The recent 7th India-Germany Intergovernmental Consultations (IGC) co-chaired by Prime Minister Narendra Modi and Chancellor Olaf Scholz marked a critical moment in this bilateral relationship. Under the theme “Growing Together with Innovation, Mobility, and Sustainability,” these consultations highlighted key areas of cooperation:
- Germany’s “Focus on India” Document: This strategic blueprint aims to enhance both countries’ capacities to work as a “Force for Global Good,” covering innovations, sustainable development goals, and technology leadership.
- Skilled Worker Visa Expansion: Recognizing the vast pool of Indian talent, Germany announced a major increase in visas for skilled Indian professionals, from 20,000 to 90,000, addressing its labour shortage while creating opportunities for India’s educated youth.
- Digital and Technological Partnerships: The countries outlined a collaborative agenda for digital governance, tech regulations, digital agriculture, and emerging technologies such as AI and IoT, intending to foster innovation and facilitate India’s digital transformation.
- Climate and Sustainable Goals: The nations reaffirmed commitments to sustainable development by launching an Indo-German Green Hydrogen Roadmap and promoting sustainable urban mobility in India.
Economic Ties and Trade Relations
India and Germany’s trade relationship is robust, as Germany stands as India’s largest trading partner within Europe. Key points include:
- Trade Volume: Bilateral trade between the two nations reached approximately USD 21.76 billion in FY 2020-21, a figure indicative of strong commercial interdependence.
- Foreign Direct Investment (FDI): Germany is among the top investors in India, ranking seventh with over USD 13 billion invested in sectors including automotive, manufacturing, and advanced technologies from 2000 to 2021.
- Support for SMEs: Initiatives like the “Make in India Mittelstand” program help German SMEs tap into the Indian market, fostering bilateral growth and strengthening small businesses.
- India-EU Free Trade Agreement: As part of a larger EU-India strategic partnership, Germany and India are also working to advance an India-EU Free Trade Agreement, promising a future increase in trade flows and investment protection.
Defence and Security Cooperation
Defence ties have historically lagged in comparison to India’s partnerships with other European countries like France; however, Germany’s recent measures signal a change:
- Defence Procurement and Special Status: Germany has granted India a special status for expedited defence procurement approvals, underscoring Germany’s support for India’s security needs.
- Project 75I: As India seeks to diversify its defence imports, Germany’s Thyssenkrupp Marine Systems competes to supply six advanced submarines to India’s navy, a project that, if secured, would strengthen Indo-German defence collaboration.
- Shared Security Concerns: Both countries are cautious of China’s influence in the Indo-Pacific, driving their focus on mutual security interests, technological innovation in defence, and arms co-production.
Challenges and Divergent Perspectives
Despite shared goals, challenges persist within the partnership. Differences in geopolitical outlook and other barriers impact their collaboration:
- Democratic and Value-Based Differences: Germany’s occasional criticism of India’s internal democratic practices has caused friction, contrasting with India’s preference for respecting sovereignty and non-interference in domestic issues.
- Russia-Ukraine Conflict: India’s neutral stance on the conflict contrasts with Germany’s direct condemnation of Russia, resulting in a divergence in perspectives that both nations are working to bridge.
- Investment Protections: Germany relies on the broader EU-India Bilateral Trade and Investment Agreement (BTIA) for investment assurances, limiting direct protections that a standalone India-Germany bilateral investment treaty would provide.
Migration and Skilled Worker Partnerships
Germany’s demand for skilled workers has opened significant migration avenues for Indians, a core element of their evolving partnership:
- Migration and Mobility Partnership Agreement (MMPA): Signed in 2022, the MMPA enables skilled Indian professionals, researchers, students, and trainees to seek opportunities in Germany, reducing bureaucratic obstacles for visas and recognising Indian qualifications.
- German Language and Integration Initiatives: Germany is actively promoting language acquisition and easing integration for Indians, ensuring a smoother transition for workers and students to adapt and thrive.
Cultural Exchange and Soft Power
The cultural link between India and Germany is equally significant, as these interactions facilitate a deeper connection between their people:
- Indian Students in Germany: Over 50,000 Indian students are currently enrolled in German universities, making Indians the largest foreign student demographic in Germany, demonstrating the popularity of German higher education.
- Indian Cuisine and Cinema: Indian cuisine and Bollywood have a strong presence in Germany, enhancing India’s cultural influence. Popular Indian food chains and movies filmed in Germany contribute to a growing familiarity and cultural resonance.
Path Forward: Strengthening Bilateral Ties
Moving forward, India and Germany are poised to build on their shared interests while addressing underlying challenges:
- Enhanced Dialogue and Engagement: Regular high-level meetings and Track 1.5 dialogues involving think tanks, academics, and industry experts are essential for aligning their policies and broadening their strategic partnership.
- Respect for Sovereignty: Acknowledging each other’s unique geopolitical perspectives and sovereignty can prevent friction and deepen mutual respect, especially regarding India’s non-alignment stance on issues such as Russia and internal democratic dynamics.
- Collaborative Initiatives in the Indo-Pacific: As both nations aim to counterbalance China’s influence in the Indo-Pacific, joint military exercises, technology transfers, and defence co-production can fortify their regional security stance.
In conclusion, India and Germany’s relationship is marked by dynamic collaboration across multiple sectors. While challenges remain, the mutual benefits of a strengthened partnership—backed by strategic investments, cultural ties, and shared values—position India and Germany as pivotal players in an evolving global landscape.