Germany is India’s largest trading partner in EU and one of the top trading countries worldwide. In the last decade, economic as well as political interaction has increased significantly between the two nations. India was among the first nations to establish diplomatic ties with Germany post the World War. Today, Germany is amongst India’s most important partners both bilaterally and in the global context. Major Indian exports to Germany include leather and leather goods, gems and jewelry, rubber products, auto components, and chemicals, amongst others. In the last decade, economic as well as political interaction has increased significantly between the two nations.
Introduction
Germany’s development cooperation with India remains a major component of bilateral relations. There are several Joint Working Groups (JWGs) between India and Germany in different sectors including Agriculture, Automotive, Energy, Coal, Tourism, Vocational Education, Standardisation/Product Safety, Environment, Water & Waste Management, Urban Development, Climate Change, Health, Traditional Medicine, Biodiversity and Railways.
Development cooperation between the two countries focuses on energy, energy efficiency, sustainable urban development and environmental and resource protection. In addition, German development cooperation supports the economic participation of women and the setting up of a practice-oriented (dual) vocational training system and provides stimulus for innovative approaches, e.g. in social policy or by promoting start-ups.
Some Key Figures
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years of the establishment of diplomatic relations
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years of development cooperation
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years of the Strategic Partnership
Commitment To Climate Change
Both countries are committed to the timely realisation of the Sustainable Development Goals (SDGs) and the goals under the UNFCCC and the Paris Agreement. Both Participants are continuously taking effective steps to implement the SDGs and address the challenges of climate change. India achieved its aim of sourcing 40% of its established power generation capacity from non- fossil fuel sources, 9 years ahead of the 2030 target. India announced its further plans for ambitious climate action at COP-26, with the commitment to achieve net zero by 2070 and install 500 GW from non-fossil fuel sources and reduce emissions intensity of its economy by 45% by 2030. India has also launched a Green Hydrogen Mission to further address the energy transition challenges in the hard-to-abate sectors of the economy. Germany has pledged that it will achieve net zero by 2045 and reduce greenhouse gas emissions by 65% until 2030 as compared to 1990.
Bilateral Areas Of Cooperation
NITI-BMZ Dialogue on Development Cooperation: In September 2022, NITI Aayog and German Federal Ministry for Economic Cooperation and Development (BMZ) held the inaugural NITI-BMZ Dialogue of Development Cooperation via video conferencing. The NITI-BMZ Dialogue focused on five core areas of cooperation: Sustainable Development Goals (SDGs), climate action, energy transition, emerging technologies and agro-ecology. Both sides deliberated ongoing engagements and identified potential cooperation in areas that can produce tangible outputs and learnings for India and Germany. In support of a Green and Sustainable Development Partnership, Minister Schulze today announced additional funding of 3.5 million euros for specific strengthening of SDG implementation and climate action at the level of Indian States.
Partnership for Green and Sustainable Development: In May 2022, India and Germany signed a Joint Declaration of Intent on Partnership for Green and Sustainable Development (GSDP). During the last G7 summit in Schloss Elmau in June 2022, India and the G7 had agreed to work towards a Just Energy Transition Partnership (JETP).
Indo-German Environment Forum: Since its establishment in 2006, the Indo-German Energy Forum has successfully intensified Indo-German Cooperation in the areas of energy security, energy efficiency and renewable energies, investment in energy projects as well as collaborative research and development.
Indo-German Energy Forum: The Indo-German Energy Forum (IGEF) has been promoting cooperation in the priority areas of energy security, energy efficiency, renewable energy, investment in energy projects and collaborations in R&D, taking in to account the environmental challenges of sustainable development.
Indo-German Green Hydrogen Task Force: During the 6th IGC in 2022 in Berlin, a Joint Declaration of Intent (JDI) on ‘Indo-German Green Hydrogen Task Force’ was signed between the Ministry for Economic Affairs and Climate Action (BMWK), Germany and the Ministry of New and Renewable Energy (MNRE), India to strengthen cooperation in production, utilization, storage and distribution of Green Hydrogen.
Indo-German Solar Partnership: ChancellorScholzvisited India in February 2023 leading a high level business delegation comprising CEOs of major German companies. PM and Chancellor jointly addressed a Business Round table comprising top industry leaders from both sides. The visit saw the release of a common paper titled “India- Germany Vision to Enhance Cooperation in Innovation and Technology” by both sides and the signing of a letter of intent signed between the Department of Science & Technology and Fraunhofer Institute for Solar Energy System for cooperation in green hydrogen.
Indo-German Green Urban Mobility Partnership: To further deepen this cooperation, in November 2019, the Ministry of Housing & Urban Affairs (MoHUA), the Government of India and the German Federal Ministry for Economic Cooperation and Development (BMZ) signed a Joint Declaration of Intent on Green Urban Mobility Partnership (GUMP). Both countries agreed to collaborate more closely to transform urban transport systems through more efficient, people-centric and low carbon mobility solutions. BMZ agreed to make available concessional loans in the volume of € 1 billion through KfW Development Bank over a period of five years up to 2023. The utilisation of funds is envisaged to cover a wide range of sustainable urban mobility infrastructure improvement measures such as city bus transport systems, trams, water transport, cable cars, non-motorised transport, and multimodal integration.
India-Germany Trade
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01 The total bilateral trade between the two countries stood at US$ 24.8 billion during FY22, while it was valued at US$ 21.76 billion in FY21.
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02 The trade increased by 19% in the first 11 months of 2021 over 2020.
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03 Germany is the 9th largest investor in India, with cumulative FDI inflows of US$ 14.13 billion from April 2000-March 2023.
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04 Germany is India’s largest trading partner in Europe and has consistently been among India’s top (10-12) global partners. During the financial year 2022-23 (up to August 2022) it stood at 12th position.
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05 In FY23, German FDI in India was US$ 547 million.
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06 As per the Confederation of Indian Industry (CII), there are more than 213 Indian companies operating in Germany and are involved in trading, manufacturing, R&D, and innovation, and services.
Major Exported Items From India To Germany With Amount & Quantity
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01 India exported 5,838 commodities to Germany in FY23.
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02 India’s export to Germany stood at US$ 10.13 billion in FY23 and US$ 9.88 billion in FY22.
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03 Major exported items from India to Germany include electrical machinery & equipment (US$ 725 million); followed by RMG cotton including accessories (US$ 571 million), telecom instruments (US$ 477 million), machinery for dairy (US$ 476 million), and products of iron and steel (US$ 471 million) in FY23.
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04 India’s export to Germany stood at US$ 1.60 billion during April-May 2023.
Major Imported Items By India From Germany With Amount & Quantity
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01 India imported 5,955 commodities from Germany in FY23.
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02 Imports from Germany to India stood at US$ 15.93 billion in FY23 and US$ 14.96 billion in FY22.
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03 India's imports from Germany include machinery for dairy (US$ 1.96 billion); followed by aircraft, spacecraft, and parts (US$ 1.73 billion), medical and scientific instruments (US$ 872 million), electrical machinery and equipment (US$ 856 million), and auto components and parts (US$ 809 million) in FY23.
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04 Imports from Germany to India stood at US$ 2.62 billion during April-May 2023.
Recent Trends & Developments
6th Inter-Governmental Consultations: Prime Minister, Mr. Narendra Modi visited Berlin on May 2, 2022 to co-chair the 6th IGC with Chancellor Olaf Scholz where he was accompanied by External Affairs Minister, Finance Minister, National Security Advisor, and Minister of State (I/C) for Science & Technology. A total of 14 agreements were signed in diverse fields such as green partnership, development cooperation, renewable energy, migration and mobility, economic cooperation, and agriculture.
‘Make in India Mittelstand’ (MIIM) for German Mittelstand (SMEs) and Family-Owned Businesses is being implemented by the Embassy of India, Berlin to support high potential Mittelstand companies with medium to long-term potential for manufacturing in India. Since its inception in September 2015, 135+ companies have been facilitated through this program with a declared investment of nearly US$ 970 million.
India and the EU restarted talks for a comprehensive free trade agreement earlier this year after a gap of nine years. The two sides concluded the first round of negotiations for Bilateral Trade and Investment Agreements (BTIA), including the Geographical Indicators (GI) on July 1.
In May 2022, India and Germany agreed to a nearly US$ 10.65 billion partnership to strengthen financial and technical cooperation toward 2030 climate action and sustainable development goals. Prime Minister Narendra Modi and Chancellor Olaf Scholz signed a joint declaration of intent (JDI) establishing the Green and Sustainable Development Partnership (SDGs).
In July 2023, on his visit to India, Germany’s Vice Chancellor and Minister of Economic Affairs and Climate Action Mr. Robert Habeck said India and Germany want to further strengthen bilateral cooperation and increase investments and collaboration among companies.
During the 9th Annual Meeting of the Indo-German Working Group on Quality Infrastructure held on April 25, 2023, India and Germany signed an agreement known as Work Plan 2023. The agreement focuses on enhancing quality infrastructure (QI) by addressing the various aspects of QI, such as standardization, accreditation, conformity assessment, legal metrology, product safety, and market surveillance.
The number of German companies in India is growing annually, said German Consulate General Ms. Michaela Kuchler. The number of German companies in India in July 2022 was about 1,800 and it increased to almost 2,000 in July 2023.
Key Highlights: India-Germany Cooperation in Innovation and Technology
India and Germany, rooted in a long-standing partnership, are committed to advancing innovation and technology for global benefit, addressing socio-economic challenges, and fostering collaborations in key areas such as energy, business relations, digital technologies, AI, and 5G/6G technologies.
- Longstanding Partnership: India and Germany have a rich history of collaboration in science, technology, research, and innovation, formalized through the Inter-Governmental Agreement signed in May 1974.
- Shared Values for Global Benefit: Both nations, as responsible actors for global peace, stability, and sustainability, cooperate in innovation, technology, and industry to benefit humanity, guided by shared democratic values and respect for human rights.
- Commitment to Deepen Cooperation: Prime Minister Modi and Chancellor Scholz, in their meeting on February 25, 2023, affirmed their commitment to deepen and widen cooperation in innovation and technology, aiming to create a roadmap for economic development and addressing global challenges.
- Flagship Collaborations: Notable collaborations include academia-industry cooperation through the Indo-German Science and Technology Centre (IGSTC) and joint projects in areas such as Advanced Manufacturing, Embedded Systems, ICT, Sustainable Energy, and Smart Cities.
- Scientific Collaborations: Recognition of the close ties between Indian and German research institutes, fostering collaboration in advanced materials, particle physics, and educational exchanges, with Germany becoming a preferred destination for Indian students in STEM.
- Socio-Economic Development: Emphasis on the role of science, technology, and innovation in socio-economic development, addressing challenges like climate change, biodiversity loss, and achieving sustainable growth.
- Focus Areas for Indo-German Cooperation:
- Energy Partnership and Clean Technologies: Collaboration on a just energy transition, green hydrogen, and electrolyser manufacturing.
- Framework for Business Relations: Strengthening cooperation in standards development, quality infrastructure, and support for start-ups.
- Digital Technologies, including Fintech: Acknowledging the potential of digital solutions and fostering cooperation in areas like Industry 4.0, AI, and 5G/6G technologies.
- AI and 5G/6G Collaboration: Recognizing the potential of Artificial Intelligence (AI) to enhance lives and exploring opportunities for collaboration in 6G technologies.
- Cooperation in Hydrogen Valley: Fraunhofer and Department of Science and Technology have signed an MoU for Fraunhofer to be the Technology Partner for Hydrogen and Clean Technologies.
The Indo-German Science & Technology cooperation stands as a testament to the enduring collaboration between the two nations across various scientific disciplines, fostering innovation and knowledge exchange for mutual benefit.
Indo-German Science & Technology Cooperation Highlights
- Historical Framework:
- The cooperative program initiated under the Inter-governmental Agreement in May 1974.
- Coordination by the Department of Science & Technology (DST) in India and the German Federal Ministry for Education and Research (BMBF)
- Joint Committee on S&T:
- Apex Indo-German Committee on S&T established in 1994.
- Coordination for collaboration and addressing major issues.
- Modes of Cooperation:
- Various collaborative modes including joint research projects, R&D initiatives, and personnel exchange programs.
- Emphasis on academia-industry collaboration and workshops/seminars.
- Flagship Collaborations:
- Notable centers established, such as IG-SCID, IMPECS, and IGCS, focusing on infectious diseases, computer sciences, and sustainability.
- Participation in mega science projects like FAIR and DESY.
- Specific Collaborative Programs:
- DST-BMBF Program: Supporting joint research projects since 1998, with 42 projects in application-oriented areas.
- IGSTC: Bilateral collaboration with a focus on industrial relevance, funding 31 projects since 2011.
- DST-DAAD Program: Facilitating project-based personnel exchange since 1998, promoting academic training to young scientists.
- Research Initiatives:
- DST-DFG Program: Joint research projects and support for using major facilities in both countries.
- DST-MPG Program: Collaboration with Max Planck Society promoting research in computer science and lipids.
- FAIR Project: Indian participation in the construction of the international facility in Germany.
- Synchrotron Research and Technology:
- Collaboration between SINP, Kolkata, and DESY, Germany, for the construction and operation of a beamline.
- Access to world-class synchrotron light sources at DESY for Indian scientists.
- Nobel Laureates Meetings:
- DST supports the participation of Indian students at Lindau meetings with Nobel laureates.
- Exposure to premier research institutes in Germany for young Indian researchers.
- Frontiers of Engineering Symposium:
- Annual symposium co-sponsored by DST and Alexander von Humboldt Foundation.
- Provides a platform for young engineers from both countries to discuss the latest topics in engineering.
- Biotechnology Collaboration:
- Collaboration between DBT and BMBF since 2001, promoting joint projects in biotechnology.
- Annual joint calls for proposals to foster collaboration in the field.
- Earth Science and Medical Research Collaborations:
- MoU between MoES and Helmhotz Association for cooperation in Earth System Sciences.
- Collaboration between ICMR and BMBF to promote research on Antimicrobial Resistance.
The Indo-German partnership in education and research is flourishing, driven by strategic dialogues, thriving exchanges, and innovative collaborations, showcasing a shared commitment to progress and sustainability.
Indo-German Collaboration in Education and Research: A Strong Partnership
- India’s Aspirations Amidst Economic Challenges:
- Despite economic challenges brought on by the pandemic, India remains a global focus for its commitment to economic development.
- Recognizing the pivotal role of education and research, India aims to become a leading research nation.
- Long-Standing Partnership with Germany:
- Germany, a reliable partner for India, aligns with the Federal Government’s strategy to strengthen cooperation with emerging economies.
- Strategic Dialogues Shape Cooperation:
- Regular government meetings between India and Germany set priorities, emphasizing education and research.
- The upcoming sixth Intergovernmental Consultation in Berlin (May 2022) reinforces the commitment to collaboration.
- Thriving Student and Researcher Exchange:
- Student and researcher exchanges have surged, with 28,572 Indian students at German universities (2021).
- ‘Indo-German Partnerships in Higher Education’ (IGP) agreement fosters joint research and student collaboration.
- Bilateral Funding for Innovative Research:
- Bilateral funding supports impactful projects in materials science, biotechnology, health research, sustainability, AI, and urban development.
- Application-oriented projects yield innovations beneficial to both nations.
- Close Collaboration in Vocational Education:
- India sees Germany as a key partner in reforming its vocational education system.
- Close collaboration aims to export and adapt elements of the German VET system to meet India’s demands.
- Innovation Centers Strengthening Ties:
- The Indo-German Science and Technology Centre (IGSTC) supports innovative projects involving research institutions and SMEs.
- IGSTC fosters networking through workshops, symposiums, and joint research projects.
- Success Story: Indo-German Center for Sustainability:
- The Indo-German Center for Sustainability (IGCS) at IIT Madras focuses on joint research in water management, land use, waste management, and energy.