India-Germany Relations | UPSC Notes

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India-Germany Relations | UPSC Notes

• India and Germany have good relations because they both believe in democracy and trust and respect each other a lot.

• India was one of the first countries to have formal relations with the Federal Republic of Germany.

when the war was over. After the end of the Cold War and Germany’s reunification, things got a lot better.

• Both business and political ties between India and Germany have grown a lot in the last ten years. Germany is one of India’s most important friends in the world and between the two countries.

Background

• The history of government ties between India and Germany goes back to the late 1800s.

From Calcutta, the “Imperial German Consulate” (Kaiserlich Detaches General consulate) began to work.

• But it wasn’t until after World War II that political ties between the two countries became important. India was the first country to stop being at war with Germany in 1951. Because of this, it was one of the first countries to give formal recognition to the Federal Republic of Germany.

• In 1951, Germany opened a Consulate General in Bombay, which is now called Mumbai. This led to the opening of a full-fledged Embassy in New Delhi in 1952. In the same year, Germany sent its first ambassador to Delhi, and India sent its first ambassador to Bonn.

Areas of Cooperation

Political

Strategic Partnership

• India and Germany have had a “Strategic Partnership” since 2001. This relationship has been improved by the Intergovernmental Consultations (IGC) at the level of Heads of Government, which allow a full review of cooperation and the finding of new ways to work together.

• India is one of only a few countries with which Germany has this kind of way to talk. On May 30, 2017, the 4th IGC was held in Berlin, and 12 agreements to work together in different areas were made.

• As key partners, India and Germany have agreed to work closely together, both on their own and with other countries in the G20, the UN, and other multilateral organisations, to deal with current and new threats to international security, global economic stability, and growth.

4th Inter-Governmental Consultations

• India only talks with Germany in such a broad way at the government level. In May 2017, the 4th round of talks between governments took place in Berlin.

• The Indian Prime Minister went to Germany to take part in the discussion. During the talks, India and Germany:

They stressed that they want Afghanistan to be stable, united, wealthy, diverse, and peaceful.

Said they would work harder to stop the spread of nuclear weapons around the world. India joining the Missile Technology Control Regime was good news for Germany. Germany also liked that India was getting more involved with the Nuclear Suppliers Group (NSG), the Australia Group, and the Wassenaar Arrangement, and it said it wanted India to join these groups as soon as possible.

Reiterated that the UN Security Council needs to be completely reformed as soon as possible. This includes adding more regular and non-permanent members.

Reiterated their full support for each other’s bids for a permanent seat on a revamped and larger UN Security Council.

Security, safety, connectivity, and the sustainable growth of the blue economy in the Indian Ocean Region were given special attention.

They both talked about how worried they were about the threat of terrorism and extremism and how far it could stretch.

The two countries signed a “Joint Declaration of Intent” to work together on investing in the creation of knowledge, expertise, and information sharing. The two countries also agreed to work together on disaster management as part of the work plan.

Economic

• India’s most important trade partner in Europe is Germany. In 2016, Germany’s trade with the rest of the world put India at number 24. In 2016, trade between the two countries was worth $17.42 billion.

• Besides traditional industries, knowledge-driven industries have a lot of promise for working together.

India and Germany have a lot of ways they could work together in areas like manufacturing, automobiles, telecommunications, green technology, chemicals, pharmaceuticals, and food processing.

• The fact that Germany backs the Make-in-India Initiative and agrees to the sharing of technology makes German business opportunities in India even better.

• Since January 2000, Germany has been the seventh biggest direct investor from outside India. In 2016, German FDI in India was worth US$ 1.1 billion. From 2000 to 2019, Germany’s FDI in India was worth a total of US$ 11.9.

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• In 2021, India bought €946 million from Germany and sent €944 million to Germany. This gave India a negative trade balance of €1.8 million.

Measuring and automated control instruments (€74.3M), other machinery (€71.5M), machinery for making and distributing power (€65.4M), aircraft (€57.9M), and other pre-made chemicals (€55.7M) were the top five things India bought from Germany.

Other pre-made chemicals (€53M), basic pharmaceutical products (€46.6M), clothing made from knitted or crocheted fabrics (€43.2M), chassis, bodies, engines, and other parts for motor vehicles (€41.3M), and other textile products (€36.8M) were the top things India sent to Germany.

• There are more than 1,600 Indo-German partnerships and more than 600 Indo-German joint ventures.

• Since March 2016, German companies have been able to use the Fast-Track System at the Department for the Promotion of Industry and Internal Trade (DPIIT). This helps make trade easier.

• India and Germany signed an agreement in 2019 to set up a fast-track method for Indian companies in Germany.

• The Make in India Mittelstand (MIIM) Programme has been run by the Embassy of India in Berlin since 2015 to make it easier for German medium-sized companies to do business in India.

• In the future, it will be very important for Germany to play a big part in getting the India-EU free trade talks, called the Bilateral Trade and Investment Agreement (BTIA), back on track.

Germany has also agreed to work harder for an Investment Protection Agreement between the EU and India to be signed as soon as possible.

Science and Technology

• Science and technology cooperation between India and Germany began in 1971 and 1974, when the Intergovernmental S&T Cooperation Agreement was signed.

• There are more than 150 joint S&T study projects and 70 direct partnerships between universities in both countries.

The Max Planck Society, Fraunhofer Laboratories, and the Alexander von Humboldt Foundation are some of the German R&D institutions that work closely with India’s science institutions.

• Recently, Germany said it would spend more than EUR 1.2 billion (about INR 10,025 crore) on new development projects to help India fight climate change and work together on clean energy.

Defence

• The India-Germany Defence partnership Agreement from 2006 sets up a framework for defence partnership between the two countries.

• This agreement called for close cooperation, such as the exchange and joint training of military personnel, the creation of joint defence products, and more information sharing.

• The ways to talk about security include meetings of the High security Committee, which is made up of Defence Secretaries. During the visit of the German security Minister to India in May 2015, both sides talked in depth about how they could work together on security.

Indo-Pacific Region

• India is at the heart of the Indo-Pacific, which is a big part of Germany’s and the EU’s foreign policy.

• About 65% of the world’s people and 20 of the world’s 33 largest towns live in the Indo-Pacific region.

• This area makes up 62% of the world’s Gross Domestic Product (GDP) and 46% of the world’s trade in goods.

• It is also the source of more than half of the world’s carbon emissions. This makes the countries in the area important partners in dealing with global problems like climate change and making and using energy in a sustainable way.

• The Indo-Pacific and Germany:

Germany wants to help strengthen the world order that is based on rules.

India is listed in the German Indo-Pacific guidelines as a way to improve engagement and reach goals. India should now be a very important place to talk about foreign security issues.

India is a maritime powerhouse and a strong supporter of free and open trade. Because of this, it is Germany’s (and later the EU’s) main partner in this mission.

Culture and Diaspora

• There are about 1,69,000 people in Germany who are from India. Most of the people in the Indian community are technocrats, businessmen/traders, and nurses.

• There are a number of Indian organisations and groups that work on the business and cultural fronts to strengthen ties between the people of India and Germany.

• Academic and cultural contact between India and Germany has been going on for a long time. Max Mueller was the first scholar of Indo-European languages to translate and print the Upanishads and the Rigveda.

• People in Germany are becoming more interested in Indian dance, music, writing, films, and TV shows, especially Bollywood. As a sign of good will, Chancellor Merkel gave PM Modi the stolen Statue of Durga Mahishasurmardini at the 3rd IGC.

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• The first Chair of Indology was set up at the University of Bonn in 1818 because Germans were interested in Indian thought and languages. The government of India has paid for a number of chairs in German universities that focus on Indian studies.

• In 2022, India and Germany will have signed a deal called the Comprehensive Partnership on Migration and Mobility. This will make it easier for people in both countries to journey for research, study, and work.

Sister City Arrangements

• Some cities and states in both countries have made agreements to work together.

Since 2007, Karnataka and Bavaria, which is in Germany, have been “Sister States.” Since 1968, Mumbai and Stuttgart, Germany, are also sister towns.

• In January 2015, Maharashtra and Baden-Wurttemberg, which is in Germany, signed a Memorandum of Understanding to become Sister States.

Cooperation on the environment

• Germany is one of India’s most important strategic partners, and the two countries have been working together closely on clean energy for the past few years.

• When the Chancellor of Germany went to India in 2015, the two countries agreed to form the Indo-Germany Climate and Renewable Alliance, which is a partnership to use technology, innovation, and money to make clean, affordable, renewable energy available to everyone and help fight climate change.

• Germany has promised to give $2.25 billion to India for solar projects and the Green Energy Corridor.

• The new Indo-German Climate and green Alliance will make it easier for both countries to work together on climate and green technology.

Solar power for the next generation;

 Renewable energy storage;

Technology for cooling area that is good for the environment;

Appliances and houses that are very energy efficient;

Passenger and goods cars with no emissions;

Infrastructure for train and water that uses less energy;

Wind power off the coast.

• On April 13, 2016, India and Germany signed a Memorandum of Understanding (MoU) to clean up the Ganges. The agreement will let India and Germany share what they know about managing strategic river basins, making a good data management system, and getting the people involved. Germany said in August 2018 that it would give India a soft loan of 120 million Euros to help clean up Ganga.

How important Germany is to India

• With a 28% share of the Euro area economy, Germany has the biggest economy in Europe. It is one of the world’s biggest producers. When it comes to quality, people all over the world respect and trust German products a lot.

• Right now, about 1,800 German companies are doing business in India. This makes Germany one of the biggest foreign direct investments in India.

• Germany’s central location in Europe, which makes it easy to reach both established markets in Western Europe and new markets in Central and Eastern Europe;

• India needs Germany’s help to build up its own defence business, which will help India become self-sufficient in this field.

• Initiatives like Smart City, Make in India, Swaccha Bharat, Solar Mission, etc., can’t work without Germany’s help and cooperation.

• The kids of India can learn from Germany’s work in skill development, which has set standards around the world.

• India is helping to build infrastructure for the next generation, and this is an area where we want to work closely with Germany.

• India needs Germany’s help to protect its own interests when it comes to terrorism, extremism, and the security of Afghanistan.

How important India is to Germany

• India is a place where Germany can sell its goods and spend its money.

• India has a lot of mineral and agricultural resources, which lowers the cost of raw materials for the German manufacturing industry.

• There are business possibilities for German companies in India’s infrastructure, defence, railways, smart cities, renewable energy, ports and shipping, coastal shipping, and inland waterways.

• India’s large number of young workers could help Germany with its ageing population and labour force. India can offer trained workers at a low price.

• India is one of the biggest buyers of defence equipment in the world, giving German export companies a place to sell their goods.

Challenges in Relations

• Political:

Since 2000, India has been less reliant on its close ties with Germany. This is because India’s bilateral relations were controlled by the former Soviet Union for a long time.

As the world changed in the early 1990s, India responded quickly and did a good job of adjusting. Germany, on the other hand, did not take advantage of the opportunities in trade, science and technology, and military cooperation with India. Instead, it focused on the People’s Republic of China.

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Overall, the relationship between Germany and India is a bit broken and can’t move forward.

Core papers put too much emphasis on close economic ties, while cooperation in other areas is mostly just a place to share ideas and best practises and not much else.

India has also “flown” under the notice of a lot of German politicians.

o Most of what’s wrong is that there isn’t enough strategic interaction between states, civil society, and lawmakers.

Also, Germany is worried about the lockdown in Kashmir and the rights of minorities in India. This is putting a cloud over the “shared political values” (freedom and the rights of minorities) that Germany and India have.

• Economical:

India and Germany do not have an official trade deal between the two countries. But a Bilateral Investment Treaty between India and Germany ended in March 2017, and talks about a new trade deal with the European Union have been going slowly since 2007.

o Germany has a Bilateral Trade and Investment Agreement (BTIA) with India through the EU. It does not have the power to negotiate it directly.

• German technology and military systems are very advanced, but they have a few problems. Some of the problems with exporting guns from Germany are that the rules are very strict and that high-tech weapon systems are expensive.

Way Forward

• Improving relations between India and Germany:

Germany sees India as an important partner in solving world problems like climate change, food security, energy, and peace and security on the international level.

Also, Germany’s new coalition government gives India a chance to strengthen the strategic relationship between the two countries.

Germany wants to work with the European Union to build projects that connect people and places to fight China. The coalition thinks that signing a BTIA between India and the EU is an important step that will help improve ties.

• The Scope of Economic Cooperation:

India and Germany need to work together to reach the Intellectual Property guidelines’ goals, and companies need to be involved.

German companies should be urged to use the Performance-Linked Incentive programme, which has now been made more flexible, to set up manufacturing hubs in India.

Germany has promised to lend Africa 250 million euros to build a place to make vaccines. If this plan is carried out with help from India, this place could be built in East Africa, which needs it the most.

• Responsibility Sharing in the Indo-Pacific:

Germany trades just as much as India does. In the Indo-Pacific area, Germany does more than 20% of its business.

o Because of this, Germany and India both have a duty to help keep peace, wealth, and freedom in this part of the world. When India and Europe work for a free and open Indo-Pacific, their most important goals are at stake.

Conclusion

• Even though there have been some setbacks, Indo-German ties are moving forward quickly today. A more “vibrant partnership” had replaced the “policy of benign neglect.”

• Indo-German cooperation should be built on a win-win situation so that both countries can help each other improve their economic, technological, defence, and political positions in the international arena. This is not hard to do because India and Germany are “natural allies.” Germany has too many people and not enough money, but it has modern technology and a population glut. India, on the other hand, has too few people and not enough money, but it has human capital that can be exported.

Group of Four Nations (G4 Nations)

• Brazil, Germany, India, and Japan make up the G4 nations. These are four countries that help each other get permanent places on the UN Security Council.

• The main goal of the G4 is to get permanent member places on the Security Council. This is different from the G7, whose main focus is on the economy and long-term political goals. Since the UN was founded, each of these four countries has been one of the non-permanent members of the council that has been chosen by the people.

• The G4 countries usually meet on the sidelines of the yearly high-level session of the UN General Assembly.