Greater commitment to the Indian growth market

For consumer and capital goods alike, moving forward the Indian subcontinent could develop into a huge sales market.

Growth rates in excess of 6 % are something other countries can but dream of. It also means investment opportunities in India that must be seized swiftly. Germany is not the only country looking to double its trade with the subcontinent in the coming years: "The scene is set, the will is there - on both sides," Wolfgang Clement, German economics minister, said at the end of his trip to India early in April. Following growth of 22.5 % bilateral trade last year came in at EUR 6.22 billion. Indian shipments to Germany consist chiefly of textiles, chemical products, footwear and leather goods. From Germany, machinery and electrical and chemical products are in particular demand.
The Indians have big plans. The country's prime minister Manmohan Singh, for example, has declared the government's intention of improving power supplies. His ambitious target is to have every village in the country connected to the power grid by 2009. The number of rural households without electricity is estimated at 78 million. The fear of Indian bureaucracy is also often exaggerated, according to India's finance minister Palaniappan Chidambaram: Almost all applications are processed within ten weeks, and the processing speeds have doubled, he maintains.

Many businesspeople take a similarly upbeat view of the market to Germany's Clement. "Although economic growth in India is not progressing at quite the rates on comparable markets, the huge aggregate potential and positive forecasts are prompting companies to commit more heavily to India," says Klaus Dittrich, managing director Messe München.
The exhibition company staged componex/electronicIndia at the beginning of February in New Delhi - and successfully so. In response to the strong demand for space the expo was moved two years ago from Bangalore to the Indian capital.
Manfred Wutzlhofer adds: "For the transport/logistics sector we have been present in India since 2000 with Transport India, for the construction industry since 2002 with Baucon India, and for biotechnology with Analytica Anacon since 2003." He says the electronics and analytics shows are developing particularly well. The whole thing is not just a one-way street, Messe München's chief executive officer insists. "Trade fairs in Germany are also attractive for Indian industry. On average for the past four years more than 100 exhibitors and around 750 visitors per annum have taken part in tradeshows in the Bavarian capital. "Interest on the exhibitor side focuses on jewellery and timepieces, sports goods and electronics, on the visitor side on construction, ceramics, electronics, laser, analytics, drinks technology, jewellery and timepieces, and sports goods."

A mood of excitement is buoying industry. India is a crouching tiger. "It was only at the beginning of the 1990s that India cautiously opened up its markets. So it is a country that (so far) still takes up position behind other major economic powers in the second, if not the third row, even though it represents the second largest nation on our planet with 1.1 billion people and, with a territory encompassing almost 3.3 million km2, is the size of the entire EU," says Ingo Klöver, planetfair, Hamburg, who represents CIDEX, the Indian joint venture between Messe Düsseldorf and Koelnmesse.
But the "huge middle class is on the way to developing needs and aspirations in line with western traits". The increasing prosperity among this class, whose share of the population is rising by around 15 % a year, is evident wherever you look: Many city folk are indulging in motor scooters, and the number of mobile phone users is soaring. Even if the Indians level of consumption is regularly underestimated for statistical purposes, the National Council of Applied Economic Research (NCAER) has calculated that India's middle class will swell to 430 million people by 2007. Klöver also interprets planetfair's success in getting Indian buyers to the Emirates to attend the Prestige trade show for up-market fashion labels in Dubai as evidence of the interest in western consumer goods.
After all, even the Indians are not able to produce all the goods themselves in the quality required. Like any other country, India is reliant on products and services from other countries. Trade shows on all themes are therefore important. Ingo Klöver: "As exhibition organisers, we bring the suppliers of the desired products into the country, merely offering a time-tested means of introducing adequate supply to constantly expanding demand."

Coimbatore - an industrialised southern Indian city situated in the triangle of Tamit Nadu, Kerala and Karnataka - is increasingly evolving into a centre for the procurement of automobile components, casting and forging. The region is more than suitable as a source of technical parts such as valves, too, given that the articles manufactured comply with EU quality guidelines, according to the company Paul E. Schall GmbH, Frickenhausen, which stages its proprietary exhibition Control in Coimbatore. But the show is not taking off from July 6 to 12 as a pure-play quality assurance fair, it is an industry trade fair for factory automation, quality assurance, metalworking and processing, plastic forming and processing, lacquering and powder coating. "People who want to sell their products abroad should also be on site to discover the possibilities for sales expansion," company boss Paul Schall says.
Deutsche Messe AG, Hanover is still taking soundings. Sven Prüser, who is in charge of international operations there, feels confident that "we'll be announcing specific initial activities at the very least there next year". These need not necessarily be exhibitions. "There are a number of projects in India for the realisation of new exhibition centres. We have introduced ourselves as consultants to various players or have been asked to make ourselves available as such."

Proximity to the capital and a new exhibition centre in the throes of completion are an enticement. Interkama India (October 1 to 3), running concurrently with the trade fairs Biotec India and Pharma India, is to be staged in future at the India Expo Center (IEC) in Greater Noida, not far from the capital Delhi, and no longer in Hyderabad, says Stephan Küppers, Interkama India project manager. Werner Matthias Dornscheidt, Messe Düsseldorf CEO: "Like China, India is a vast home market that has undergone an enormous metamorphosis in recent years. More and more buyers and sellers are switching from the melas, the traditional Indian marketplaces, to sophisticated trading platforms to solicit business at national und international level." The opening of many sectors that were previously quasi no-go areas for foreign companies because of the state protection they enjoyed has considerably broadened the field of activity for exhibition organisers.
Dornscheidt makes no bones about the fact that development of the Indian exhibition industry, as a mirror of the general process of economic reform, is not (yet) moving ahead at the "desired express speed" as, say, in China. "International trade fairs with a global aspiration are of no importance in India at present." He sees the Indian market radiating increasingly onto the southeast and south Asian region as well. Dornscheidt: "This is significant to trade fairs on both the supply and demand side. First and foremost, professional attendees from these regions visit fairs in India." In this respect, too, he is convinced the Indian exhibition market has great potential, although it will still take some years fully to unfold.
Messe Düsseldorf took its first steps on the subcontinent in the 1980s with the implementation of German national participations, before deciding in 2001 to get together with Koelnmesse on a joint venture and beginning to develop its own products in the market. What doesn't work in Germany, works well in India: In CIDEX Trade Fairs PvT. Ltd. two highly reputed exhibition companies have joined forces. "With the two German partners support and years-long experience, CIDEX possesses both an exceptionally good network of contacts with international associations from industry, the distributive trade, services and other organisations and close ties with Düsseldorf and Cologne Fairs international branches and subsidiaries," Dornscheidt points out.

"The best way for German and European companies to access the prospering Indian market is through tradeshows. For many firms, participation in an exhibition marks the first encounter with the people and possibilities. Local shows under the aegis of a trusted provider offer good opportunities to address the requirements and special features of the new market and are the best way of avoiding mistakes," explains Jochen Witt, CEO of Koelnmesse, which already organises five events on the subcontinent. Most recently, the International Foodtec India 2004 modelled on Cologne's leader fair Anuga Foodtec was successfully staged. World of Food China premiered in December in the southern Indian city Hyderabad.
"India is far more difficult to understand than China," Michael von Zitzewitz knows from experience. The CEO of Messe Frankfurt, represented there by a subsidiary since 1998, discovered that for organisers, too, the market is not an easy one: Automechanika, the first local trade fair in 1999, has just been cancelled for 2005. "In Heimtextil India we're glad to have a show resting on a secure basis," he says with a rueful glance at the Indian market.
That said, the general consensus is that India is emerging from China's shadow in terms of European awareness. And it's a market worth tackling.

The number of companies taking part in trade exhibitions in India and Germany respectively has risen steadily over the years. For Indian companies, German (global leader) fairs are crucially important, providing them with a communication and trade platform enabling them to market their products not only on the European market, but worldwide. This is borne out by the high number of Indian exhibitors and visitors attending German fairs year for year. Between 2000 and 2003 alone altogether roughly 8,000 exhibitors and around 80,000 visitors from India participated in German shows, and the trend is pointing upwards. But for German firms, too, the Indian market is moving increasingly to the forefront of attention, which is why the German government has a heightened interest in establishing Germany's small and medium-sized Mittelstand companies on the subcontinent as well. Funds are being freed up for trade fairs as the ideal marketing and exhibition tool. At present the federal government has eight trade fairs in India on its foreign exhibition programme for 2005.

m+a report Nr.3 / 2005 vom 27.04.2005
m+a report vom 27. April 2005