Germany on Thursday invited Indian companies to invest and set up manufacturing facilities in the country, saying it offers a slew of tax rebates and other financial incentives measures.

"When making their investment decisions, investors frequently look at the eastern and western European market separately, and often overlook the fact that with its strategically favorable position, eastern Germany is an exceptional investment location for serving both markets from a single site," German Deputy Minister of Transport, Building and Urban Affairs Engelbert Lutke Daldrup said in New Delhi.

Speaking at a KPMG-Ficci event, he said the government gives high level of tax rebates for investing in East Germany, besides providing a range of financial assistance schemes.

"Technology-based companies can benefit most from East Germany as it provides with huge investment potential," he said, adding Indian companies in sectors, like automotive, mechanical engineering, micro-electronics, renewable energies, biotechnology, pharmaceuticals and chemicals can also gain from investing in the country.

Currently, about 20 Indian companies in East Germany employ around 2,000 people and the country expects to double this number in the next 2-3 years, he said.

"Many Indian companies want to come to East Germany. Presently few Indian pharmaceutical firms and automotive component makers are holding discussions with us," Daldrup said, without divulging name of the companies interested in investing in East Germany.

East Germany was united with West Germany after the end of Cold War.

Releasing the report on investment opportunities in East Germany, KPMG Germany Director (advisory services) Andreas Dressler said because of its advantageous location in the region, Germany is one of the most lucrative sources of potential businesses.