India – Germany Relation

India- Germany Relation PDF

Germany’s minister’s visit coincided with the launch of an “oil price cap” plan by the G7 and European Union countries to withdraw shipping and insurance services to countries that buy Russian oil above the price of USD 60 a barrel.

Key Highlights of the Meeting

• India and Germany signed a Comprehensive Partnership on Migration and Mobility meant to ease travel for research, study and work for people in both countries.
  • It would be the “basis for a more contemporary partnership” in relations.
• The two sides held talks on bilateral issues, including Germany’s assistance to India on renewable energy and energy transitions, as well as international issues such as their Indo-Pacific strategy, and spoke about China, Afghanistan and Pakistan.

Oil Price Cap by the G7

• About
  • It is a plan by the G7 with the European Union and Australia to impose a price cap on Russian crude oil shipments, pegged at USD 60 a barrel for now.
  • The price cap is essentially aimed at preventing firms in signatory nations from extending shipping, insurance, brokering and other services to Russian crude oil shipments that are sold at any value above the designated per-barrel price i.e., USD 60 per barrel.
    • Since it came into effect on 5^th December 2022, the cap will only apply to shipments that are “loaded” onto vessels after the date and not apply to shipments in transit.
• India’s Stand:
  • Despite the United States-led sanctions on Russia post its invasion of Ukraine, India has decided to not just continue with, but also double its trade with Moscow in the “near foreseeable future”.
    • India’s consumption of Russian oil was just one-sixth of European consumption and should not be compared unfavourably, defending the government’s decision to increase its intake of Russian oil since the war in Ukraine.

Indian Diaspora

• There are about 7 lakh Indians and people of Indian origin in Germany.
• The Indian diaspora mainly comprises professionals, technocrats, businessmen/traders and nurses.
• There has been an increase in the last few years in the number of qualified Indian professionals in Germany in the fields of IT, banking, finance, etc.
• There are a number of Indian associations in Germany. Around 17,500 Indian students are pursuing various courses in Germany.

5^th Biennial Inter-Governmental Consultations

• Joint Declaration of Intent on the Indo-German Partnership on Green Urban Mobility under which Germany will provide additional finance of 1 billion euros.
• Dedicate a part of the 35 million euros under the framework of the bilateral call of the International Climate Initiative to grid expansion and storage systems for renewable energy and a part to forest landscape restoration.
• “Indo-German Partnerships on Higher Education” (IGP) was signed as part of the overall programme “A New Passage to India” to increase the number of Indian students studying in Germany.
• Both countries called for the cooperation of all countries in uprooting terror infrastructure and disrupting terrorist networks.
• Germany will facilitate the export of military equipment as well as technology sharing with India including maritime projects between the Indian and German naval industries (e.g. submarines).

Trade and economic relations

• Germany is India’s most important trading partner in the EU and its sixth most important trading partner worldwide.
• Since India embarked on a course of reform and opened up its economy in 1991, the volume of trade between the two countries has increased rapidly.
• Garments and textile products, chemical products, leather & leather goods, iron, steel and metal goods, electronic components, electrical components, pharmaceutical products, and auto components are major items of exports from India to Germany.
• The key German exports to India include electrical generation equipment, auto equipment, complete fabrication plants, bearings, gear equipment, measurement, and control equipment, primary chemical products, synthetic material, machine tools, aircraft and iron and steel sheets, etc.

India-Germany Defence and security relations

• India and Germany maintain an ongoing dialogue in the areas of commercial maritime security and cooperation in the field of anti-terrorism.
• An anti-piracy cooperation agreement between the two nations was signed in 2006.
• The Indian Navy and the German Navy conducted joint exercises in 2008 for the first time. In 2021, this joint exercise was carried out in the Gulf of Aden.
• Fighter jets from the German and Indian air services participated in the recent multinational military exercise “Pitch Black 2022” in Australia.

Cultural and educational cooperation

• Following the signing of an agreement between the two countries in 1956, Germany assisted in the establishment of the Indian Institute of Technology Madras and strengthened its cooperation, supply of technology, and resources over the years to assist in the institution’s expansion.
• Both nations established the Indo-German Science and Technology Centre in New Delhi to promote joint research and development in energy, environment, coal, and water technologies.
• India and Germany have signed an MoU regarding the teaching of the German language in Kendriya Vidyalaya schools in India and the reciprocal introduction of Sanskrit and modern Indian language in government schools in Germany.
• Apart from traditional sectors, knowledge-driven sectors hold good potential for collaboration in the fields of IT, ITES, biotechnology, auto components, renewable energy, green technology, urban mobility & development and the entertainment industry.
• Indo-German Science & Technology cooperation (IGSTC) started with the signing of the Intergovernmental S&T Cooperation Agreement in 1971 and 1974.
• Today, Germany is one of its most important global partners of India for S&T cooperation.

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.

Development Cooperation

• Germany has been an important development cooperation partner for several decades
  • Energy, sustainable economic development and environment & management of natural resources are priority areas
• Financial assistance from Germany is mainly as soft loan, composite loans or grants routed through the German Government’s Development Bank
• Major projects are in the sectors of energy (Renewables, Green Energy Corridor), Indo-German Solar Partnership, Skill Development and Sustainable urban development (water/sanitation/waste, climate-friendly urban mobility, smart cities).
• Germany supports India’s reform policies geared towards inclusive, regional and socially balanced growth.
  • As concrete steps in this direction Germany, in collaboration with Indian partner institutions, is actively supporting the development and strengthening of financial systems in rural areas, social policy instruments especially for the unorganised sector, and promotion of small and medium-sized enterprises as well as microfinance institutions.
  • In this framework, the German development cooperation is actively supporting the reform of rural cooperative banks implemented by the National Bank for Agriculture and Rural Development (NABARD).
  • It is also providing support for many aspects of the promotion of small and medium enterprises (SMEs) in collaboration with the Small Industries Development Bank of India (SIDBI).

The Future Ahead

• Presently, the Indo-German partnership somehow seems to lack the momentum to leap forward
  • It’s been on a springboard for a while and has much potential to fulfil.
  • In the current period, some re-engagement appears necessary. In this context, if some big ideas, which emerged between India and Germany, were to be successfully implemented, it could perhaps create a wider and deeper paradigm of Indo-German partnership.
• Collaboration in High-Speed Railways(HSR)
  • German technology is acceptable in India, its companies are well known, and there is no apparent commitment to using only Japanese technology for all HSR in India.
  • If the German proposal succeeds in a cost-effective manner, it could open business opportunities in six more HSR projects in India
• Efforts towards making Germany a reliable Defence Industry Partner
  • German Howaldtswerke-Deutsche Werft (HDW) submarines are in India.
  • Now Germany remains keen to provide the six API submarines required by the Indian navy. ThyssenKrupp Marine Systems is leading the German thrust to enhance the Indo-German partnership in defence production
  • The Indian Defence Ministry needs to consider this proposal, to further add considerable momentum to the Indo-German relationship
• Towards Multi-Polar World order
  • Amidst the policy uncertainties of the USA, and the regional dominance of China, both India and Germany could coordinate towards a win-win situation
  • Also, Post Brexit, Germany is an important player in European Union. Therefore, engaging Germany is not just about India’s bilateral relations with it. It is about collaborating with the Germany-led EU as a whole.