• The CAGE Distance Framework identifies

Cultural, Administrative, Geographic and

Economic differences or distances between
countries that companies should address
when crafting international strategies. It may
also be used to understand patterns of trade,
capital, information, and people flows.
 Cultural Distance
Factors Germany India

Languages spoken 95% of the population speaking German, Sorbian, Frisian Around 1652 languages

Religions Christianity, Islam 4%, Judaism & Buddhism – together 1% Majorly Hindu and Muslim followed by
Christians and 2% unspecified

Major celebrations September – Oktoberfest 26th January – Republic Day

October – German Unity Day 15th August – Independence Day

Different ethnicity 91.5% - Germans 72% - Indo Aryans

2.4% - Turks 25% - Dravidians
6.1% - Greek, Italian, Polish & Russian 3% - Minority and other groups

Different social norms Naming conventions Naming conventions

Greetings are formal. Use a person’s title and their surname Greeting with “Namaste”
until invited to use their first name. you should say Herr or Communication in local language
Frau and the persons title and their surname
 ADMINISTRATIVE DISTANCE
Factors Germany India

Legal system Civil Law system Common law

Government type Federal Republic Federal republic

Currency Euro Indian rupee

Monetary association Deutsche Bundesbank euro Reserve Bank of India

system

Judicial branch Federal constitutional court Supreme Court

Government policies Governs the country Governs the country

 GEOGRAPHIC DISTANCE
Factors Germany India

Physical remoteness

Common border

Sea or river access

Size of country 357386 km sq. 3.287 million sq. km

Natural resources Timber, Natural gas, Coal, Lignite, Coal, Iron ore, manganese ore, Mica
Uranium, Iron ore

Difference in climates Moderate – No longer period of hot or Varies from tropical monsoon in south
cold weather in temperate in North
 ECONOMIC DISTANCE
Factors Germany India

Origin of economic reforms Economic reforms started in 1948 Economic reforms started in 1991

Economic size Ranks 4th (GDP - $3714 trillion) Ranks 7th (GDP - $2.76 trillion)

Difference in consumer income Per capita disposable income stood at 34,294 Per capita disposable income stood at
USD in 2016 1,44,429 INR ($2,106.64) in 2018

Unemployment rate 3.1% 8.5%

Population 8.28 crores 133.92 crores

Exports & Imports Imports from Germany – Machinery, Imports from

Vehicles, Pharmaceuticals, Chemicals
Exports to Germany – Computer and
electronic products, electrical equipment,
textiles, rubber and plastic products.
 BUSINESS ENVIRONMENT
COMPARISON
INDIA GERMANY

One of the largest economies in the word with robust and Largest economy in Europe with a 22% share of Eurozone GDP and
sustainable GDP and FDI growth. access to 454 million consumers.

Skilled manpower availability of competitive costs. Worlds’ 2nd largest exporter – ‘Made in Germany’ is a seal of
quality recognized around the world.

Rich base of mineral and agricultural resources and other raw Located in the heart of Europe and shares borders with every major
materials thereby reducing the cost of inputs. economy in the central Europe.

Sophisticated financial sector – Standardized and regulated. High sophisticated infrastructure motorways, railroads and
telecommunications network ensure that goods and IT – services
are delivered quickly and reliably