BERLIN: Germany’s small and medium-sized enterprises (SMEs) and businesses are increasingly looking to India to expand their supply chains, according to a recent survey by DZ Bank. The German Press Agency (dpa) reported that around 40 percent of German SMEs are planning to restructure their supply chains.
The survey revealed that about 15 percent of German SMEs intend to focus on India for supply chain expansion in the next five years, up from 10 percent in 2022. This shows that India is becoming a key non-European country for these businesses. Larger companies with annual revenues around $54.3 million are particularly interested in strengthening trade ties with India.
The strong growth in India, the world’s most populous country, is a major attraction for German companies. The survey, which included over 1,000 managing directors and decision-makers, also noted that China is regaining popularity among SMEs.
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DZ Bank analyst Claus Niegsch explained that the shift towards India and Southeast Asia is partly due to companies wanting to diversify their supply chains in response to growing political uncertainties.
In contrast, the United States is becoming less appealing. German SMEs, which once valued the US for its low energy costs and large subsidies, are now showing reduced interest. Only about 12 percent of German SMEs plan to focus on the US market in the future, a drop from 15 percent in 2022. Additionally, around 9 percent are considering withdrawing their operations from the US entirely.
