Are India's ties with Russia an issue for Merz as he meets Modi? | DW News

Key Concepts

• Germany-India Partnership: Growing strategic and economic relationship driven by mutual needs – Germany’s skilled labor shortage and India’s talent pool, and diversification of trade partnerships.
• Diversification of Partnerships: Germany’s shift away from over-reliance on China and towards strengthening ties with India and other partners.
• Skilled Labor Migration: Increasing trend of young Indians seeking vocational training and employment in Germany.
• EU-India Trade Deal: Long-negotiated free trade agreement poised for potential signing, aiming to boost economic ties and uphold free trade principles.
• India’s Foreign Policy Nuances: India’s balancing act of maintaining relationships with multiple global powers, including Russia, while diversifying partnerships.

Germany’s Strategic Shift: Strengthening Ties with India

The visit of German Chancellor Olaf Scholz to India marks a significant moment in the evolving relationship between the two nations. This trip, Scholz’s first to an Asian country since taking office, underscores Germany’s commitment to establishing a broader network of partnerships, particularly as it seeks alternatives to its relationship with China. As Chancellor Scholz stated, India is a “partner of choice for Germany, a partner of choice in a moment of need.” Both Germany and Prime Minister Narendra Modi emphasized the importance of expanding economic ties, with a hope for an expedited EU-India trade deal.

Addressing Germany’s Labor Shortage Through Indian Talent

Germany is currently facing a critical shortage of skilled workers. Simultaneously, many young Indians are seeking opportunities beyond traditional destinations like the US, UK, Canada, and Australia. This creates a mutually beneficial opportunity. Increasing numbers of Indian professionals are viewing Germany as an attractive alternative, drawn by its vocational training system – a combination of academic study and practical on-the-job experience.

The report highlights the preparation underway for this influx of talent. Students are actively learning German language and culture, preparing for roles in sectors like healthcare, hospitality, food processing, and transportation. One student expressed concerns about German punctuality and weather, noting, “People are punctual, but the train system is not…And even if we are 5 minutes late, they can scold us a lot.” Another student plans to become a truck driver, excited about the opportunity to travel across Europe. Rajesh Kundra exemplifies this shift, having switched careers to pursue opportunities in Germany, citing the high costs and increasing barriers to entry in other countries. Social media is playing a role in shaping perceptions, with viral videos offering a glimpse into German life.

The EU-India Trade Deal: A Potential Game Changer

A key focus of Chancellor Scholz’s visit is the potential signing of a long-awaited free trade agreement (FTA) between the EU and India. The deal, which has been in negotiation for years, is now expected to be finalized, potentially by the end of the month, coinciding with a visit by EU Commission President Ursula von der Leyen to India as the guest of honor for Republic Day. While the specifics of the agreement remain undisclosed, it is anticipated to generate significant momentum in Europe-India relations.

Gimma Mohan, a Senior Fellow with the Indopacific program at the German Marshall Fund, believes the FTA is crucial, stating that “this will be a very significant milestone.” She emphasized the combined economic power of the EU and India, accounting for substantial global trade flows, and the importance of upholding free trade principles in the current geopolitical climate.

Navigating India’s Complex Foreign Policy Landscape

The strengthening of ties with India is also influenced by Germany’s reassessment of its relationship with China. Gimma Mohan notes that Chancellor Scholz’s choice of India as his first Asian destination is “a sign of post-Merkel foreign policy” and demonstrates Germany’s willingness to invest in India as an alternative to its partnership with China.

However, India’s close relationship with Russia presents a nuanced challenge. While India maintains strong defense ties with Russia, Gimma Mohan points out that Europe has actually become the largest beneficiary of India’s efforts to diversify its defense imports. Between 2019 and 2023, India’s defense imports were split between Russia (36%), France (33%), and the United States (13%). Furthermore, an $8 billion submarine deal with Germany is in the works, representing India’s largest such agreement. Mohan suggests that both Berlin and New Delhi understand India’s long-standing relationship with Russia is on a downward trajectory.

Strategic Alignment and Complementary Economies

The report highlights the natural alignment between India and Germany. Both nations are pursuing strategies of diversifying their partnerships, facing competition from China, and navigating a volatile global landscape. Their economies are complementary: Germany seeks skilled labor, new markets, and critical minerals, while India aims to build its economic and technological capabilities.

Gimma Mohan emphasizes this complementarity, stating, “India and Germany are very complimentary…their foreign policy goals are complimentary.” She further notes that Germany is seeking skilled labor, new markets for its industry (from defense to clean tech), and new sources of critical minerals, all areas where India can contribute.

Conclusion

The German Chancellor’s visit to India signifies a strategic realignment, driven by Germany’s need for skilled labor, its desire to diversify partnerships, and the potential for a landmark EU-India trade deal. The growing people-to-people connections, particularly through vocational training programs, and the complementary economic strengths of both nations, position India as a crucial partner for Germany in a rapidly changing global landscape. This partnership is not just about economic benefits; it also represents a commitment to upholding free trade principles and fostering a more balanced and resilient international order.