Germany’s Relationship with India

General Studies Paper -2

Context: Germany has granted a licence to India to purchase small arms from German companies.

About India-Germany Relations

• Diplomatic: Germany is one of India’s most important partners in Europe.
  • India was also among the first countries to establish diplomatic ties with the Federal Republic of Germany after the Second World War.
• Strategic Partnership: India and Germany have a ‘Strategic Partnership’ since May 2000, which has been further strengthened with the launch of Intergovernmental Consultations (IGC) in 2011 at the level of Heads of Government which allows for a comprehensive review of cooperation and identification of new areas of engagement.
• High-level Engagements : There are regular high-level contacts between India and Germany. PM and Chancellor meet regularly for bilateral meetings and on the sidelines of multilateral meetings
  • India is among a select group of countries with which Germany has such a dialogue mechanism.
• Multilateral Cooperation : Germany and India support each other on UNSC reforms within the framework of the G4.
  • Germany joined the Coalition for Disaster Resilient Infrastructure (CDRI) in February 2020 and participated in the first Governing Council meeting in March 2020.
  • In April 2021, the German Federal Cabinet approved the signing of the amended framework agreement of the International Solar Alliance (ISA), confirming Germany’s accession
• Economic & Commercial Relations : Germany is currently the 12th largest trading partner for India in 2022-23.
  • It was India’s 11th largest trading partner in 2021-22 and 7th largest trading partner in 2020-21.
  • India constitutes about 1% of Germany’s total foreign trade in 2022.
  • Major Indian exports to Germany include electrical products and automobiles/auto components, textile and garments, chemicals, pharma, metal/metal products, food/beverages and tobacco and leather/leather goods.
  • Major exports to India include machinery automobiles/auto components, chemicals, data processing equipment, and electric equipment
• Germany is the 9th largest foreign direct investor in India (8th largest in 2021-22) with a cumulative FDI in India of US$ 14.1 bn. from April 2000 to March 2023.
• Bilateral Cooperation : Important bilateral agreements between India and Germany are the Agreement on Avoidance of Double Taxation (DTAA), which came into force in 1996, and the Comprehensive Agreement on Social Security, which entered into force from May 2017
  • The Indo-German Energy Forum (IGEF) has been promoting cooperation in the priority areas of energy security, energy efficiency, renewable energy, investment in energy projects and collaborations in R&D, taking into account the environmental challenges of sustainable development.
• Science & Technology : Bilateral Science and Technology cooperation is implemented under an Inter Governmental Agreement on ‘Cooperation in Scientific Research and Technological Development’ signed in 1974
  • The IndoGerman Committee on S&T, established in 1994 coordinates the implementation and reviews joint activities.
• Culture : The longstanding cultural relations between India and Germany are strengthened by the cultural and intellectual exchanges between the two countries. The study of Indian literature, especially Vedas and Upanishads, and also translation of famous works from Sanskrit to German language significantly contributed to the better understanding of India.
  • The visit of Nobel Laureate Gurudev Rabindranath Tagore to Germany in 1921, 1926 and 1930 bridged cultural and intellectual exchange between India and Germany, further supported by established networks in socio-cultural fields.
• Indian Diaspora : There are around 2.20 lakh (December 2022) Indian passport holders and Indian-origin people in Germany.
  • There has been a significant in the number of qualified and highly skilled Indian professionals in the fields of IT, banking, finance, etc
• Defence: Germany has significantly simplified the licensing requirements for the sale of military equipment to India.
  • Germany granted a small arms licence to India. which is a huge exception.
    • Germany for some time has had a bar on the sale of small arms to third countries with the exception of European Union member states, NATO (North Atlantic Treaty Organisation) countries and NATO-equivalent countries (Australia, Japan, New Zealand and Switzerland).
  • The German government has also eased the approval process for defence purchases by India.
  • India has an inventory of MP5 submachine guns manufactured by Heckler & Koch.
  • Germany has also approved the offer of a tank engine and propulsion system for India’s indigenous light tank project.
  • In August 2024, the Indian Air Force (IAF) is scheduled to hold the multilateral exercise Tarang Shakti, in which the German Air Force would be joining other countries like the U.K, France, and Spain.