Indo-German Relations

In News

• Recently, German Chancellor Olaf Scholz came to India on a bilateral visit.

About

• The German chancellor’s visit assumes significance as it coincides with the completion of one year of the Russia-Ukraine conflict and comes after the recent Chinese spy balloon episode that has created ripples in world geopolitics.
• During the visit  both countries had discussions on  economic cooperation, the Green and Sustainable Development Partnership (GSDP) and Indo-Pacific

Key outcomes of the bilateral meeting     

•  Green and Sustainable Development Partnership (GSDP):
  • GSDP is an umbrella partnership that provides political guidance and steer to robust ties in climate action and SDGs.
  • Under this, Germany will place €10 billion in new and additional commitments under their development cooperation portfolio in India.
• India-Germany agreed on a vision statement to Enhance Cooperation in Innovation & Technology.
  • Under the framework of the Inter-Governmental Agreement on ‘Cooperation in Scientific Research and Technological Development’, the two countries share a long history of cooperation in science and technology, research and innovation.
•  Cooperation in Green Hydrogen
  • For this, the Indo-German Green Hydrogen Task Force was constituted in September 2022 
•  Triangular Development Cooperation:
  • India and Germany agreed to work on development projects in third countries.      
• Both sides concluded agreements on “Digital Transformation, FinTech, IT, Telecom and Supply chains’ diversification”.

Indo- German Ties

• About:
  • India- Germany cooperation aims at benefiting humanity and is firmly guided by their shared democratic values and respect.
  • India?Germany relations rest on a very strong pillar of trade and investment linkages.
  • India and Germany have had a ‘Strategic Partnership’ since May 2000. This has been further strengthened with the launch of Intergovernmental Consultations (IGC) in 2011 .
  • The G4 nations (Brazil, Germany, India, and Japan) support each other’s bids for permanent seats on the United Nations Security Council.
• Trade and economic relations:
  • Germany is India’s largest trading partner in Europe, with a total trade of USD 21.07 Billion in 2020-21, occupying 17.4% of share in European Market.
  • Germany is the 7th largest foreign direct investor in India since April 2000. Germany’s total FDI in India from 2000 until 2019 amounted to US$ 11.9 billion.
  • Germany has a Bilateral Trade and Investment Agreement (BTIA) with India via the EU.
• Institutional Relationship:
  • The Intergovernmental Consultations (IGC) is a unique mechanism which brings together  ministers and officials from both sides, to engage in bilateral discussions on cooperation and partnership across a range of areas. The focus areas for the IGC included global security policy issues and common efforts to tackle the climate crisis.
    • During the last IGC in may 2022 following several agreements were signed
      • Green and Sustainable Energy Partnership
      • Agro-Ecology Cooperation
      • Triangular Development Cooperation Projects in Third Countries
  • A Track 1.5 Strategic Dialogue has also been established to enhance mutual understanding of national, regional and strategic interests.

• Defence co-operation:
  • India-Germany Defence Cooperation Agreement (2006) provides a framework for bilateral defence cooperation.
  • Both the countries signed the Arrangement on Implementation of the Agreement, concerning Bilateral Defence Cooperation which enables both the countries to share classified information with each other
  • Indian and German navy ships  regularly conduct anti piracy operations in the Indian ocean.
  • The first ever Franco-Indian-German military exercise is expected to take place in 2024.
• Science & Technology:
  • Bilateral Science and Technology cooperation is implemented under Inter-Governmental Agreement on ‘Cooperation in Scientific Research and Technological Development’. An apex Indo-German Committee on S&T, coordinates the implementation of activities.
  • The jointly funded Indo-German Science and Technology Centre (IGSTC) was set up in Gurgaon in September 2008.

Issues

• Germany’s low trade: Germany’s trade with India is less than ten percent of its trade with china.
• Restrictive Policies: Germany has an advanced defence manufacturing  comparable to that of france, but the defence exports are less than potential because of restrictive arms export policy
• Lack of a separate bilateral investment treaty between the two countries hampers the commercial potential between two countries. 
• Germany is not confident  about India’s trade liberalization measures, it bats for more liberal labour regulations.

Way Forward

• With more than 20% of German trade conducted in the Indo-Pacific neighbourhood and India’s centrality in the Indo-Pacific, strong ties between the countries are mutually beneficial.

Source:TH