The Hindu Business Line : `Go for joint ventures with German SMEs'

Hyderabad April 4 In view of the inherent strengths in manufacturing it will be a good business proposition for Indian small and medium sector enterprises (SMEs) to form joint ventures with SMEs in Germany, according to Dr Michael Fuchs, Member of Parliament, Germany.

"The SMEs in India have cutting-edge manufacturing capabilities while innovation abounds in the SMEs in Germany. This gives immense scope for joint ventures and greater collaboration," Dr Fuchs told Business Line here.

After a complete collapse post the Second World War, Germany chose the SME route with a focus on R&D. "Like the IT industry here, our SMEs are backed by strong innovation. There are nearly three million SME units and their patent generation is among the highest in the world," he said.

However, there are still gaps in manufacturing support. "Germany has invented the fax machine but not a single fax machine is manufactured there. Unlike India, our strong disadvantage is productisation," Dr Fuchs said.

Out of 3.4 million business units in Germany 99.7 per cent are SMEs and over 70 per cent of employment is generated by them, he said. In India, there are 12.3 million small-scale industries (SSIs) as per the data available with the All India Management Association (AIMA).

On the possible areas of collaboration, Dr Fuchs said German SMEs could offer training programmes in product lines and management practices. While immense scope exists for collaboration in all fields including infrastructure, textiles and auto components, the IT industry in India is of particular interest to Germany.

On the vital concerns for SME industry, he said: "We are very much concerned about patent infringement as our SMEs are at the receiving end. We will highlight the issue in the next G8 Summit to be hosted by Germany. We also favour a strong World Trade Organisation-led global economy to a multitude of Free Trade Agreements," he said.