BACKGROUND OF RELATION
- Germany is one of India’s most important partners in Europe owing to Germany’s key role in the EU.
- India and Germany have a ‘Strategic Partnership’.
- As the 6th and 4th largest economies in the world respectively, India and Germany share a robust economic and developmental partnership.
- Besides the economic interest, both countries have a shared interest in upholding democratic values, rules- based international order, multilateralism as well as the reform of multilateral institutions.
AREAS OF COOPERATION
MULTILATERAL COOPERATION
- Both support each other on UNSC expansion within the framework of G-4 (India, Japan, Brazil & Germany making a joint effort for UNSC reforms and claiming permanent membership of the UNSC).
- Germany joined Coalition for Disaster Resilient Infrastructure (CDRI) in 2020.
- Germany is a member of International Solar Alliance (ISA) floated by India.
- Germany has outlined its Indo- Pacific strategy in line with India’s approach.
PARTNERSHIP FOR GREEN AND SUSTAINABLE DEVELOPMENT
- Germany has committed to providing additional development assistance of €10 billion till 2030 to support India’s green growth plans.
- Agreed to a 7-point agenda on renewable energy and sustainable growth cooperation.
SECURITY AND DEFENCE COOPERATION
- Signed MoU on Security Cooperation in 2015.
- Dialogue Mechanisms
Joint Working Group on Counter Terrorism - Cyber Consultations
- Joint Steering Group on Disaster Management.
- Bilateral Defence Cooperation Agreement was signed in 2006.
- Agreement on Mutual Protection of Classified Information was signed in 2007.
- At the recent visit, both countries agreed to step up high-tech transfer collaborations and signed a joint declaration of intent for an agreement on exchange of classified information.
ECONOMIC COOPERATION
- Germany is India’s largest trading partner in Europe.
- It has consistently been among India’s top ten global partners and was the seventh-largest trading partner in FY 2020-21.
- Bilateral trade in 2020-21 was USD 21.76 billion which is a fifth of trade between India and US.
- Germany is the 7th largest FDI source for India.
AREA TO FOCUS UPON
- Both countries have identified focus areas for further cooperation, which include Artificial Intelligence digitalisation, agriculture, clean energy, e-mobility, urban development, Smart Cities, railways, Industry 4.0, start-ups, skill development, and water and waste management.
- Both countries see mutual benefit in an India-EU Free Trade Agreement and Investment Protection Agreement.
- However, FTA talks have remained stalled since 2013.
DIASPORA
- There are around 2.03 lakh (December 2021) Indian passport holders and Indian-origin people (about 1.60 lakh NRIs/Indian Passport holders and around 43,000 PIOs) in Germany.
- Indian diaspora mainly consists of professionals, researchers and scientists, businessmen, nurses and students. There has been a significant increase in last few years in the number of qualified Indian professionals in the fields of IT, banking, finance.
CONVERGENCE OF INTEREST
- Pursuit of Strategic Autonomy: In a multipolar global order, both support each other’s pursuit of strategic autonomy. While for India strategic autonomy means economic multi-alignment and neutrality on international conflicts, Germany increasingly seeks strategic autonomy through the European Union.
- Reducing over dependence to achieve autonomy: In the context of Ukraine war, Germany has been struggling to reduce its dependence on Russian oil and gas. Similarly, India also realizes that it is over dependent upon Russia for its defence supplies.
- Recognition of legitimate interests: Visible in all the agreements signed between the two countries at the visit of the PM Modi.
- Indo – Pacific: Germany was one of the first European nation to outline its Indo-Pacific guidelines in 2020. With increasing scepticism of the global community towards China and India increasing regional clout more European countries are showing confidence in India to shape the region strategic architecture.
- Climate Action: Russia’s invasion into Ukraine has led to a rethinking in Germany’s energy-import policy which creates an unparalleled window of opportunity for Indo-German green hydrogen cooperation as Germany seeks to decrease its dependence on Russian gas. Similarly, India also has the challenge of managing its energy security amidst the global crisis generated by Ukraine war. In this context both nations signed the Partnership for Green and Sustainable Development which is reflective of the close climate cooperation.
CHALLENGES IN RELATIONS
- In all European powers, including Germany, there is a tendency to de-hyphenate India and China. This is mainly because of the increased integration of global supply chains with China. Besides, there is an increasing tendency amongst the European countries to stay away from calling out China as highlighted by their stand on the Chinese expansionist policies along Indian border.
- Germany and European countries have sometimes been wary of the Human Rights issues in India.
- Germany focuses on trade and investment as the main conduit to deepen its relations with India. However, is tough environment and labour standards are seen as one of the biggest hindrances.
WAY FORWARD
Despite the challenges, as Germany comes to terms with new global realities, a strong partnership with India is today an important part of its foreign policy vision. This new vision has the potential to transform not only this bilateral partnership but also the wider engagement of the European Union with India.
