Let’s look at how globalisation and trade have shaped up in the post-war era. The world was neatly divided by the colonisers into the “developed” and the “3rd world”, with two very different perceptions and pathways for societal development and commerce. Having tasted the bitter pill, India was now on the rigid trajectory of the non-aligned movement, swaraj, and careful choosing of trade partners. For a society that had been in such a devastating flux during the independence years, we had our work cut out for us, and had barely any patience left for lip-service and imperialist hubbub.
Germany was on the other end of the spectrum, but also dealing with societal difficulties. Although it was an industrialist virtuoso, the scars of unbridled fascism were still fresh, and called for a renewed and overt commitment towards human rights and earnestly friendly alliances, so as to have a seat at the table of new-era diplomacy. Though the term was yet to be coined, the focus had by then shifted to soft-power dynamics.
The intermingling between the two nations was, to use a borrowed phrase, a serendipitous “tryst with destiny”. And it happened despite a vastly different political ideology and socio-political perspectives. India was one of the first countries to establish diplomatic ties with the Federal Republic of Germany after the Second World War. And this brought in to focus the deep socio-historical engagement we’d had spanning centuries, with many German philosophers and members of the intelligentsia praising Indian culture, and vice-versa. It also highlighted the gracious nature of our mutual engagement: India, despite losing close to 20,000 soldiers in the campaign to eliminate Nazism, never demanded reparations; India was also one of the few privileged nations in the world that was able to maintain cordial ties with both East & West Germany before the Reunification.
Today, Germany stands as the most robust and stable economies in the world. It contributes an astounding 21.1% to the bloc’s consolidated GDP, leading the competition by miles. India has also done well for itself, given how young the economy is. India stands as one of the largest, and fastest growing economies in the world, while also providing the largest pool of skilled labour to the developed world. It can be safely surmised from the fact that India is the largest recipient of remittances, that our engagement with the West is indispensable for their economic sustenance. One need not look any further than the Covid phase, to realise just how vital Indian talent was in terms of facilitating digital services, providing resilience, preventing a total market breakdown and allowing Germany to pull through relatively unscathed.
We are more than just economic partners today. Our relationship is cultural, economic, and strategic. Our bonds have been built on the foundation of shared democratic principles, mutual respect and shared interests.
Let’s look at some of the key aspects of our bilateral cooperation, especially in the economic and commercial domain, and how they can be enhanced:
A Dynamic & Promising Economic Partnership
Today, Germany is India’s biggest trading partner in the European Union and one of its most important sources of FDI, technology transfer, knowledge processes and innovation. According to the Indian Ministry of Commerce, total trade between India and Germany was €21.3 billion in 2019 – a healthy mix of both goods & services. Major items of export from India to Germany include textiles, chemicals, pharmaceuticals, engineering goods, leather products and gems and jewellery. Major items of import from Germany to India include machinery, electrical equipment, metal products, chemicals & automobiles.
In 2018, 74 Indian companies injected a stultifying $11 billion in the German economy. There are more than 200 Indian companies thriving in Germany, and corporate investment currently stands at €6.5 billion. On the other side of the fence, India is home to more than 1,700 German companies, employing ~ 4,00,000 people. German FDI in the Indian market also stands at an impressive $12 billion.These numbers are also reflected in Germany’s immigration policy, with 78,000 business visas issued in just in 2019.
A Strategic Dialogue for Cooperation
With the Inter-Governmental Consultations, India and Germany have established a high-level dialogue platform at the level of Head of Governments, which allows for a comprehensive review of cooperation and identification of new areas of engagement.
It is thus no coincidence that India is amongst a select group of countries with which Germany has such a high-level consultations. The 5th IGC was held in Delhi on Nov. 1, 2019 during which a whopping 21 MoUs were signed spanning AI, Space Tech, Smart Cities & Urban Green Mobility to name a few.
India and Germany also cooperate closely on various regional and global issues such as climate change, sustainable development, counter-terrorism, multilateralism and reform of international institutions. Both countries are members of the G20, and in a rarely-witnessed mutual solidarity, support each other’s candidature for a permanent seat in the United Nations Security Council.
A Potential for Further Growth
Despite the impressive achievements so far, there is still a huge potential for growth in India Germany economic relations. Both countries have complementary strengths and opportunities that can be leveraged for mutual benefit. For instance:
- India has a large and growing market with a young and skilled workforce, while Germany has a strong industrial base with advanced technology and innovation.
India has a vibrant StartUp ecosystem with a focus on digital solutions, while Germany has a well-established network of SMEs with expertise in niche sectors.
India has ambitious plans to modernise its infrastructure, energy, logistics, healthcare and education sectors, while Germany has proven capabilities in these fields. This is also evident in frequent, official delegations from India sent to learn on how to proceed in myriad domains: vehicular traffic & road management, archaeological conservation, pedagogy, public transport optimisation and city planning, to name a few.
India is set to become a leader in the Indo-Pacific region. And Germany is very much integral to this role. We are about to usher-in a new phase of cooperation, multi-faceted growth and mutual engagement that has immense potential to redistribute global power in a more equitable fashion as well as provide for socio-economic resilience to both. The indications from recent past augur very well in this paradigm, and opportunities abound for investors and business on both sides of the fence. It is just a matter of taking initiative, to become a part of the growth story. The rest is already in place.