According to Sanjay Budhia, chairman of the CII Committee on EXIM, the German economy is currently experiencing a recession, which is anticipated to have an influence on India’s exports to Germany in a variety of industries, including chemicals, machinery, garments, and electronics.However, he claimed that it is still too early to determine how the economic downturn in Germany will affect India’s exports.
Germany, the fourth-largest economy in the world, is in recession as a result of a 0.5% loss in GDP in the fourth quarter of last year and a 0.3% decline in the first quarter of 2023.
4.4% of India’s total exports to Germany in 2022 were made up primarily of commodities from the organic chemical, machinery, electronics, apparel, footwear, iron and steel, and leather goods industries.Although it’s excessive It’s too soon to tell how the recession in Germany will influence India’s exports, but the aforementioned industries will probably be the ones that suffer the most, he told PTI.
He claimed that the recession that has affected Germany for two consecutive quarters is being felt throughout the entire European Union as a result of increased energy prices.
The EU will undoubtedly see contractionary pressures as a whole if its largest economy experiences a recession. Germany is the main destination for Indian exports, followed by the Netherlands, Belgium, Italy, and France, accounting for almost 14% of all exports from India to the EU, he continued.
He cited a paper in which the think tank Global Trade Research Initiative (GTRI) predicted that the recession would have an effect on India’s USD 2 billion worth of exports. billion, including products like smartphones, apparel, footwear and leather goods.
On investments from Germany, he said that a recession in the European nation might have an impact on its investments in India. However, it is likely that German companies may seek cheaper alternatives during recessionary conditions.