INDIA - GERMANY RELATIONSHIP – INTERNATIONAL
News: Submarine
deal with India could become a flagship project, says German Defence Minister
What is in the news?
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Recently, India and
Germany discussed the progress of a deal for the procurement of six advanced
conventional submarines by the Indian Navy under Project-75I.
○ Defense
minister invites German companies to invest in Uttar Pradesh and Tamil Nadu
defense corridors and bring Indian firms into the picture to strengthen their
supply chain.
Evolution of India - Germany relationship in recent
years:
1. Trade relations:
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Germany is India’s
largest trading partner in Europe.
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The bilateral trade value between India and Germany is 25 bn $.
2. Investment:
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Germany is the 9th largest
foreign investor in India.
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Total
cumulative investment by Germany in India is 13bn $.
3. Defense relations
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Germany is India's fifth largest defense exporter.
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The two countries have
discussed co-development of military hardware and tech transfers, and a deal
worth $5.2 billion where Germany would jointly build six conventional
submarines in India could be underway.
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The first ever France-India-Germany military exercise drill is slated
to take place in 2024 towards enhanced security and defense collaboration.
4. UNSC reforms:
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Multilaterally, India and
Germany share close cooperation in the G4
where both states cooperate to strengthen the multilateral system and bring
about a reform of the United Nations
including an expansion of the UN Security Council.
5. Stand in Indo Pacific:
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India and Germany share
common interests with regard to a free
and open Indo-Pacific and maintaining a multilateral order.
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The German Indo-Pacific guidelines of 2020 identifies India as one of
Germany’s most important partners in the region.
6. Cultural relations:
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Germany actively engaged
with India in sectors like health, education.
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One of the key
initiatives taken during the 2019
Intergovernmental Consultations was the Indo-German Partnership programme,
which involved investments of 3.5 million euros from each country and would
focus exclusively on strengthening the bilateral cooperation in the field of
higher education in 2020-2024.
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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.
7. Climate change:
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Both countries will
intensify their ongoing cooperation on climate and renewable technology under
the new Indo-German Climate and
Renewable Alliance.
Issues:
1. Tighter licensing requirements:
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India asked Germany to
relax some of their licensing requirements for export of spares and components
under BAFA [Federal Office for Economic Affairs and Export Control].
2. Russia factor:
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India’s
continued import of Russian fuel and refusal to renege on
its neutral position in Russia’s Ukraine war has been a matter of irritation to
the West.
3. Germany’s economic dependence on China:
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Germany has strong
economic ties with China, making it difficult to completely decouple from the
country. This creates a challenge for Germany in trying to balance its economic
interests with its security interests.
4. Human rights issues:
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Germany has 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.
Measures taken to strengthen the relationship:
1. Make in India Mittelstand:
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The Make in India
Mittelstand (MIIM) Programme was launched in 2015 to facilitate the entry of
German micro, small, and medium enterprises (MSMEs). Currently, 135 MSMEs are being facilitated through the MIIM Program.
2. German India Startup Exchange Program:
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In 2018, India and
Germany also launched the German India
Startup Exchange Program (GINSEP), a non-monetary platform set up to foster
Indo-German economic relations in the start-up
sector.
3. Work Plan 2023:
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This plan covers a range
of topics, including global harmonization solutions and sector-specific
cooperation in areas such as artificial
intelligence, cybersecurity, circular economy, and smart farming.
4. Consultative committee:
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Setting up consultative
committees to work on common areas of
interest- trade, technology, green energy, education and health could be a
useful mechanism in strengthening the relationship.
5. Sister city agreement:
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Some of the States and
Cities of both countries have entered into twinning arrangements.
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In
January 2015, Maharashtra and Baden-Wurttemberg (Germany) signed a MoU to
establish a Sister State relationship.
WAY FORWARD:
1. Free trade agreement:
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Bilateral trade value is 24 bn $ only. India can take
initiative to create free trade agreements to increase the bilateral trade
value.
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The
bilateral trade value between China and Germany is over 100bn $.
2. Create manufacturing hubs:
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German
companies must be encouraged to use the liberalized
Performance Linked Incentive scheme to establish manufacturing hubs in India.
3. Critical technologies:
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Both countries can deepen
their relationship in the critical technologies sector, which will be useful
for India.
4. Solving human rights issues:
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India also should take
measures to improve the human rights in the country, which is constantly prioritized by Germany.
5. Greater security engagement:
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Bilateral defense exercises can be started to
increase the cooperation between the defense sectors.
6. Climate change:
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Global warming and
climate change can be a better platform to improve their relationship.
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Germany as a developed
country can invest in India to mitigate climate change consequences.