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Mainstream, VOL LIII No 50 New Delhi December 5, 2015

India-Germany Relations: Natural Partners in a Globalised World

Sunday 6 December 2015, by Bharti Chhibber


India and Germany share historical trade relations dating back to as far as the 16th century. Presently, Germany is India’s most important trading partner within the European Union. With India’s economic liberalisation in the 1990s, the bilateral trade has increased from 2.7 billion euros to 16 billion euros in 2014. In the first seven months of 2015, the bilateral trade increased by 13 per cent compared to 2014. However, there is a lot of scope for the two states to further deepen their trade relations in a globalised world as Germany ranks at number six globally in its trade partnership with India. Moreover, politically both India and Germany are committed to the ideals of resilient democracies, equality and liberty. Historically, India was one of the first states to end the state of war with post-war Germany in 1951 and recognise the Federal Republic of Germany.

But in spite of shared visions, they have not achieved their full potential. Germany is the eighth largest foreign direct investor in India since 2000. Currently German exports to India include electronic technology, metalware, chemicals, automobiles and automotive parts. Indian exports to Germany comprises textiles, chemicals, electronic technology, metalware, leather and food.

German Chancellor Angela Merkel’s recent India visit resulted in signing of 18 memoranda of understanding between the two states on wide-ranging issues including skill development, education, science and technology, railways, and aviation. In order to make it attractive for German investment, India announced the setting up of a ‘fast-track clearance mechanism’ for German companies. As of now, such a mecha-nism exists only for Japan. Chancellor Merkel and Prime Minister Modi also discussed important global and regional issues, including climate change, state of affairs in Afghanistan, Syria, Iraq and Ukraine, and United Nations reforms. In clear reference to increasing Chinese assertiveness in the South China Sea, the two leaders also emphasised the significance of freedom of navigation in high seas, the right of passage and other maritime rights as per international law. In the arena of renewable energy, Germany promised € 1 billion for India’s Green Energy Corridor and another € 1 billion for solar projects.

That Chancellor Merkel visited India despite a refugee crisis back home highlights the importance which she gives to the relationship between the two countries. Reciprocally Prime Minister Modi values German association in trade, technology, clean energy, and in the United Nations. As Prime Minister Modi said on German Chancellor’s Merkel’s India visit, “We see Germany as a natural partner in achieving our vision of India’s economic transformation. German strengths and India’s priorities are aligned... our focus tends to be on economic ties. But, I believe that in a world of seamless challenges and opportunities, India and Germany can also be strong partners in advancing a more human, peaceful, just and sustainable future for the world.” It is important to note that Indo-German collaboration is mutually beneficial. India needs German expertise and with the shrinking of conventional markets in Europe, Germany tends to benefit from access to India’s markets.

Since 2001 India and Germany have a ‘strategic partnership’, followed by three rounds of Intergovern-mental Consultations in New Delhi in 2011, in Berlin in 2013 and of late in India when Chancellor Merkel came to this country. India was also the Partner Country in Hannover Messe-2015 in April 2015. The two states have institutionalised processes to discuss bilateral and global issues like Strategic Dialogue, Foreign Office Consultations, Joint Commission on Industrial and Economic Cooperation, High Technology Partnership Group, High Defence Committee and Joint Working Group on Counter-Terrorism.

Indo-German relationship also got a boost earlier this year with the Indian Prime Minister’s visit to Germany. In Berlin, he called for strong economic ties between the two countries in the wake of Germany’s technological and manufac-turing advancement and India’s ‘Make in India’ initiative for economic development and employ-ment. The two states also agreed on a united fight against terrorism, which is a global challenge. In the field of environment the two states decided to establish joint working groups in water and waste management. It was further agreed upon to collaborate in India’s proposed objective of 175 GW of renewable energy by 2022 through technical and financial support for developing comprehen-sive solar rooftop and green energy corridor projects in India. In the area of science and technology both sides agreed to extend the tenure of the bi-national Indo-German Science and Technology Centre in India. Likewise collaboration was agreed upon for mutual benefit in the development of smart cities in India with affordable housing.

India and Germany also have a long tradition of academic and cultural exchanges. During the Prime Minister’s Berlin visit it was agreed upon to set up an International Centre for Advanced Studies in the Humanities and Social Sciences and enhance the exchange of scientists of both countries.

On the front of irritants in the alliance, with the two leaders deciding that German will be taught in Kendriya Vidyalayas as an additional foreign language and modern Indian languages will be taught in Germany, Merkel’s visit also ended the controversy over German as a third language in schools. Another critical issue is that of India-European Union Free Trade Pact which is being negotiated for years. Perhaps Germany being a powerful member of the grouping could help in building up a positive climate for the negotiations to succeed. Moreover in the context of United Nations reforms Germany and India are already working together through the G-4 mechanism comprising Brazil, Germany India and Japan.

Hence, India and Germany are associating almost in all Indian initiatives ranging from Make in India, Skill India, and Clean Ganga to the Smart Cities plan. Now it is crucial that German companies take full advantage of the opportunity and participate in these projects.

There is a great deal of potential which can be realised through cooperation in the sphere of information technology, ITES, biotechnology, green technology, urban development and the entertainment industry. Additionally, it is also pivotal that the two states further enhance their strategic association for a robust cooperative relationship working towards a truly equitable multipolar global order.

Dr Bharti Chhibber teaches Political Science in University of Delhi. She may be contacted at:

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