What are India and Germany hoping to gain from fortified ties on defense and trade? | DW News

Key Concepts

• Strategic Partnership: The evolving relationship between Germany and India, moving beyond economic ties to include defense and security cooperation.
• De-risking: Germany’s strategy to reduce its economic dependence on China and diversify its partnerships.
• Indigenization: India’s goal of developing its own domestic defense industry and reducing reliance on foreign suppliers.
• Multipolarity: The shift away from a US-dominated world order towards a more balanced distribution of power.
• Zietgeist: The defining spirit or mood of a particular period of history, in this case, a shift in German foreign policy following the war in Ukraine.
• Migration & Mobility Partnership: Agreements facilitating the movement of skilled workers between India and Germany.

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Shifting Geopolitics: Germany and India Forge a Closer Partnership

This report details German Chancellor Olaf Scholz’s recent visit to India, framing it as a pivotal moment in the evolving relationship between the two nations amidst a changing global landscape. The visit signifies a strategic realignment driven by concerns over US foreign policy predictability, China’s growing assertiveness, and the need for diversified partnerships.

India’s Expectations from Germany

The report highlights India’s desire for increased German engagement and investment, particularly in technology and defense. Locals at Connaught Place in Delhi expressed a perception of Germany as a source of innovation and high-quality engineering, specifically in construction and heavy industries. India views Germany as Europe’s economic powerhouse and seeks to leverage this for technological advancement and military modernization. A key area of interest is diversifying India’s defense procurement away from Russia, with German-built submarines being a prime example of potential collaboration. Currently, over 2,000 German companies, including Continental, Bosch, and Mercedes-Benz, operate in India, but there is perceived room for further expansion.

The Evolving Defense Cooperation

Traditionally hesitant to sell weapons to India due to its close ties with Russia, Germany is now showing increased willingness to engage in defense cooperation. The potential 8 billion euro deal for the joint manufacture of submarines in India is a central point of discussion. This deal aligns with India’s “indigenization” goals – developing a domestic defense industry – and offers Germany access to India’s lucrative defense market. This shift in German policy is linked to the “Zietgeist” – a change in attitude following Russia’s invasion of Ukraine and a broader reassessment of strategic priorities.

The Impact of US Foreign Policy & China’s Rise

Both India and Germany experienced “rude awakenings” under the Trump administration, citing concerns over unpredictable policies regarding tariffs, Ukraine, and Venezuela. While acknowledging the continued importance of US economic and military power, both nations recognize the need to diversify their strategic partnerships. A shared concern over China’s growing assertiveness, particularly in the Indo-Pacific region and its impact on critical supply chains, is a significant driver of closer ties. Both countries advocate for a “rules-based multilateral world” rather than one dictated by the power dynamics of Washington and Beijing.

However, challenges remain. China is Germany’s top trading partner, significantly larger than India, creating a potential conflict of interest. Conversely, India’s continued close relationship with Russia presents a challenge for the European Union, given its security concerns related to the Ukraine invasion.

Symbolic Gestures & Upcoming Agreements

Chancellor Scholz’s decision to visit India before China is viewed as symbolically significant, indicating a prioritization of the relationship. His visit to Prime Minister Modi’s home state of Gujarat, rather than Delhi, is interpreted as a gesture of appreciation. Furthermore, the impending EU-India bilateral trade agreement, two decades in the making, is expected to be finalized at the end of January, signifying a deepening economic partnership.

Analysis by Sheree Malhotra – Observer Research Foundation

Sheree Malhotra, Deputy Director at the Observer Research Foundation, emphasized the shift in the Indo-German relationship beyond its traditional economic focus, highlighting defense and security as emerging drivers of cooperation. She detailed the submarine deal as crucial for India’s defense modernization and indigenization goals, while simultaneously allowing Germany to reduce India’s reliance on Russian military equipment and access a growing market.

Malhotra also explained Germany’s “de-risking” strategy from China, driven by EU-China tensions and trade imbalances. She noted the complementary nature of the two countries’ labor markets, with Germany facing an aging population and a shortage of skilled workers, and India possessing a large, technically skilled workforce. The 2022 migration and mobility partnership agreement, granting 90,000 visas for Indian workers, exemplifies this cooperation.

Regarding the influence of US foreign policy, Malhotra stated that a second Trump presidency has significantly impacted India’s relations with Germany and the EU, citing tariffs on Russian oil purchases and concerns over US commitment to the Indo-Pacific region. She positioned India as a stabilizing factor in a fragmented geopolitical environment, particularly as the EU seeks to diversify its partnerships. The upcoming EU-India summit and the visit of French President Macron underscore the EU’s eagerness to deepen ties with India.

Data & Statistics

• 8 billion euros: Estimated value of the potential submarine deal between Germany and India.
• 90,000: Number of visas Germany agreed to grant Indian workers under the 2022 migration agreement.
• Eight times: China’s trade volume with Germany is approximately eight times larger than India’s.
• Fourth largest economy: India is currently the world’s fourth largest economy.

Logical Connections

The report establishes a clear connection between global geopolitical shifts (US policy, China’s rise, Russia’s actions) and the resulting need for strategic realignment. This realignment is manifested in the deepening partnership between Germany and India, driven by shared interests in defense cooperation, economic diversification, and a rules-based international order. Malhotra’s analysis provides further context, explaining the specific motivations and challenges facing both nations.

Conclusion

The visit of Chancellor Scholz to India represents a significant step towards a more robust and multifaceted partnership. Driven by a shared need to navigate a volatile global landscape and a desire for greater strategic autonomy, Germany and India are increasingly recognizing each other as essential partners. This relationship is not merely one of convenience but a necessity in an era where the old certainties of the global order are rapidly dissolving. The upcoming trade agreement and potential defense collaborations signal a commitment to long-term cooperation and a shared vision for a more balanced and stable world.