New fast track treaty with India - cutting red tape and more legal certainty for German investors

The third Indo-German intergovernmental consultations were held in New Delhi in early October 2015. Germany and India signed new trade agreements on renewable energy and to simplify investments and operations of German undertakings in India.

The fast track treaty (also known as "single window clearance") is intended to reduce bureaucratic hurdles and to speed up and simplify approval processes for German companies investing in India. In the future, only a single Indian agency will be responsible for issuing permits and licenses to German investors, reducing the need for a variety of authorization procedures. "The introduction of the one-stop single window clearance procedure is essential for German investors in India. It is designed to combat confusion about competencies and the Indian bureaucratic maze. Today, depending on the industry sector and business transaction, investors needed up to 30 approvals at federal and state level. The new fast track treaty will clearly govern responsibilities and thus offer legal certainty. The one-stop procedure will make India even more attractive for our clients and the German SME sector. They will benefit from the more efficient process, allowing our clients to achieve their objectives faster," said Dr. Martin Imhof, Partner at Heuking Kühn Lüer Wojtek’s Düsseldorf office. The commercial law firm concentrates the rising demand for India-related transactions in the India Desk led by Dr. Imhof.

As part of the intergovernmental consultations, Indian Prime Minister Narendra Modi invited German companies expressly to invest in India and to participate in bids for infrastructure projects. Germany and India also signed a partnership agreement on establishing green energy corridors and a memorandum of understanding on an Indo-German solar partnership, including subsidized loans of one billion euros over the next five years. Another focus will be the collaboration on setting up “smart cities” in India. Smart Cities are digitalised, energy-efficient cities which shall be established between and in the surroundings of the Indian mega cities.

Chancellor Merkel considers India to be Germany's prime country for development cooperation. She stressed India’s great potential, but also pointed out the tasks that remain to be completed. At a trading volume of some EUR 16 billion in 2014, Germany remains India's largest trading partner in the EU. More than 1,600 German companies employ about 400,000 people in India. In the first few months of 2015, German exports to India rose by around 18%. According to IMF estimates, India’s economy will grow by 7.5% this year and next, thus growing faster than China. Hence, there are many good reasons for your investment in India. We would be delighted to support you.

More information about India Desk can be found here.

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