India-Germany Relations are founded on common democratic principles and are marked by a high degree of trust and mutual respect.
India was amongst the first countries to establish diplomatic ties with the Federal Republic of Germany after the Second World War. Relations grew significantly following the end of the Cold War and the reunification of Germany.
In the last decade, both economic and political interaction between India and Germany has increased significantly. Today, Germany is amongst India’s most important partners both bilaterally and in the global context.
The history of Indo-German political relations goes back to the late nineteenth century, when the ‘Imperial German Consulate’ (Kaiserlich Detaches General consulate) started operating from Calcutta (now Kolkata).
However, it was only after WWII that diplomatic relations between the two countries gained prominence. India was the first country to end the state of war with Germany in 1951, and therefore was among the first countries to grant the Federal Republic of Germany diplomatic recognition.
Germany established its Consulate General in Bombay (now Mumbai) in 1951, leading to the establishment of a full fledged Embassy in New Delhi in 1952. In the same year, Germany’s first Ambassador arrived in Delhi and India’s first Ambassador took charge in Bonn.
Areas of Cooperation
India and Germany have a ‘Strategic Partnership’ since 2001, which has been further strengthened with the Intergovernmental Consultations (IGC) at the level of Head of Governments which allows for a comprehensive review of cooperation and identification of fresh areas of engagement.
India is amongst a select group of countries with which Germany has such a dialogue mechanism. The 4th IGC was held in Berlin on May 30, 2017 wherein 12 cooperation documents in various sectors were signed.
As strategic partners, India and Germany are committed to close coordination, bilaterally and with partners, in the G20, the United Nations and other multilateral for a, to address existing and emerging challenges to international security, global economic stability and growth.
4th Inter-Governmental Consultations
India keeps such a broad dialogue format at government level only with Germany. The 4th intergovernmental consultations had taken place in Berlin in May 2017.
The PM of India visited Germany to participate in the dialogue. At the consultations, India and Germany:
Emphasized their commitment to a stable, united, prosperous, pluralistic and peaceful Afghanistan.
Expressed their commitment to strengthen global non-proliferation efforts. Germany welcomed India’s accession to the Missile Technology Control Regime. Germany also welcomed India’s intensified engagement with the other export control regimes – the Nuclear Suppliers Group (NSG), Australia Group and the Wassenaar Arrangement – and expressed its support for India’s early accession to these regimes.
Reaffirmed the urgent need for a comprehensive reform of the UN Security Council, including its expansion in both permanent and non-permanent categories of membership.
Reiterated their full support to each other’s candidatures for a permanent seat in a reformed and expanded UN Security Council.
Attached particular importance to security, stability, connectivity and sustainable development of the blue economy in the Indian Ocean Region.
Underlined their common concern about the threat and global reach of terrorism and extremism.
Welcomed the cooperation in disaster management under the work plan agreed in the Joint Declaration of Intent signed between the two countries for cooperation on investing in creation of knowledge, expertise and information exchange.
Germany is India’s largest trading partner in Europe. India was ranked 24th in Germany’s global trade during 2016. Bilateral trade in 2016 was valued at 17.42 billion.
Apart from traditional sectors, knowledge driven sectors hold good potential for collaboration. The Indo-German potential for cooperation in areas of Manufacturing, Automobile, Telecom, and Eco-friendly technology, Chemicals, Pharma and Food Processing are huge.
Also, the German support to the Make-ln-lndia Initiative and acceptance to the transfer of technology scheme makes the German business prospects all the more lucrative in the Indian context.
Germany is the 7th largest foreign direct investor in India since January 2000.German FDI in India in 2016 was to the tune of US$ 1.1 billion. Germany’s total FDI in India from 2000 until 2019 amounted to US$ 11.9 billion.
In 2021 India imported €946M and exported €944M from Germany, resulting in a negative trade balance of €1.8M.
The top imports of India from Germany were Measuring and Automated control instruments (€74.3M), Other machinery (€71.5M), Machinery for electricity production, distribution (€65.4M), Aircraft (€57.9M), and Other prefabricated chemicals (€55.7M)
The top exports of India to Germany were Other prefabricated chemicals (€53M), Basic pharmaceutical products (€46.6M), Apparel of knitted or crocheted fabrics… (€43.2M), Chassis, bodies, engines etc. for motor… (€41.3M), and Other textile products (€36.8M).
There are more than 1600 Indo German collaborations and over 600 Indo-German Joint Ventures in operation.
For facilitating trade, a Fast-Track System for German companies has been operating in Department for Promotion of Industry and Internal Trade (DPIIT) since March 2016
India and Germany signed a Joint Statement in 2019 to set up a Fast-Track system for Indian Companies in Germany
To facilitate the entry of German Mittelstand (Medium Sized Companies) in India, the Embassy of India, Berlin runs the Make in India Mittelstand (MIIM) Programme since 2015.
In future, Germany’s role in reviving the India-EU free trade talks i.e Bilateral Trade and Investment Agreement (BTIA) will be very crucial.
Also, Germany has also agreed to intensify efforts for an early conclusion of an Investment protection agreement between the EU and India.
Science & Technology
Indo-German Science & Technology cooperation started with the signing of the Intergovernmental S&T Cooperation Agreement in 1971 and 1974
There are more than 150 joint S&T research projects and 70 direct partnerships between Universities of both countries.
India’s scientific establishments have close partnerships with German R&D institutions, including the Max Planck Society, Fraunhofer Laboratories and the Alexander von Humboldt Foundation.
Recently, Germany has announced new development commitments to the tune of more than EUR 1.2 billion (approx. INR 10,025 crore) to aid India’s fight against climate change and for cooperation on clean energy
India-Germany Defence Cooperation Agreement (2006) provides a framework for bilateral defence cooperation.
This agreement envisioned a close cooperation including the exchange and joint training of military personnel, development of joint Defence productions as well as increased technology transfer.
The defence dialogue mechanisms include High Defence Committee meetings at the level of Defence Secretaries. Both sides have had detailed discussions on defence cooperation during the visit of German Defence Minister to India in May 2015.
The Indo-Pacific, with India as its centrepiece, looms large in Germany’s and the European Union’s foreign policy.
The Indo-Pacific region is home to around 65% of the global population and 20 of the world’s 33 megacities.
The region accounts for 62% of global Gross Domestic Product (GDP) and 46% of the world’s merchandise trade.
It is also the source of more than half of all global carbon emissions which makes the region’s countries key partners in tackling global challenges such as climate change and sustainable energy production and consumption.
Germany and Indo-Pacific:
Germany is determined to contribute to buttressing the rules-based international order.
Within the German Indo-Pacific guidelines, India is mentioned for the enhancement of engagement and fulfilment of objectives. India should now be an important node while discussing issues relating to international security.
India is a maritime powerhouse and a strong advocate for free and inclusive trade — and, therefore, a primary partner for Germany (eventually the EU) on this mission.
Culture and Diaspora
There are around 1,69,000 people of Indian origin in Germany. The Indian diaspora mainly comprises of technocrats, businessmen/traders, and nurses.
There are a number of Indian organizations and associations active on business/cultural front, cementing ties between India and Germany at the people-to-people level.
India and Germany have a long tradition of academic and cultural exchange. Max Mueller was the first scholar of Indo-European languages who translated and published Upanishads and Rigveda.
There has been growing interest in Germany in Indian dance, music and literature as well as motion picture and TV industry, in particular Bollywood. Chancellor Merkel handed over the stolen Statue of Durga Mahishasurmardini to PM Modi at the 3rd IGC as a goodwill gesture.
German interest in the Indian philosophy and languages resulted in the first Chair of Indology at the University of Bonn in 1818. The Government of India has funded several rotating chairs of Indian studies in German Universities.
In 2022, India and Germany have signed a Comprehensive Partnership on Migration and Mobility meant to ease travel for research, study and work for people in both countries.
Sister City Arrangements
Some of the States and Cities of both countries have entered into twinning arrangements.
Karnataka and Bavaria (Germany) have Sister States arrangement since 2007. Similarly, Mumbai and Stuttgart (Germany) are sister cities since 1968.
In January 2015, Maharashtra and Baden-Wurttemberg (Germany) signed a MoU to establish a Sister State relationship.
Germany is one of India’s largest strategic partners and clean energy has been at the core of Indo German cooperation in the past few years.
During the visit of Chancellor of Germany to India in 2015, both the countries agreed on the Indo-Germany Climate and Renewable Alliance – a partnership to harness technology, innovation and finance in order to make affordable, clean and renewable energy accessible to all and foster climate change mitigation efforts.
Germany has pledged $2.25 billion for India’s Green Energy Corridor and solar projects.
Both countries will intensify their ongoing cooperation on climate and renewable technology under the new Indo-German Climate and Renewable Alliance, including on:
Next generation solar technology;
Renewable energy storage;
Climate-friendly space cooling technologies;
Super-efficient appliances and buildings;
Zero emission passenger and freight vehicles;
Energy-efficient rail and water infrastructure;
Off shore wind power.
India has signed a Memorandum of Understanding (MoU) with Germany on April 13, 2016 to clean Ganga. The agreement will allow Indo-German knowledge exchange on strategic river basin management issues, effective data management system and public engagement. In August 2018, Germany has announced a soft loan of Euro 120 million to India to help clean Ganga.
Significance of Germany to India
Germany is the largest economy in Europe with a 28% share of Euro area economy. It is one of the largest exporters of the world. German product commands a great respect and confidence in terms of quality around the world.
Currently, Germany is one of the largest foreign direct investors in India, with around 1,800 German companies operating in India.
Germany’s prime location in Europe which connects its borders with every major economy in central Europe , providing instant access to both established markets in Western Europe and emerging markets in Central and Eastern Europe;
India needs cooperation of Germany in developing its own domestic Defence industry that will help India to become self-sufficient in this industry.
Germany’s support and cooperation is vital for the success of initiatives such as Smart City, Make in India, Swaccha Bharat, and Solar Mission, etc.
Germany’s extensive work in skill development, which has set the standards globally, can benefit the youth of India.
India is giving an impetus to next-generation infrastructure and this is an area in which we want to work extensively with Germany.
On issues of terrorism, extremism and stability of Afghanistan, India needs Germany’s support to protect its interest.
Significance of India to Germany
India provides a market and destination for Germany’s exports and investments.
India is endowed with rich mineral and agricultural resources, thereby reducing the input costs of German manufacturing sector.
There are opportunities for German companies in India’s infrastructure, defence sectors, railways, smart cities, renewable energy, ports and shipping, coastal shipping and inland waterways.
India’s massive young workforce can be a solution to Germany’s aging population and manpower. India can provide skilled manpower at low cost.
India is one of the largest Defence equipment purchasers in the world providing a market to German Export industries.
Challenges in Relations
Since 2000, India has not been very dependent on extensive relations with Germany, as the former Soviet Union dominated Indian bilateral relations to a large extent
As the world changed in the early 1990s, India reacted promptly and adapted well to the new situation, whereas Germany did not realize the opportunities vested in trade, science and technology and defence cooperation with India, and instead concentrated on the People’s Republic of China.
The relation between Germany and India as a whole are somewhat dysfunctional and unable to move forward
Core documents overtly focus on close economic relations; while cooperation in other fields offer little more than a forum for the exchange of ideas and best practices rather than focussing on substance
Also, India has “flown” under the radar of many German politics
What is mostly amiss is a continuous strategic interaction at various levels, states, civil society, parliamentarians
Also, Germany is expressed concerns about Kashmir lockdown and the rights of minorities in India and has begun to cast a shadow over the “shared political values” (freedom and the rights of minorities) with India
India and Germany have no formal bilateral trade agreement. However, an India-Germany Bilateral Investment Treaty lapsed in March 2017 and negotiations over a fresh trade agreement with the Europe Union have been creeping along at snail’s pace since 2007.
Germany has a Bilateral Trade and Investment Agreement (BTIA) with India via EU, it does not have the competence to negotiate it separately.
Although German technology and weapon systems are highly sophisticated, there are a few limitations. The existence of very restrictive regulations for export of weapons from Germany, and hi-tech weapon systems being expensive are some of the limitations.
Strengthening Indo-German Relations:
Germany views India as an important partner for resolving global issues, including climate change, food security, energy and international peace and security.
Also, the new coalition government formed in Germany offers an opportunity for India to strengthen the strategic partnership between the two.
Germany is keen to implement connectivity projects, through the European Union, to counter China. The coalition sees the conclusion of an India-EU BTIA as an important aspect that will help develop relations.
Scope of Economic Cooperation:
India and Germany must realise the cooperative goals of the Intellectual Property guidelines and must involve businesses.
German companies must be encouraged to use the liberalised Performance Linked Incentive scheme to establish manufacturing hubs in India.
Germany has committed 250 million euro in loans to Africa for a vaccine production facility, if implemented with India such a facility can be established in the underserved East African region.
Sharing Responsibilities in the Indo-Pacific Region:
As much as India, Germany is a trading nation. More than 20% of German trade is conducted in the Indo-Pacific neighbourhood.
This is why Germany and India share a responsibility to maintain and support stability, prosperity and freedom in this part of the world. Both India and Europe’s key interests are at stake when championing a free and open Indo-Pacific.
Today, in spite of various setbacks, the Indo-German relations have made a rapid stride. The ‘policy of benign neglect’ had changed into a more ‘vibrant partnership’.
Indo-German cooperation should be based on a win win situation so that both countries can help each other in improving their economic, technological, defence and political position in the international arena. This is not a difficult task as Germany are India are “natural allies”. While Germany has surplus capital, modern technology and a demographic deficit, India has a deficit of capital, lacks modern technology and has exportable human capital.
G4 Nations (Group of Four Countries)
The G4 nations, comprising Brazil, Germany, India, and Japan, are four countries which support each other’s bids for permanent seats on the United Nations Security Council.
Unlike the G7, where the common denominator is the economy and long-term political motives, the G4’s primary aim is the permanent member seats on the Security Council. Each of these four countries have figured among the elected non-permanent members of the council since the UN’s establishment.
The G4 nations traditionally meet on the sidelines of the annual high-level UN General Assembly session.