Why Berlin and New Delhi are getting closer | Berlin Briefing Podcast

Key Concepts

US-India relations souring under Trump
India's strategic recalibration: engaging with China and Russia
Germany's interest in strengthening ties with India
The "elephant in the room": India's relationship with Russia
India-Germany cooperation on a rules-based global order and UN reform
Potential for an EU-India Free Trade Agreement (FTA)
Germany's need for skilled workers and attracting Indian talent
Balancing values vs. interests in foreign policy

US-India Relations: From "Match Made in Heaven" to Fallout

Initial optimism: Modi and Trump initially had a good relationship, with Modi visiting the White House early in Trump's second term.
Turning point: Disagreements arose over a free trade agreement, with India setting "strict red lines" unacceptable to the US.
Kashmir attack: The April 22nd attack in Kashmir, where 26 civilians were killed, further strained relations. India blamed Pakistan, while Trump offered to mediate, which was unacceptable to India.
Trump's actions: Trump's invitation to the Pakistani army chief to the White House and the imposition of 25% reciprocal tariffs on Indian goods, followed by another 25% tariff on India's Russian crude oil purchases (totaling 50%), led to a significant souring of relations.
Impact on India: India feels "backstabbed" by the US and questions the long-term reliability of the US and the Western Alliance. This leads India to reconsider its relationship with Russia, which has been historically predictable and reliable.

India's Strategic Recalibration: China and Russia

Modi's visit to Beijing: Despite tensions with the US, Modi attended the Shanghai Cooperation Organization summit in Beijing, sending a signal of engagement with China.
Calming the border with China: India seeks a "calm border" with China due to the economic and military strain of patrolling the border after the Galwan clash.
Economic importance of China: Trade between India and China remains vital, with China providing essential components for Indian manufacturing, such as precursor chemicals for the pharmaceutical industry.
Russia as a reliable partner: Russia remains a "dear friend" to India, providing predictability in foreign relations.

Germany's Engagement with India: Addressing the "Elephant in the Room"

Foreign Minister Baerbock's visit: The new German Foreign Minister, Johan Vardafool, visited India to strengthen relations.
The Russia issue: Vardafool asked India to use its influence with Russia to bring Putin to the negotiating table regarding Ukraine. He also mentioned the possibility of secondary sanctions that could affect India's purchase of Russian crude oil.
Areas of cooperation: Despite disagreements on Russia, Germany and India share common ground on a rules-based global order, free trade routes, and UN reform, with Germany supporting India's bid for a seat on the UN Security Council.
Agreeing to disagree: Both sides seem to "agree to disagree" on the Russia issue, with Germany being more accommodating of India's relationship with Russia.

India-Germany Relations: Beyond the Thorny Issues

India's perspective on Pakistan: India seeks stronger condemnation of Pakistan from Germany regarding terrorism, but understands Germany's limitations.
Focus on concrete cooperation: The India-Germany relationship extends beyond political issues, encompassing a free trade agreement with the EU and a growing defense relationship.
Predictability as a key factor: India values predictability in its relationship with Germany, especially in contrast to the unpredictability of the US under Trump.
Increasing defense cooperation: Germany has made it easier for India to purchase weapons, including handguns, and there is potential for a submarine deal. Both countries aim to increase military cooperation through joint maneuvers.
Shared strategic interests in the Indo-Pacific: Both countries share strategic interests in the Indo-Pacific region, bringing China back into the picture. India is also observing the growing closeness between China and Russia, which it views as a potential security threat.

The Potential for an EU-India Free Trade Agreement (FTA)

Untapped potential: Trade between India and Germany is significantly lower than trade between Germany and China, indicating substantial growth potential.
Long-standing negotiations: Discussions about an EU-India FTA have been ongoing for over a decade.
Obstacles: Significant obstacles remain, including access to India's agriculture and dairy markets, digital regulations, and carbon offsets.
Recent progress: India recently signed a free trade agreement with the United Kingdom, which could serve as a model for the EU-India FTA.
Political will: There is a sense that the current geopolitical uncertainties and unpredictabilities present an opportunity to finalize the FTA.
German support: Germany is a strong supporter of the FTA and is willing to push for its completion within the EU.

Germany's Need for Skilled Workers and Attracting Indian Talent

Skilled worker shortage: Germany faces a shortage of skilled workers, with over 500,000 positions needing to be filled.
Attracting Indian talent: Germany is actively encouraging Indian students and skilled workers to come to Germany, particularly in STEM fields.
Easing immigration: Germany has made changes to citizenship rules and signed a migration mobility agreement with India to facilitate the entry of Indian professionals.
Growing Indian community: The number of Indians pursuing skilled jobs in Germany is increasing, leading to a growing Indian community and potential social impacts.

Balancing Values vs. Interests in Foreign Policy

Shift in German foreign policy: Under the new Foreign Minister, Germany is emphasizing German interests over values in its foreign policy.
Pragmatic approach: Vardafool is taking a more pragmatic and less lecturing approach towards India, focusing on areas of mutual interest.
Strategic autonomy: Germany recognizes India's strategic autonomy and its ability to balance multiple relationships.

Conclusion

The world is undergoing a significant transition, prompting countries like India and Germany to reassess their relationships and seek new partnerships. The souring of US-India relations under Trump has created an opportunity for Germany to strengthen its ties with India, particularly in areas of trade, defense, and skilled labor. While challenges remain, including India's relationship with Russia and obstacles to an EU-India FTA, there is a sense that the stars may finally be aligning for a deeper and more meaningful partnership between India and Germany. The success of this partnership will depend on both sides' ability to overcome these challenges and capitalize on the opportunities presented by the current geopolitical landscape. The end of the year will be a key indicator of whether the EU-India free trade agreement can be finalized, which would be a significant step forward.