Inspired by Benz, Bosch and others, German cos lining up

American companies are the biggest outsourcers of IT. They also dominate the establishment of GCCs (global capability centres) in India. Continental European companies tend generally to be more cautious about stepping out of the European Union region. But there are some prominent exceptions, and many of those are German. Mercedes-Benz, Bosch, Siemens, Deutsche Bank, Continental have all built large GCCs in India that have over the years matured and are doing cutting-edge work, and leading global projects. If SAP’s India centre can be counted as a GCC, as some do, that’s another amazing story. Lufthansa last month announced it will set up a GCC in association with Infosys. BMW last year formed a joint venture with Tata Technologies to develop automotive software and business IT solutions.
Today, lots of others, including small and medium companies – what the Germans call Mittelstand – are also looking closely at India, says Achim Burkart, consul general in the German Consulate at Bengaluru. “There were a lot of prejudices about this country, and that made it difficult to attract companies here. But today, India is very much in the minds of German companies. It’s also because it’s German govt strategy – India is a strategic and a globally important partner to us. We have high-ranking delegations on a regular basis. Trade is improving. And when I visit German companies here, they say, yes, perhaps we started as a back office, but now we take pride in the fact that we add value to the whole company worldwide,” Burkart told us during an interaction we had with German govt and company representatives the other day.
John Kottayil, executive director in the State of Bavaria India Office, said a 40-member defence and aerospace delegation from Bavaria is visiting India in April to look at opportunities here.
Stefan Halusa, director general of the Indo-German Chamber of Commerce, said that the chamber, together with KPMG, does an annual German Indian business outlook, and that’s shown a dramatic growth in interest among German companies – across sectors and company sizes – in doing business in India. And while the most important reason for wanting to invest in India is to produce for the local market, there’s also a strong increase in investing to establish GCCs. “In the past, only 17% of the companies said GCCs and availability of talent were reasons for them to invest in India, but the expectation towards 2029 is that this will go up to 35%,” Halusa said. And while labour cost is still an important reason for this GCC investment, more and more companies are indicating that political stability and availability of highly qualified personnel will become the more important factors going forward.
Top talent is already the primary reason for mature German GCCs here. Prashanth Doreswamy, CEO for India at automotive parts maker Continental, said among the frontier tech work they are doing here is an effort to use AI to develop synthetic data on driving conditions around the world, so that they can use that data to prove the effectiveness of, say, new autonomous mobility functions they develop. That will help save a lot of costs and time that is currently spent in physically driving test vehicles in different conditions.
Kalavathi GV, head of the global development centre in medical tech company Siemens Healthineers India, said the centre here did the entire engineering and development of an AI companion that dramatically improves the efficiency of radiologists across the world, as also sharply reduces the time it takes for oncologists to do radiotherapy planning.

Some of those we spoke to also noted that business relationships could move faster if some of the uncertainties and hurdles around transfer pricing and trade processes could be removed. Hubert Reilard, managing partner at Comono Advisory, said India could learn from Germany how different levels of knowledge – skilled workers, engineers, scientists – work together. “This is formalised in Germany. And in my opinion, it is the core of German success after the World War,” he said.