Germany is India's largest trading partner in Europe. Bilateral trade increased to $21.98 billion (2017-18), a growth of 17.15 per cent. In 2017-18, India;s exports were worth $8.68 billion to Germany and imports were worth $13.29 billion.

Germany is the seventh largest foreign direct investor in India. Germany's total FDI in India from April 2000 until June 2018 amounted to $10.99 billion. There are more than 1,700 German companies active in India and over 600 Indo-German joint ventures in operation. German investments in India are mainly in the sectors of transportation, electrical equipment, metallurgical industries, services sector (particularly insurance), chemicals, construction activity, trading and automobiles. In 2018, Indian imports from Germany experienced a good growth of 17 per cent over the previous year and amounted to Ç12.5 billion. From January to June 2019, Indian imports from Germany stood at Ç5.8 billion, out of which machinery imports comprised 25.6 per cent and stood at Ç1.5 billion.

India ranks 15th globally, in the list of top 50 destinations for the German Mechanical Engineering exports. In 2019, the total import of machinery from Germany reached a volume of Ç3.07 billion. This was a drop by 8.6 per cent compared with the same period in the previous year.

Among the machinery sectors, major demand of German equipment was for power transmission (11.6 per cent), plastics and rubber machinery (6.9 per cent), machine tools (6.9 per cent), valves and fittings (5.3 per cent) and air handling technology (5.1 per cent). There are other sectors like construction equipment and building material machinery, fluid power equipment, textile machinery and food processing and packaging, which are growing steadily in India.

Out of the total export of German mechanical engineering to Asia of Ç41 billion, India is the second-largest sales market in Asia for the German engineering industry, with a share of 7.5 per cent, after China (45.8 per cent). In 2019, India imported machinery of the value Ç24 billion globally. Germany is the second most important supplier to India globally, with a share of around 15 per cent.

With around 44 per cent share of German investments, Maharashtra remains to be the most attractive destination for German investments in India. In the last 4-5 years, Pune has become the hotbed for new German investments. Karnataka and Tamil Nadu are other important destinations.