Indo-German relations

Syllabus: General Studies Paper 2

Context:

Germany has voted for a change. Germany’s centre-left Social Democrats (SPD) have claimed victory in the federal election, telling the party of outgoing Chancellor Angela Merkel it should no longer be in power. Angela Merkel was Chancellor for 16 years — from 2005 to 2021.

Impact of Angela Merkel on Europe and world

• Merkel broke the glass ceiling to become the first woman Chancellor from the conservative party and was kept in the post by a combination of political, economic, and social factors. 
• As a strong export-based economy, Germany under Merkel outperformed France, the UK, Spain, and Italy in Europe, and posted robust exports behind only China and the US.
• During her tenure, unemployment in Germany came down by an order of 3 million, and 5 million more people got jobs. 
• The financial crisis of 2008 was followed by the Eurozone crisis. Germany paid the largest amount in the EU’s first bailout of Greece in 2010. 
• In 2015, the refugee crisis swamped Europe, and Merkel pushed to take in the swelling numbers who landed on European shores. 
• Germany chose to go ahead with the controversial Nord Stream 2 pipeline to supply gas to Europe.

India’s bilateral relationship with Germany under Merkel

Since the inauguration of the India-Germany strategic partnership in 2001, relations have grown in a robust manner. 

• India is one of the few countries with which Germany holds Cabinet-level Intergovernmental Consultations (IGC).  The IGC is a unique broad-format dialogue chaired by both leaders with members of the Cabinet from the two sides holding initial discussions in their respective areas of responsibility.
• They signal growing political engagement and economic partnership that has led to strong institutionalised arrangements to discuss bilateral and global issues.
• Although trade and investment have been at the heart of the bilateral engagement, the IGC has expanded its scope to artificial intelligence and digital transformation and pushed forward the ‘Make in India Mittelstand’ programme. 
• Other areas of cooperation include science and technology, sustainable energy, smart cities, and circular economies.

Significance of Indo-German relations

• Tackling slowdown: As both countries are together reeling under slowdown, both can find ways to further collaborate and converge to find sustainable and effective solutions. 
• India stands to gain from Germany as Germany is an economic powerhouse just as Germany stands to gain because she is a promising market that is growing and developing. 
• High end manufacturing: Germany is famous for internationally acclaimed high-end brands like Daimler, Siemens etc.. India is an obvious choice for German companies due to the availability of potential markets and talent pools.
• Renewable sector: 

• India and Germany have signed an agreement on technical cooperation under the Indo-German Energy Programme – Green Energy Corridors (IGEN-GEC).
• Germany also provides a loan of 7 million euro for training activities in the photovoltaic solar rooftop sector.

• Post-Brexit scenario: The kind of Europe that emerges post-Brexit is critical for India. Thus, we need to have a very good economic relationship with Germany as well as France in the post Brexit era.
• Germany’s role in reviving the India-EU free trade talks : 
  • India has made a special appeal to Merkel to take the lead in this context. 
  • India had called off talks when the EU banned 700 Indian pharma companies from exporting to the EU because one company was found wanting on quality standards.

Way Forward

• Manufacturing reforms: Taking measures to upgrade the technological capacity of its manufacturing sector and quality of its scientific establishment.
• Embracing International Standards and Certifications: This can strengthen the competitiveness of the Indian industry and support the integration of India in global and regional value chains
• German investment: Germany can invest in smart cities; modernization of railway networks and stations to setting up of high-speed rail corridors; generation of renewable energy to the construction of transmission and distribution networks.

• Digital India: German and Indian digital companies should jointly work towards further enhancing the scope of market opportunity and bilateral investments in each other’s countries and creating greater bonds between their thriving tech ecosystems. 

The Indo- German partnership is not a zero-sum game and is based on shared values and interests. However, India needs to be aware of the changes in Germany’s external engagement profile and focus on enhancing its own engagement with Germany by exploring every avenue to add greater depth to bilateral relations.

The Indian Express Link:

https://indianexpress.com/article/explained/angela-merkel-germany-elections-defeat-india-relations-7538279/

Question: India and Germany can benefit from common challenges and mutually desired goals. Comment.