New Delhi: After a hectic bilateral visit to Russia, it is time for Prime Minister Modi to host his German friend, Chancellor Olaf Scholz, who will be embarking on a three-day visit to New Delhi from October 24. The visit comes at a crucial time for Olaf, who is trying to revive the German economy, which has been pounded by the Ukraine war and China's increasing hegemony over the world economy.
The visit of the German Chancellor cannot be underestimated as it is seen as an attempt to reach out to India as an alternative to China especially when it comes to trade. Germany’s shift towards India in global supply chains reflects a broader strategy to step away from China.
This year, India and Germany are also celebrating the 50 years of Science and Technology Cooperation. Under this cooperation, both sides have taken up projects in several areas of global and emerging importance like space research, AI, sustainability, earth and environment sciences and advanced materials.
During his visit, Olaf Scholz will co-chair the 7th Intergovernmental Consultations, along with PM Modi, scheduled to be held on October 25-26.
The biennial IGC format was launched in 2011 and allows for a comprehensive review of cooperation and identification of new areas of engagement at the Cabinet level. India is among a select group of countries with which Germany has such a mechanism.
The IGC is a unique mechanism that India has with Germany. Under the IGC mechanism, the plenary co-chaired by our PM and German Chancellor Olaf Scholz is preceded by the meeting of focused verticals of ministers from both sides.
The 7th IGC is expected to have a strong technology focus with the key elements being sustainability and green transition, migration and mobility, and technology and innovation. Increased collaboration in new and emerging technologies is also expected, building on the India-Germany Vision Document released by the Chancellor and PM during the former’s State visit to India in 2023. In addition, the focus will also be on enhancing defence and security cooperation. At the 6th IGC held in Berlin on 02 May 2022, India and Germany signed many agreements focusing on green and sustainable development, green hydrogen, solar/renewable energy, agroecology, forest landscape restoration, etc.
The most significant outcome was the signing of the Green and Sustainable Development Partnership. Under this partnership, the German side has committed to provide new and additional funding of 10 billion Euros to India to achieve Paris Climate Goals and SDGs.
Germany wants skilled labourers from India
Germany has also announced a Skilled Labour strategy centred towards India recently, which aims at improving the mobility of skilled workforce from India to Germany to address the severe shortage of workforce in Germany.
This is the first country-specific strategy that Germany has unveiled in this regard. According to sources, Germany is keen to attract skilled labour from India, with the country already hosting 50,000 Indian students- the largest non-German group in its universities.
India as Germany's alternative to China?
Germany is one of India’s most important partners in the EU. Diplomatic relations were established between the two countries in 1951 and Germany and India have been Strategic Partners since 2000. Both countries have a shared interest in upholding democratic values, the rules-based international order, and multilateralism as well as the reform of multilateral institutions. Both sides are also deepening bilateral security and defence cooperation to jointly address global challenges.
The forthcoming visit of Chancellor Scholz for the 7th IGC will be his third visit to India as Chancellor. The PM and Chancellor Scholz have met seven times since 2022. The visit will also see significant progress in economic relations, with Scholz set to participate in the Asia-Pacific Conference (APK) of German Business.
India is the host country for the 18th APK to be held in New Delhi from October 24-26, 2024. The APK, a biennial event for business leaders, executives and political representatives from Germany and the countries in the Indo-Pacific, is expected to give a further fillip to trade and investment ties between our two countries. About 650 top business leaders and CEOs from Germany, India and other countries are expected to participate in the event.
Several institutional arrangements exist between India and Germany to discuss bilateral and global issues of interest. Both countries consult each other and coordinate positions in multilateral fora, including G20 and the UN and support each other on UNSC reforms within the framework of the G4.
India- German Defence Cooperation
According to govt sources, in addition to regular meetings of senior defence leadership of both countries, there has also been a significant rise in defence engagements over the last few years.
German Frigate Baden-Wuerttemberg and support ship Frankfurt am Main, deployed to the Indo-Pacific from May 2024, will carry out a joint exercise with the Indian Navy in India in the third week of October followed by a port call in Goa, for which Chancellor Scholz will also be visiting Goa. INS TABAR made a port call at Hamburg from July 17-20, 2024, and carried out a PASSEX with the German Navy’s Anti-Submarine Warfare Helicopter on August 4-5, 2024.
German Air Force participated in the first bilateral exercise Ex Tarang Shakti-1 with the Indian Air Force from August 8-13. As the 3rd and 5th largest economies respectively, Germany and India share a robust economic and development partnership. Germany is India’s largest trading partner in the EU. Trade touched an all-time high of USD 33.33 billion in 2023, a rise of 5.84% (as per figures from Destatis, the Federal Statistical Office of Germany).
Migration and mobility have also become a key element of India-Germany relations. There are approximately 2.5 lakh (December 2023) Indian nationals and persons of Indian-origin in Germany. At around 50,000, Indian nationals now account for the largest group of international students in German universities.
The Migration and Mobility Partnership Agreement with Germany was signed in December 2022. This is the first MMPA that Germany concluded with any country. According to the Ministry of External Affairs, Cumulative Foreign Direct Investments (FDI) from Germany to India was USD 14.5 billion from April 2000 to December 2023. More than 2000 German companies are active in India as per the Indo-German Chamber of Commerce.
It is worth noting that India and Germany are also working together on Triangular Development Cooperation, by pooling together strengths and experiences in development cooperation in third countries. Projects have been completed in the areas of Agriculture, women entrepreneurship, millet cultivation and post-processing.
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