India, Germany to focus on strengthening economic cooperation

Ahead of German Chancellor Angela Merkel’s visit to New Delhi in October, India’s External Affairs Minister Sushma Swaraj is looking to firm up an ambitious agenda to expand economic and strategic ties with Europe’s most powerful economy. During Prime Minister Narendra Modi’s visit to Germany in April 2015, a joint statement issued at the end of the visit had said the two countries have established a robust roadmap for expanding their multi-faceted and mutually-beneficial ties and to further strengthen strategic partnership.

Ms Swaraj who is on a two-day visit to Germany as part of her two-nation visit to Egypt and Germany will hold talks with her German counterpart Frank Walter Steinmeier and a number of other leaders. India and Germany are expected to review their bilateral relationship and focus on expanding their economic relations.

In the joint statement issued between both countries during PM Modi’s visit to Germany, it was decided that both sides would collaborate in areas such as manufacturing, skill development, urban development, environment, railways and renewable energy.

Collaboration in manufacturing is expected to give thrust to the Make in India campaign. Skill development is expected to improve employability of trainees and apprentices. Establishment of a working group on urban development will strengthen bilateral cooperation and also support development of urban planning and infrastructure in India. The support for modernisation of railways infrastructure would help in the setting up of semi high-speed and high-speed railways. Germany is also expected to support India’s proposed objective of 175GW of renewable energy by 2022 through technical and financial support for developing comprehensive solar rooftop and green energy corridor projects in India.

Among the EU countries, Germany is India’s largest trading partner and is among the top 10 global trading partners. Germany is the seventh largest trade partner and eighth largest foreign investor in India. Bilateral trade between India and Germany stood at 15.96 billion euros as of 2014-2015, leading to a drop from the previous year. India’s exports to Germany rose marginally to 7.03 billion euros in 2014, its German imports dropped to 8.92 billion euros from 9.19 billion euros in the previous year, according to the Federal Statistical Office. The dip in trade was largely due to domestic and international factors. The eurozone crisis only added to the trade decline between both countries. German FDI in India in 2014 was to the tune of USD 1.15 billion. There are more than 1,600 Indo-German collaborations and over 600 Indo-German joint ventures in operation. Indian investments in Germany have also increased in the last few years. Indians have invested over USD 6 billion in Germany, mainly through mergers and acquisitions.

The negotiations for the ambitious India-EU free trade agreement could also figure among the talks.

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