Germany’s $1.5 Billion Investment to Boost India’s Chemical Sector: Piyush Goyal

. Goyal noted that multiple companies are exploring India as a business destination, driven by regulatory reforms and improving ease of doing business. (File photo)

India is set to receive a major foreign direct investment (FDI) boost as a German company from the chemical sector has committed to investing $1.5 billion in the country. Commerce and Industry Minister Piyush Goyal announced the development on Saturday, stating that a state government has already earmarked land for the project. Although he did not disclose the company’s name or the specific state, Goyal confirmed that the company’s head is expected to meet the state’s chief minister soon to finalise the allotment.

Speaking at the Union Internationale des Avocats (UIA) session, Goyal emphasised the significance of the investment, stating, “The company will have the allotment of land in his hand, and we will have a billion-and-a-half dollars of foreign direct investment coming into the country over the next 12 months.” The company is reportedly seeking around 250 acres of land near a port to facilitate exports and logistics.

Germany’s Growing Investment in India

Germany is currently the ninth-largest investor in India, having injected approximately $15 billion in FDI between April 2000 and December 2024. This latest investment highlights the increasing interest of global firms in India’s manufacturing and industrial sectors. Goyal noted that multiple companies are exploring India as a business destination, driven by regulatory reforms and improving ease of doing business.

Government’s Business-Friendly Reforms

The minister also underscored India’s commitment to reducing regulatory bottlenecks. He pointed out that the government has taken several measures, including easing compliance requirements and decriminalising minor offences, to create a more investor-friendly environment. These initiatives, Goyal stated, are fostering greater confidence among global investors.

He further assured that the government is prepared to address any legal hindrances or unfair competitive practices that foreign investors may face, including issues arising from predatory pricing.

Strengthening Arbitration Mechanisms in India

Apart from business and investment policies, Goyal also touched upon the importance of arbitration in streamlining dispute resolution. He highlighted that arbitration, if implemented effectively, can significantly reduce judicial delays. However, he acknowledged concerns regarding the quality and impartiality of arbitration proceedings.

“Of course, sometimes there are concerns about the quality of arbitration, often a matter of deep concern for us in government for two reasons—whether the government was able to present its case smartly and effectively before the arbitrators, and whether the arbitration truly carried justice or was over-influenced by large corporates or international biases,” he explained.

Goyal called for a more robust arbitration framework to instill confidence among all stakeholders. He stressed the importance of popularising arbitration and mediation, particularly as India expands its manufacturing sector.

“If India continues to grow the way it is, and we power on our manufacturing ecosystem as we hope to, disputes will inevitably arise. Keeping our courts unclogged through arbitration will greatly support our ambition to become a global manufacturing hub,” he concluded.

With this significant German investment and ongoing economic reforms, India’s position as a preferred destination for foreign investors is further solidifying, particularly in the high-value manufacturing and chemical sectors.