German machinery exports to India rise 11% as firms look beyond China

India is emerging as a strategic partner for German and European mechanical and plant engineering industry, driven by rising demand, investment opportunities and efforts to diversify supply chains away from China, according to the German Engineering Federation (VDMA).

German machinery exports to India rose 11% to €2.2 billion in the first half of 2026. A VDMA business survey found that 65% of engineering firms operating in India expect order intake to increase, while 56% anticipate an improvement in their business situation.

Around 600 VDMA member companies are currently active in India, manufacturing or developing products locally and providing customer services. The country is gaining importance not just as a sales market but also as a destination for investment, innovation and production.

Geopolitical tensions and growing economic uncertainties have prompted companies to reassess their supply chains, with India emerging as an increasingly important location for strengthening the resilience of global value chains, the VDMA said.

Addressing the VDMA Mechanical Engineering Summit in Pune, VDMA president Bertram Kawlath said “India and Europe could form one of the defining industrial partnerships of the coming decade”.

The proposed free trade agreement between India and the European Union offers prospects for significant tariff reductions in the mechanical and plant engineering sector, potentially strengthening trade and investment ties.

“We need more trade, more investment, more technological cooperation and stronger industrial links,” Mr. Kawlath said.

The VDMA also called for greater reciprocal access to public procurement markets in India and Europe, arguing that wider market access could deepen industrial cooperation between the two economies.