India and Switzerland have had, since the very beginning, a mutual admiration deriving from a commitment to democratic rule, soft-power and the non-alignment diplomatic ethos. Our relationship has been built, brick-by-brick, on shared virtues in both, letter and spirit. It’s one for the history books as is. Steeped in history and fortified by recent strategic & commercial agreements, it’s a testament to the power of international cooperation.
The Swiss-Indian alliance dates back to 1948, when Switzerland recognised India’s independence. A Treaty of Friendship was signed on 14th August, and was the first such treaty that Young India was an agent of. In a rare example of friendship and international diplomacy, it was Switzerland that represented India’s interests in Pakistan during the Bangladesh independence years. Fast forward to today, and you’ll find a relationship that’s blossomed: as vibrant as an Indian festival, and as robust as a Swiss chronograph.
On the commercial front, bilateral trade has grown steadily, reaching $30 billion in 2021. India is now Switzerland’s 7th largest trading partner: Swiss exports to India totalled $20.8 billion last year, including pharmaceuticals, machinery, watches, chemicals, and metals. Indian exports to Switzerland grew to $9.8 billion, including jewellery, textiles, agriculture, and IT services.
Swiss companies have always engaged with India zestfully, investing over $15 billion, making Switzerland the 11th largest foreign investor in the country. Swiss majors like Nestle, Novartis, Roche, ABB, and Schindler run a substantial volume of their operations here to tap into the vast Indian consumer base and optimise their costs. They have become household names, contributing – in no small measure – to India’s growth story while bringing Swiss precision and quality to the Indian market.
On the flipside, Switzerland has emerged as a top destination for Indian foreign direct investment. Over 160 Indian companies now operate in Switzerland, including major banks, IT firms, and manufacturers. India is the 5th largest non-European investor in Switzerland. Indian multinationals and business diaspora appreciate Switzerland’s low taxes, one of the world’s strongest banking systems, stability, easily navigable regulations, and strategic location in the heart of Europe. Indian companies have found a welcoming home in Switzerland. KPOs like TCS, Infosys, and Wipro have also established their presence well, bringing Indian innovation and dynamism to the Swiss economy.
Several major agreements have bolstered these trade flows. The landmark India Switzerland FTA signed is progressively mitigating tariffs on both sides. The IPAP programme has also been a vital touchpoint, in intellectual property rights protection, given the greater and greater dependence of businesses and governance on digital & patented processes. And in the same vein, we ratified the Multilateral Convention on Mutual Assistance to prevent tax evasion between the two.
In terms of mobility and migration, the ties are just as robust. India and Switzerland signed a groundbreaking Migration and Mobility Partnership in 2019 to facilitate travel and work. PM Modi selected Switzerland as the first country for his overseas summit in 2022. Switzerland is one of a handful nations that have opened a new consulate in Bangalore in to expand diplomatic presence.
What about people-to-people connections? Well, we all know that getting into Switzerland is prestigious by itself, and a corollary of that is an inevitable, unavoidable and extremely selective admission criteria. Yet, Switzerland is now home to over 9,000 Indian students, researchers, and professionals, with companies like ETH Zurich becoming a magnet for Indian tech talent. Tourism has boomed, with over half a million Indians visiting Switzerland annually, while the Alps have been a longtime favourite for Bollywood shootings. Yoga, folk crafts, and Indian cuisine have also soared in popularity across Switzerland over the last 3 decades. It’s a delightful tango that has transcended political borders, administrative divisions, creed, language and distance.
The Swiss-India relationship has been built on a foundation of shared values and mutual respect. We’ve signed numerous MoUs and agreements that reflect this: on technical cooperation in the field of climate change and the environment; on vocational education and training (like the Bhartiya Skill Development University); the Indo-Swiss Joint Research Programme, which has been fostering scientific cooperation between our nations since 2005, to name a few. It’s the reason that India and Switzerland find themselves aligned on issues like fighting terrorism, preventing black money flows, and reforming bodies like the UN & IMF to make them more growth-friendly for the developing nations.
Though the backdrop to our current paradigm can still be expounded upon for quite some time, let me encapsulate it with a pithy metaphor: Our nations have been like Swiss cheese and Indian naan – different, but surprisingly complementary. Our friendship has endured through many crises, ups and downs and geo-strategic manoeuvring.
As we look to the future, our gestures have augured well, and it is certain that we will continue to build on this strong foundation. With new MoUs and trade agreements on the horizon, the Swiss-Indian alliance is set to reach new heights. So here’s to Switzerland and India – two nations, one incredible partnership.
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.