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German companies are increasingly considering India as a base for manufacturing, engineering, research and development, and innovation—not only as a market for finished products, according to India’s Commerce and Industry Minister Piyush Goyal. Speaking after a two-day visit to Berlin on 24 October 2026, Goyal said discussions with Siemens Healthcare, Bertelsmann Investment, Volkswagen and Skoda pointed to a broader partnership model. He attributed the shift to German industry’s need to reduce costs and improve global competitiveness, combined with India’s engineering talent, existing global capability centres and potential for local co-development.
Why are German companies looking beyond selling products in India?
Goyal said German chief executives now describe India as a strategic partner and operating base. The proposed relationship goes beyond importing products or building sales offices: companies could manufacture in India, locate engineering and design teams there, and develop products jointly with Indian businesses and research institutions.
“The CEOs echoed one message – German companies no longer see India only as a market, but as their partner, as a base for manufacturing, for research and development, for innovation,” Goyal said, according to PTI’s account of his remarks.
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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesThe minister linked the change to a cost and competitiveness problem facing German industry. “Today the greatest imperative before German industry is to cut costs and become more competitive in global markets,” he said. India offers a large technical workforce and an established ecosystem in which multinational companies already run engineering, software and business operations.
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How large is the existing German and global capability-centre footprint?
Goyal said about 2,000 German companies currently operate in India. That figure is his estimate as reported by PTI; the report did not independently audit the count or provide company-level investment totals.
He also said India has more than 2,100 global capability centres (GCCs) employing millions of people. According to his description, individual centres range from a few hundred staff to several lakh employees. GCCs can provide a ready platform for German firms that want to add product engineering, analytics, software, design or research work rather than establish every capability from scratch.
Neither the PTI reports nor Goyal’s remarks provide an independently verified total for German hiring, capital expenditure or research spending in India.
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Are German firms planning to expand their Indian operations?
Goyal said most of the companies he discussed were planning to double or triple their Indian operations over the next two to five years. This is a ministerial account of company intentions, not a verified forecast. No company-by-company schedules, project values or hiring commitments were disclosed in the reported remarks.
If those plans materialise, expansion could include additional factories, supplier networks, engineering teams and innovation centres. The practical outcome will depend on each company’s investment approvals, demand forecasts, local partnerships, infrastructure and regulatory execution.
What would the India–Germany partnership model include?
Goyal described a model built around several linked activities rather than a single factory project:
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- Manufacturing: production in India for domestic and international supply chains.
- Research and development: engineering, testing and applied research carried out by Indian teams.
- Innovation: development of new products, processes and digital systems.
- Co-design and co-development: German and Indian teams sharing product design and engineering work.
- Co-manufacturing: combining German industrial know-how with Indian production capacity and suppliers.
- Talent mobility: moving specialist employees and knowledge between the two countries.
- Research partnerships: inviting German research institutes to work with Indian institutions and companies.
Goyal said existing GCCs could serve as a foundation for innovation and design activity. His policy argument is that German precision and research capabilities, combined with Indian skills and talent, could strengthen India’s position in future manufacturing and innovation. That remains a stated policy case rather than an independent assessment of outcomes.
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Companies evaluating India would weigh several factors together instead of relying on labour costs alone:
| Decision factor | Why it matters to German companies |
|---|---|
| Manufacturing cost and competitiveness | Lower operating costs can help German businesses compete in global markets, provided quality, logistics and reliability meet requirements. |
| Engineering and innovation talent | India’s large technical workforce can support software, product engineering, design and research teams. |
| GCC and R&D infrastructure | More than 2,100 GCCs, according to Goyal, indicate an existing base of facilities, suppliers and management experience. |
| Co-development with local partners | Indian companies and institutes can contribute market knowledge, engineering capacity and manufacturing networks. |
| Trade-policy access | A proposed India–EU trade agreement could affect tariffs, market access and the economics of serving European customers from India. |
| Climate compliance | EU climate rules, including the Carbon Border Adjustment Mechanism (CBAM), may change reporting obligations and costs for carbon-intensive exports. |
What could the proposed India–EU FTA mean for German manufacturers?
Goyal said the India–EU trade pact would be signed by the end of 2026 and could be implemented the following year. That is a time-sensitive projection, not a confirmed timetable. The agreement’s final text, ratification and implementation rules will determine its effect.
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For German manufacturers, an agreement could improve the case for producing in India if it reduces tariffs or clarifies market-access rules for goods and components moving between India and the European Union. Goyal said the pact should ultimately be judged by concrete results such as new business, orders, investment and technology partnerships, rather than by the signing ceremony alone.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How does CBAM fit into the investment decision?
Goyal also discussed EU climate policy and defended India’s position in a dispute over CBAM. He argued that developed countries should carry greater responsibility for historical emissions and said India supports 17% of the world’s population while contributing less than 3% of global carbon emissions. Those percentages are claims attributed to Goyal in the PTI report, not independently verified figures in the account.
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For companies, CBAM can affect the cost and documentation of carbon-intensive goods entering the EU. German firms considering Indian production will need to assess emissions data, reporting systems, supplier performance and any future charges alongside wages, energy prices and logistics.
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Can India become a German R&D and innovation hub?
India has several ingredients for that role: a substantial technical workforce, a large GCC base and an existing population of German operating companies. Goyal’s meetings indicate that the government wants to move from investment attraction focused on factories or sales toward long-term co-creation, research and industrial partnerships.
Whether India becomes a durable hub will depend on execution. Companies will need dependable infrastructure, strong intellectual-property protection, predictable regulation, skilled managers, research links and supply chains capable of meeting German quality standards. The reported expansion intentions are significant, but audited investment data and independently confirmed project plans are not yet available.
Frequently Asked Questions
How many German companies operate in India?
Commerce and Industry Minister Piyush Goyal said about 2,000 German firms have operations in India. PTI reported the statement, but the figure was not independently audited and no company-by-company breakdown was provided.
What kinds of work can German companies place in Indian GCCs?
Potential work includes software and product engineering, analytics, industrial design, testing, procurement support and applied research. The exact scope depends on each company’s technology, data-governance and intellectual-property requirements.
When will the India–EU trade agreement take effect?
Goyal projected a signing by the end of 2026 and possible implementation in 2027. Negotiations, ratification and implementing rules can change that schedule, so businesses should treat the dates as provisional.
Will CBAM apply to every product made in India?
CBAM is aimed at specified carbon-intensive product categories, not every Indian export. Coverage, reporting duties and financial obligations depend on the product and the EU rules in force when it is imported.
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