It would be tempting to dismiss German Chancellor Olaf Scholz’s recent visit to India as a non-event, coming as it does in the wake of India’s recent bilaterals with China and Russia. But as the manufacturing powerhouse of the EU and the world’s third largest economy, Germany’s overtures to India are significant on various counts — geo-politics, technology sharing, immigration and trade talks. Germany’s interest in India seems to be part of a broad China-plus-one strategy of the West, besides a search for new markets to revive its economy which contracted in 2023 and is expected to do so this year as well.
The German government’s ‘Focus on India’ document released a couple of weeks back perceives India as a “stabilising influence” in the Indo-Pacific (read counterweight to China) and seeks cooperation on arms-related issues (a submarine deal is in the works). Germany’s lukewarm support to Ukraine in the war could not have inconvenienced India. The joint statement refers to collaboration in grid infrastructure, an area where Germany’s expertise is notable as a pioneer in rooftop solar. In the context of India’s recent rooftop solar push, grid stabilisation technologies are crucial. Germany might have been priced out by China in the solar game, but its research into improving the efficiency of solar cells should be kept in mind. Germany’s clean coal processing technologies too would be very useful. However, the emphasis on collaboration in green hydrogen may not yield much in the near future, since the technology is in its infancy. Research collaborations in academia and industry in frontier areas such as AI hold out promise.
As a stagnating economy with a greying population (a quarter of the population above 60 years of age), Germany needs skilled labour and has raised its visa cap for skilled Indians from 20,000 to 90,000 in a year. Interestingly, this move comes at a time when Europe, Germany included, is in the grip of anti-immigration sentiment. In fact, Sweden, Denmark, Norway, France and even Germany seem to offer varying sums to get outsiders to leave, some of these being asylum seekers. While the governments say they want high skilled workers instead, with a salary level defining the same, it is not clear how this will work out in the case of India and Germany.
India’s trade with Germany, its largest partner in the EU, touched $33 billion in 2023, while Germany’s investments here are about $15 billion. This seems minuscule from Germany’s point of view, as its trade with China, its top trade partner, is about $270 billion with the US following as a close second. But if Germany is serious about China-plus-one, India too can push its own concerns in a number of areas, such as the sticking points in the EU FTA, climate finance and technology transfer. Germany can help India navigate the hoops created by the Carbon Border Adjustment Mechanism. A turbulent world is carving out new areas of engagement and promise.