Germany’s India Advantage: Leveraging India Hubs for Innovation and Growth

Germany’s industrial base is beginning to creak. More than 163,000 STEM roles lie vacant. Energy bills are climbing higher than anywhere else in Europe. Bureaucracy is slowing the system down. And in Automotives – Germany’s crown jewel, China is challenging its dominance in exports.

The strain shows up most visibly in the Mittelstand (family-owned businesses) that make up 99% of the German economy. Long seen as stabilisers, they are now struggling to hold ground.

As a result of this, German firms are hedging. Over 80 Enterprises have set up more than 150 Global Capability Center (GCC) units in India, together employing 130,000 people and generating EUR 4 Bn in value. ~31% of them belong to Mittelstands – proof that it isn’t just the big Enterprises making the shift.

Why India? Because it fills the gaps Germany is struggling to close: More than 5 Mn Engineers and 300,000 IT graduates enter the workforce each year, an AI-ready talent base unmatched anywhere else, and the ability to build teams at nearly 50% lower cost.

Automotive alone accounts for more than 17 Germany GCCs, with Bosch, Daimler, and Continental leading work on connected and sustainable mobility. In technology, firms like SAP (with 15,000+ employees in India) and Deutsche Telekom (7,500+ employees) are running global digital platforms from India. The Mittelstand story is equally striking: over 25 Mittelstand GCCs, concentrated in Pune and Bengaluru, employ 7,300+ Engineers – enabling faster product cycles, expanded digital capabilities, and entry into markets well beyond Europe.

Why This Report Matters Now

Germany’s future competitiveness will hinge on how fast it adapts. The “Germany’s India Advantage: Leveraging India Hubs for Innovation and Growth” report, released in collaboration with the Indo-German Chamber of Commerce, highlights how German Enterprises and Mittelstands are turning to India to build new capabilities.

The report unpacks, how:

• Mittelstands are reinventing themselves with India at their core.

• Large firms are building Engineering and AI leadership from India.

• 10X Innovation is being realized through start-up and academic ecosystems.

• GCCs are creating resilient global business backbones.

India is no side story – it’s where German industry is writing its future, powered by Engineering depth and Digital speed.

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