreign trade once again marked strong growth, German exports in May 2010 rose by 9.2% and imports increased at an even faster pace (+14.8%). The economic recovery is also having an increasingly positive impact on the labour market. Unemployment declined substantially in June 2010.

Bavarian economy recovers from crisis

2. State Statistical office of Bavaria reported that the turnover of the manufacturing industry increased in May 2010 by 12.9 % compared to May last year. Out of the total turnover of €23.8 billion, 12.5 billion Euros were achieved through exports. The export share in May 2010 reached 52.5%. The number of incoming orders increased by 30.5% in the same period, out of which domestic orders increased by 36.6% and the foreign orders increased by 26.6%. However, the number of employees in the Bavarian manufacturing industries declined by 2.4% compared to previous year. Inflation rate in Bavaria was 1.2% in July, compared to previous year, the price for heating oil increased by 23.8%, food by 2.9% and petrol by 11.6%.

3. Bavarian Economic Minister Mr. Martin Zeil said that the results of the Ifo Bavarian Business Climate Index for the month of July 2010 is a further sign for the strong and continuing recovery of the Bavarian Economy. ‘The Bavarian business mood barometer has strongly increased in summer, the companies assess their actual business situation and the future business prospects noticeably better than it was in previous month, the economic upswing is speeding up and more and more industrial sectors are recovering’, commented Mr. Zeil. According to Mr. Zeil, Bavaria has faced the economic crisis well and is now better positioned for the future. The capacity utilisation of Bavarian manufacturing industry increased in July to 81% compared to 2009. Mr. Zeil has expressed optimism that the economic upswing will continue in the coming months. He added that many banks and economic institutes have recently revised their GDP forecast for Germany for 2010 upwards and now forecasts a GDP growth of 2.5 %. He mentioned that thanks to its strong export sector and innovative industry, Bavaria foresees at least the same percent growth like that of Germany. Mr. Zeil expects that by autumn this year the total number of unemployed persons in Bavaria will come down to less than 250000.

Baden-Wuerttemberg economy is expected to grow by 2% in 2010

4. The economy of the state of Baden-Wuerttemberg is also reviving, on the expected lines. According to the latest report published by the State Statistical Office, the economy is expected to grow by 2% in 2010, 0.5% more than it was predicted earlier after a decline by 7.4% in 2009. Industry is the growth motor for the expected better performance in 2010, with Industrial turnover increasing by 14% during the first half of the year. The foreign business of industry is the most decisive impulse generator for the expected economic growth. The exports increased in the 1 st

quarter of 2010 by 17% and in the 2nd quarter by 29%. Automobile industry performed particularly well, the turnover through exports increased during the initial months of the year by 60% compared

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

2

to the previous year. The machinery manufacturing sector also performed well, the foreign trade orders in this sector in the initial months increased by 36% compared to the same period of the previous year. However, the situation in the labour market is yet to improve. On an average over 1 million people were employed in the State industry in the first half of the year, this was 49200 fewer jobs, compared to the same period of the previous year. The unemployment rate in June was 4.7%. Given the dynamism that is resulting from the ongoing recovery of the global economy, exports are expected to see tangible growth in the coming months.

II) GDP Figures 2009

5. German Economy shrank by 5% in 2009. In value terms, GDP of Germany at current prices in 2009, amounted to Euro 2407 billion. The shrinking of German economy in 2009 had a direct bearing on the highly globalised States of Bavaria and Baden-Wuerttemberg. According to the German Statistical Office, the Bavarian GDP declined in the year 2009 by 5% and the GDP of Baden-Wuerttemberg declined by 7.4%. In value terms, GDP of Bavaria at current prices in 2009 amounted to Euro 429 billion and GDP of Baden-Wuerttemberg amounted to Euro 343 billion. Comparative GDP figures along with growth rates of Bavaria, Baden-Wuerttemberg and Germany are given below.

GDP Grwoth Rate2.9

1.6

-5

2.7

0.7

-7.4

2.51.3

-5-8

-6

-4

-2

0

2

4

Year 2007 Year 2008 Year 2009

Period

In %

Bavaria Baden-Wurttemberg Germany

GDP (at current prices)

434 445 429352 364 343

2423 2489 2407

0

500

1000

1500

2000

2500

3000

Year 2007 Year 2008 Year 2009

Period

In b

illio

n Eu

ros

Bavaria Baden-Wurttemberg Germany

III) Inflation rate

6. Inflation rate in Bavaria during July 2010 amounted to 1.2%, compared to July 2009. Compared to previous year, the price for heating oil increased by 23.8% and petrol by 11.6%. The Gas prices, however, decreased by 4.2%. The food price in July 2010 increased by 2.9% compared to July 2009.

7. Inflation rate in Baden-Wuerttemberg during July 2010 figured to 1.3%, compared to July 2009. Here again, the reason for the increase in inflation rate was the increase in heating oil (28%) and petrol (11.7%) prices.

Sr. No

States Inflation rate (% change over same period in previous year)

July 2009 July 20101 Bavaria -0.2 1.2

2 Baden-Wurttemberg -0.6 1.3

IV) Trade figures

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

3

Value in billion Euros & change in % over same period of previous year2008 %

Change2009 %

ChangeJan-May 2010

% Change

Bavarian Export 155 1.31 123 -20.65 55.5 14.2Bavarian import 129 4.88 109 -15.5 50.9 15.42Total Trade of Bavaria 284 2.9 232 -18.31 106.4 14.78

Export of Baden-Wuerttemberg 151 0.67 125 -17.22 59.2 20.57Import of Baden-Wuerttemberg 130 5.69 109 -16.15 50.1 10.84Total Trade of Baden-Wuerttemberg 281 2.93 234 -16.73 109.3 15.91

German Exports 994 2.58 807 -18.81 371.1 14.86German Imports 823 6.88 673 -18.23 311.2 12.18Total Trade of Germany 1817 4.49 1480 -18.55 682.3 13.62

V) Trade with 10 major Countries and India

The trade figures of Bavaria along with the rankings and value of trade for the year 2009 are given in tables below. The trade figures for Baden-Wurttemberg for the year 2008 are also given below. (*Figures of Baden-Wuerttemberg for 2009 are expected soon)

Bavarian Imports (In million Euro)Rank Country 2009 % Change

1 Austria 12126 -13.32 China 11373 -5.83 Italy 8540 -12.74 USA 7737 -15.55 Czech Republic 7452 -146 France 5636 -20.27 Russia 5533 -14.78 Netherlands 5418 09 Hungary 4049 -18.9

10 UK 3558 -19.6Total Imports 109943 -15.4

Bavarian Exports (In million Euro)Rank Country 2009 % Change

1 Austria 11938 -132 USA 11130 -25.23 Italy 10141 -18.84 France 10072 -13.25 UK 8556 -22.26 China 7800 4.17 Spain 4861 -26.38 Netherlands 4829 -11.19 Belgium 4481 -11.1

10 Switzerland 4315 -15.5  Total Exports 123991 -20.4

Baden-Wuerttemberg’s Imports(In million Euro)Rank Country 2008 % Change

1 USA 11461 0.32

2 France 11283 -0.423 Switzerland 10771 -3.664 Ireland 9966 2.055 Italy 9811 -9.96 China 6451 13.2

7 Netherlands 6450 23.148 Belgium 5366 9.91

9 Austria 5203 8.42

10 Czech Republic 4765 5.58  Total Imports 130293 5.18

Baden-Wuerttemberg’s Exports (In million Euro)

Rank Country 2008 % Change1 France 13802 2.032 USA 13230 -12.493 Netherlands 10654 6.264 Italy 10019 -4.785 Switzerland 9624 5.076 UK 9558 -8.017 Austria 8239 2.258 Spain 6603 -10.439 Belgium 6370 -8.53

10 China 6165 25.89  Total Exports 151229 0.46

VI) Indo-Bavarian/Baden-Wurttemberg/German Trade Consulate General of India, Widenmayer Strasse 15, Munich D-80538

e-mail: com.munich @mea.gov.in4

8. Indo-German trade continued to recover in the first five months of the year 2010. For the first time in 2010, Indian exports to Bavaria, Baden-Wuerttemberg and Germany also witnessed notable growth. During the period Jan-May 2010, Indian exports to Bavaria, increased by 8.17 % to €278 million, Indian exports to Baden-Wuerttemberg, increased by 6.14% to €311 million and Indian Export to Germany as whole, increased by 4.6% to €2.38 billion, compared to the same period of the previous year.

9. India’s total trade with the State of Bavaria increased during January-May 2010, by 8.91% to Euro 770 million compared to same period of the previous year. The two-way trade with Baden-Wuerttemberg also increased during January-May 2010 by a substantial 22.68% to Euro 887 million, compared to the same period of the previous year. Indo-German trade as a whole followed the growth trajectory during Jan-May 2010, marking a growth of 12.81% to Euro 5.89 billion, compared to the same period of the previous year.

Value in million Euros & change in % over same period of previous year2008 %

Change2009 %

ChangeJan-May 2010

% Change

Indian Exports to Bavaria 665 26.67 567 -14.74 278 8.17Indian Imports from Bavaria 1342 22 1132 -15.65 492 9.33Total Trade 2007 23.51 1699 -15.35 770 8.91

Indian Exports to Baden-Wuerttemberg

715 18.57 672 -6.01 311 6.14

Indian Imports from Baden-Wuerttemberg

1480 18.68 1210 -18.24 576 33.95

Total Trade 2195 18.65 1882 -14.26 887 22.68

Indian Exports to Germany 5252 11.25 5104 -2.82 2389 4.6Indian Imports form Germany 8154 10.88 7997 -1.93 3510 19.19Total Trade 13046 11.02 13101 -2.28 5899 12.81

Evolution of India's Trade With Bavaria

591 731954

1504

20071699

0

500

1000

1500

2000

2500

2000 2002 2004 2006 2008 2009

Year

Valu

e in

Mill

ion

Euro

s

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

5

Evolution of India's Trade With Baden-Wuerttemberg

663 753952

1591

21951882

0500

1000150020002500

2000 2002 2004 2006 2008 2009

Year

Valu

e in

Mill

ion

Euro

s

Evolution of India's Trade With Germany

4548 49656223

10539

13406 13101

0

5000

10000

15000

2000 2002 2004 2006 2008 2009

Year

Valu

e in

Mill

ion

Euro

s

Major 10 Indian Exports to Bavaria

    Year 2008% Change Year 2009

% Change

Sy.Co Product category Euro   Euro  

804Apparel of silk or man-made fibres, excl. Of knitted or crocheted fabrics 10955846 3.52 14791268 35.01

865Electronic valves and tubes and other electronic components 61388908 307.67 19654244 -67.98

734 Paints, varnishes and mastics 27525619 87.59 25607313 -6.97844 Bearings, gears, gearing and driving elements 55372613 66.37 27353014 -50.6809 Textile products n.e.s 29919424 19.74 27666243 -7.53

861Machinery & Apparatus for electricity production distribution and control 42066076 35.39 37527582 -10.79

806Apparel of cotton, excl. of knitted or crocheted fabrics 35668877 -5.82 37934123 6.35

803 Apparel of knitted or crocheted fabrics of cotton 40763835 -8.09 40910184 0.36811 Footwear 39605787 3.68 45589380 15.11

812Articles of leather and leather clothes (excl. footwear) 49282449 12.37 52540360 6.61

  Total Imports of Bavaria from India 665635707 26.83 567126214 -14.8

Major 10 Indian Imports from Bavaria Consulate General of India, Widenmayer Strasse 15, Munich D-80538

e-mail: com.munich @mea.gov.in6

    Year 2008% Change Year 2009

% Change

Sy.Co Product Category Euro   Euro  885 Automobiles 19923516 -19.06 33431234 67.8852 Machine Tools 62986420 -44.69 41987493 -33.34

872Measuring and automatic control instruments and appliances 47614508 16.45 43810370 -7.99

884Chassis, bodies, engines, parts and accessories for motor vehicles, etc 52263379 28.72 52919832 1.26

851 Machinery for working rubber or plastics 49300573 158.43 68455781 38.85

871Medical and surgical equipment and orthopaedic appliances 80465722 0.22 71158628 -11.57

859 Machinery, n.e.s 100990935 17.46 73074911 -27.64844 Bearings, gears, gearing and driving elements 115324687 16.37 74903212 -35.05891 Industrial plants 15333182 904.9 96995666 532.59

861Machinery and apparatus for electricity production, distri. & Cont. 197803780 50.08 150522287 -23.9

  Total Exports of Bavaria to India 1342130382 21.98 1132607686 -15.61

Major 10 Indian Exports to Baden-Wurttemberg

    Year 2008% Change Year 2009

% Change

Sy.Co Product category Euro   Euro  

864Television and radio receivers, sound or video recording or reproducing appar. & associated goods 25584607 28.37 20684670 -19.15

806 Apparel of cotton, excl. Of knitted or croche.fabrics 13030214 9.57 24618767 88.94

861Machinery & Apparatus for electricity production distribution and control 20501276 119.9 24889613 21.41

878 Jewellery, goldsmith's or silversmith's wares 36235104 -5.02 27397890 -24.39803 Apparel of knitted or crocheted fabrics of cotton 27808545 1.86 34259157 23.2812 Articles of leather and leather clothes (excl. footwear) 31012628 20.21 37066247 19.52

884Chassis, bodies, engines, parts & acce. for motor vehicle .etc 75098609 9.89 45092638 -39.96

740 Basic pharmaceutical products 54875359 30.81 47807316 -12.88829 Articles of metal, n.e.s 48704075 28.11 49472113 1.58885 Automobiles 64869424 313.8 70331529 8.42

  Total Imports of Baden-Wuerttemberg from India 715045442 18.42 672751487 -5.91

Major 10 Indian Imports from Baden-Wurttemberg

    Year 2008% Change Year 2009

% Change

Sy.Co Product category Euro   Euro  845 Lifting and handling equipment 69268991 131.96 33796880 -51.21

841Motors and engines (excl.engines for agri.tractors,aircraft,road vehicles) 80744367 111.73 33917289 -57.99

847 Machinery for Textile Apparel and leather Production 51004965 -38.85 35006947 -31.37

871Medical and surgical equipment and orthopaedic appliances 42798205 16.28 47134631 10.13

884Chassis, bodies, engines, parts and accessories for motor vehicles, etc 56730245 18.5 55875990 -1.51

854 Machinery for paper production and printing 107317463 129.05 72974135 -32

872Measuring and automatic control instruments and appliances 77076835 15.81 78387455 1.7

861Machinery and appara. for electricity production .distribution & Control 90613536 13.39 80150351 -11.55

859 Machinery, n.e.s 148434223 29.77 117713047 -20.7852 Machine Tools 161573025 20.88 127969000 -20.8

  Total Exports of Baden-Wuerttemberg to India 1480731072 18.69 1210790994 -18.23

VII) Five principal export commodities

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

7

Value in million Euros

(* Figures for Baden-Wuerttemberg for 2009 are expected soon)

VIII) Five principal import commoditiesValue in million Euros

S.No Name of Import Commodity

BavariaYear 2009

1. Motor Vehicles and parts

16272

2. Electrical products 171663. Machinery 116424. Chemicals &

Pharmaceuticals8656

5. Food industry 6218

Total Imports 123951

S.No Name of Import

Commodity Baden- WurttembergYear 2008

1. Chemicals 266332. Machinery 131993. Motor Vehicles and Parts 10948

4. Office Machines, fax, modem etc

7388

5. Iron & steel/ Non ferrous metals

8563

Total Imports 130293(* Figures for Baden-Wuerttemberg for 2009 are expected soon)

IX) Top 5 export and import items in India-Bavaria and India-Baden Wurttemberg trade

EXPORTS TO INDIA

Top export items of Bavaria to India - Year 2009

6%6%

7%

9%

13%

59%

Medical & surgicalequipment andorthopedic appliances

Machinery, n.e.s

Bearings, gears,gearing & drivingelements

Industrial plants

Machinery forelectricity production& distribution

Others

Top export items of Baden-Wuerttemberg to India. Year 2009

6%6%

7%

10%

11%

60%

Machinery for paperproduction & printing

Measuring & automaticcontrol instruments andappliances

Machinery forelectricity production &distribution

Machinery, n.e.s

Machine Tools

Others

IMPORTS FROM INDIA

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

8

S.No

Name of Export Commodity

Bavaria Year 2009

1. Motor Vehicles and Parts

37711

2. Machinery 20678

3. Electrical Products 140874. Chemicals &

Pharmaceuticals11450

5. Food Products 6574Total Exports 123991

S.No Name of Export Commodity

Baden- Wurttemberg Year 2008

1. Machinery 358162. Motor Vehicles and Parts 340673. Chemical Products 176304. Manufacture of equipment

for electricity generation and distribution, etc

8712

5. Medical , measuring control, regulating and optical products

8602

Total Exports 151229

Top Bavarian import items from India. Year 2009

7%7%

7%

8%

9%62%

Machinery forelectricity production& distributionApparel of cotton,excl. of knitted orcrocheted fabricsApparel of knitted orcrocheted fabrics ofcottonFootw ear

Articles of leather andleather clothes (excl.footw ear)Others

Top import items of Baden-Wuerttemberg from

India. Year 20096%

7%

7%

7%

10%63%

Articles of leather andleather clothes (excl.footw ear)

Chassis, engines,parts & acce. formotor vehicle

Basic pharmaceuticalproducts

Articles of metal,n.e.s

Automobiles

Others

X) India-Related Events

Meeting with executives of Siemens AG: July 1, 2010

10. Consul General met Mr. Stephan Schneider, Senior Vice President of Siemens AG, along with officials heading their India operations over dinner on July 1, 2010. Mr. Schenieder briefed Consul General on their operations in India and expressed satisfaction over the fact that their businesses in India had successfully faced the impact of the global economic crisis. Consul General underlined the longstanding business relations with Siemens and expressed hope that their engagement with India continues to grow in the coming years. The Siemens Group India, comprises 22 companies, operates in core business segments of industry, energy and healthcare. Siemens Group in India provides direct employment to over 17000 persons. Currently, the group has 18 manufacturing plants, a wide network of Sales and Service offices across the country as wells as over 500 channel partners.

Meeting at University of Hof regarding Bavaria-India Cooperation in Vocational Training: July 2, 2010

11. Consul General attended the consultation meeting on Indo-Bavarian cooperation in the area of vocational training hosted by the Bavarian-Indian Centre for Business and University Cooperation (BayIND) on July 2, 2010. Extensive deliberations on starting a pilot project on vocational training in India were discussed among senior representatives of PSG Institutions, Coimbatore (Shri C.R. Swaminathan, CEO and Dr. R. Nandagopal, Director), Bavarian Ministry of Education and Culture (Mr. Thomas Schlutsmeier), University of Applied Sciences, Hof (Prof. Dr. Stefan Wengler, Head of the Business Administration Department and Prof. Dr. Franz-Xaver Boos, Head of the Pubic Management Department), M/s GDW Werkzeugmaschinen  Herzogenaurach (Mr. Hermann F. Weiler, MD, Geedee Weiler Group).  From the BayIND, Prof. Dr. Juergen Lehmann, President and Dr. Daniel Werner, MD, attended. 

12. Prof. Boos and Mr. Schlutsmeier made interesting presentations on the dual system in Germany - its advantages, strengths and challenges.  They also offered all possible assistance in the BayIND’s endeavour for collaboration with the interested Indian institutions in this regard. Shri Swaminathan, CEO of PSG Institutions who also chairs CII Southern Region briefed the local participants about the growing needs of the Indian industry for appropriate skills and gave an overview of the existing system in India. Shri Swaminathan also recognized the evident strengths of the German system and saw merit in greater collaboration with Germany in this area. PSG Institutions Coimbatore has an existing cooperation MoU with BayIND for academic collaboration and Shri Swaminathan promised to explore the possibility of cooperating in vocational education with the Coimbatore-based textiles cluster.  They have agreed to conduct a survey of precise skill requirements with this cluster for the next 10 to 15 years and based on that develop a suitable

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

9

programme with the support of BayIND.  Mr. Weiler who does have some experience of skill development in India through his tool engineering training centre in Coimbatore has also offered assistance by way of sharing experience and expertise. 

Meeting at Vocational Training School Landsberg: July 15, 2010

13. With a view to have a better understanding on the functioning of the Bavarian vocational training schools, Consul General and Consul (PIC) visited the vocational training institute at Landsberg (Berufsschule Landsberg) on July 15, 2010. Mr. Oswald Kurr, head of the institute, introduced the courses conducted by vocational training school Landsberg and organized a visit to the class rooms/workshops of vocational training departments like Electronics for devices and systems Mechatronics and Motor vehicle mechatronics. The faculty and students updated the Consul General on their training projects. Mr. Thomas Schlutsmeier, Pedagogy Department, Bavarian Ministry of Education and Art also attended the meeting. Mr. Oswald Kurr in his presentation briefed Consul General on the functioning of the two schools viz, a technical secondary school and an upper technical school with a total of 1300 students getting trained at 40 different trades, trained by 70 teachers and 7 teacher trainees. The duration of the courses vary between 2 to 3.5 years. Mr. Kurr said that before developing the curriculum the school periodically checks with the relevant companies in the region/industry leaders/representatives of local Chambers of Commerce and Industry about the exact skill requirement of the local industry and then develop a curriculum which matches the requirement of the local industry. Mr. Kurr further spoke on the advantage and strength of the dual vocational training system and mentioned that the students attend theoretical/practical training at the school and focused practical training at the respective companies. Consul General spoke on the huge requirement of skilled employees in the coming years in India and expressed hope that the Indian vocational training system will ensure the involvement of companies/Industry so that the training schools could produce skilled trainees matching the exact requirement of the Indian Industry.

German-Indian Round Table (GIRT) Meeting at Roethenbach: July 6, 2010

14. The 3rd meeting of the German-Indian Round Table (GIRT) of the year 2010 was held at Diehl BGT Defence GmbH, Roethenbach, near Nuremberg on July 6, 2010. The meeting was attended by around 30 prominent business leaders from the region besides representatives from German Centre Delhi.Gurgaon, Bavarian Business Association (VBW) and Bavarian-Indian Centre for Business and University Cooperation (BayIND). In an interesting presentation, Mr. Claus Guenther, President Corporate Division Board of Diehl Defence dwelt on the activities of the Diehl Group with special focus on the products and services offered by Diehl Defence. He mentioned that Diehl Group has a liaison office in Bangalore and the company has a Joint Venture with Forge India Ltd and is currently in the process of setting up a presence in Delhi. Diehl Group, a family owned company since 1902, employs around 12150 people and generated sales of € 2.1 billion in 2009.

15. Mr. Atul Khanna, founder of Tooltech Global Engineering Pvt. Ltd based in Pune in his presentation ‘India Goes Global’, spoke on the growth story of Indian economy, the rapidly growing Indian manufacturing industry, increasing Indian outward investments, etc. The event also included a factory visit to the Diehl Defence facility. Copies of the latest publication ‘India Dynamic Business Partner: Investor Friendly Destination’, published by ITP Division, MEA were distributed among the participants. The event ended with a question and answer session followed by a reception.

“Indian Summer”, at Stuttgart: July 19-25, 2010

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

10

16. The week long annual event “Indian Summer”, formerly known as India week, was organised successfully in Stuttgart from 19-25 July 2010. The Federation of Indian Export Organisations (FIEO) organised an ‘Indian Village’ at the “Indian Summer”. Fourteen Indian companies participated in the Indian Village and showcased a wide range of products such as handicrafts, imitation jewellery, madeups, handmade fashion accessories, household items, leather goods, garments, perfumes, agro products, decorative items and crafts, etc. The FIEO Indian Village was a major attraction of “Indian Summer” celebrations. A meeting of the German-India Round Table (GIRT) Stuttgart was also conducted on July 21, 2010, on the sidelines of “Indian Summer” celebrations in Stuttgart. The GIRT meeting was attended by around 25 prominent businessmen from Stuttgart region. Ambassador of India to Germany, Shri Sudhir Vyas spoke at the GIRT meeting. Bollywood and Beyond the largest film festival of Indian films outside India continued to be the main attraction of ‘India Summer’ celebrations. This year’s selection of some 60 contemporary Indian films was impressive, representing both popular cinema in India and a wealth of documentaries on important themes.

Indo-German Business Network (IGBN) Meeting: July 21, 2010

17. The 4th meeting of the Indo-German Business Network (IGBN) was held on July 21, 2010, at ‘Royal India Restaurant’ in Munich. The meeting was attended by around 20 businessmen, representing German companies with business interests in India, representatives of Indian companies located in Bavaria and media. Mr. Karl Nestmeier, board director, Smiles AG gave a presentation on the electric car from India Reva i. Mr. Nestmeier informed that his company has entered into a deal with REVA Electric Car Company (RECC) Bangalore in 2009 for importing of Reva i cars in Germany and the first Reva i electric cars are expected on the German roads by end of this year. Smiles AG is one of the leading electro car manufacturers based in Bavaria and the company has a market share of 50% in Germany. Mr. Gunter Benthaus, CEO of Green Rent GmbH, the Bavaria based importer of Tata Cars in Germany spoke on their project to bring Tata Nano car to Germany. The event ended with a question-answer session.

Meeting with executives of IHK Freiburg and Solar Company Mirroxx GmbH: Freiburg: July 23, 2010

18. Consul General accompanied by Consul (PIC) visited Freiburg on July 23, 2010, to meet the executives of Freiburg Chamber of Commerce and Industry (IHK Freiburg). The focus of the visit was on the latest technologies/products being developed by the solar companies in Freiburg and to create awareness amongst the solar companies in the region about the upcoming business opportunities in India in connection with the Jawaharlal Nehru National Solar Mission. The programme at the Chamber included a presentation by Mr. Andreas Kempff, the CEO of IHK Freiburg on the activities of the Chamber and a presentation by Mr. Werner Reif, Executive Director, Environmental, Energy and Regional Planning Management, IHK Freiburg on the solar air-conditioning system installed at the Chamber. Mr. Kempff in his presentation mentioned that IHK Freiburg has 58,000 registered members and it ranks 17 amongst the leading Chambers in Germany. He said that the popular Fraunhofer Institutes for Solar Energy Systems (Fraunhofer ISE) who are engaged in the research and development of scientific and technological fundamentals for solar energy applications is also located at the Solar Info Center in Freiburg, which is home to 45 companies, dealing with solar technologies. Freiburg, located close to the French border in southwest Germany, has acquired a leading position in recent years in solar energy applications. The Solar Region Freiburg is a long term development vision that the city of Freiburg has embraced since 1986, which has contributed to the growth of the city as a centre of expertise.

19. A visit was organised to the solar company Mirroxx GmbH Freiburg, where Mr. Christian Zahler, Managing Director, Mirroxx GmbH, introduced their ongoing and upcoming projects and

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

11

the technology options provided by the company. Mirroxx is the world leader in solar Fresnel collector systems technology for on-site production of solar process heat which could be ideally suited for production processes in the food, textile industries, solar cooling, air-conditioning etc. Mr. Zahler argued that with around 300 days of clear sky, some of the regions in India offer optimum conditions for the Frensel Collector systems and his company has already started business discussions with Indian companies. Mr. Zahler gave a presentation of their roof-top Frensel Collector system which according to him has a life of approximately 20 years and a pay back period of ten years.

Performance of Mercedes-Benz, BMW and Audi in India: First half of 2010

20. Press reports indicate that the Bavaria and Baden-Wuerttemberg based automotive giants Mercedes Benz, BMW and Audi have clearly benefited from the worldwide recovery of the automotive industry, particularly from the increasing sales in India and China. During the first six months of the year 2010, the sales of Mercedes Benz India increased by 79% to 2402 vehicles, that of BMW India, subsidiary of the Munich based luxury car manufacturer, increased by 25% to 2183 vehicles and the sale of Audi India, subsidiary of the Ingolstadt (Bavaria) based Audi AG increased by 71% to a record of 1400 cars.

Siemens India registers growth in third quarter

21. Siemens India reported a substantial increase in sales by 17% in the third quarter ending June, 2010. Sales for the first nine months increased by 7%, driven by the divisions of the Industry and Healthcare Sectors as well as Distribution and Oil & Gas divisions of the Energy Sector. During the period, the company’s new orders are also reported to have increased by 52% over the same period in 2009. Siemens Ltd, in which Siemens AG holds 55.18% of the capital, is the flagship listed company of the Munich based engineering major Siemens AG in India. Siemens in India, which comprises 19 legal entities, is a leading provider of industry & infrastructure solutions with a business volume aggregating about Rs. 12,000 crore and the company operates in the core business areas of Industry, Energy and Healthcare. It has nation-wide Sales and Service network, 21 manufacturing plants, a network of around 500 channel partners and employs about 16,800 people.

Siemens to build combined cycle power plants in Gujarat

22. Siemens are reported to have won contracts for the turnkey construction of two combined cycle power plants, namely UNOSUGEN and DGEN by Torrent Power Ltd and Torrent Energy Ltd, respectively of the Ahmedabad based Torrent Group. According to reports, Siemens will erect the DGEN power plant, comprising three combined cycle units with a total installed capacity of 1200 MW in Dahej Special Economic Zone in Gujarat. The UNOSUGEN combined cycle plant will have an installed capacity of approximately 400 megawatts (MW) and will be built in the vicinity of the city of Surat in Gujarat. In addition to turnkey construction, Siemens Energy will also supply the main components for the two plants; gas turbines, steam turbines, generators, and the entire electrical and instrumentation & control systems. For Torrent, Siemens has already built the power plants Paguthan with a capacity of 655 MW and SUGEN with a capacity of 1150 MW. The Siemens Energy is the world’s leading supplier of a complete spectrum of products, services and solutions for the generation, transmission and distribution of power and for the extraction, conversion and transport of oil and gas.

XI) General Economic News

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

12

Continuing success of ‘Bayern-Fit For Partnership’ programme of Bavarian Economic Ministry

23. With 11 projects in the first half of the year 2010, ‘Bayern-Fit For Partnership’ programme enabled to support many Bavarian companies by their export activities and provided training to a number of leading international managers. ‘Bayern-Fit For Partnership’ programme of the Bavarian Economic Ministry provides opportunity to investors/companies to have insight into the technical solutions offered by number of Bavarian companies. Through the 11 projects in the first half of the year 2010, a total of 213 Bavarian companies met with 174 top executives representing various sectors such as environment, machinery and construction. Another 8 projects are planned for the second half of the year 2010, according to Mr. Martin Zeil, Bavarian Economic Minister.

24. ‘Bayern-Fit For Partnership’ is organised by the State supported business association ‘Bayern International’ on behalf of Bavarian Economic Ministry. The programme enables Bavarian companies to get in contact with potential business partners from abroad.

Bavarian export booms

25. Bavarian exports increased in April 2010 by 20% to Euro 11.5 billion (58% of the exports went into EU countries) and imports increased by 21.2% to Euro 10.5 billion. The total Bavarian exports during January-April 2010 amounted to €43.8 billion (+11.3%) and imports €39.7 billion (+11.2%). Major exporting goods in April 2010 were automobiles (Euro 2.3 billion), machineries (Euro 1.7 billion) and automobile components (Euro 842 million) whereas the major imports were crude oil and gases (Euro 1.5 billion), machineries (Euro 1 billion) and Electronic components (Euro 790 million). Bavarian foreign trade suffered heavy loss in 2009 when exports decreased by 20% to Euro 123 billion and imports decreased by 15% to Euro 109 billion.

Continuous Growth in the number of SMEs in Baden-Wuerttemberg

26. At the presentation of the SME report 2010, Mr. Stefan Mappus, Minister President of Baden-Wuerttemberg commented that the guarantee for the better economic performance of the State is its SME sector. During the period 2005 to 2009, a total of 7200 new Small and Medium Sized Enterprises with less than 500 employees (SMEs) were newly started in Baden-Wuerttemberg, according to the report published by the State Government in July 2010. The number of employees in SMEs increased by 105000 persons during the same period. The total number of SMEs in the State in 2009 amounted to 477153 whereas the total number of employees at these SMEs figured to 2.3 million people. The total turnover of SMEs amounted to 773 billion Euros; this was 57.9% of the total turnover generated in the State. According to the report, during the period 2005 to 2009, a total of 560 million Euros were spent for promotion of the SME sector.

Increase in Baden-Württemberg’s Industrial Order

27. The demand for industrial goods from the export giant Baden-Wuerttemberg is reported to have increased in 2010. During the first half of the year 2010, the orders for industrial goods in the State increased by 29%, wherein the domestic orders increased by 22.5% and the foreign orders increased by 34.5%. Almost all major industrial sectors in the State received increasing orders during January-June, the industrial orders in electronic industry increased by 35%, the electrical industry by 33.5%, automotive industry by 33%, the metal processing industry by 32.5% and the machinery manufacturing industry by 30%.

XII) Publicity of Trade Fairs/Events Conducted in India

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

13

28. During the month, CGI Munich gave wide publicity among the German industrial associations, business federations and chambers of commerce & industry to the following trade fairs/events in India to encourage German participation:

A. INDIASOFT 2011- 11th annual global IT event (www.indiasoft.org). Organised by the Electronics and Computer Software Export Promotion Council (ESC), India. Scheduled to be held at Pune, from March 25-26, 2010.

B. CONNECT 2010-10th edition of India’s premier Information and Communication Technology annual Conference and Exhibition (www.ciiconnect.com). Organised by Confederation of Indian Industry (CII) and Government of Tamil Nadu. Scheduled to be held on 8th and 9th September 2010 at Chennai Trade Center, Chennai.

C. Madhya Pradesh-Global Investors Summit-II (http://www.mptrifac.org/Khajuraho.htm). Organised by the State of Madhya Pradesh. Scheduled to be held from October 22-23, 2010, at Khajuraho, Madhya Pradesh.

29. The report issues with the approval of Consul General.

(Dr. Binoy George)Consul (PIC)

August 25, 2010

Consulate General of India, Widenmayer Strasse 15, Munich D-80538e-mail: com.munich @mea.gov.in

14