Last updated in October 2009
Political relations
Following the Second World War, India was the first country to end the state of war with Germany and among the first to grant the Federal Republic of Germany diplomatic recognition. It demonstrated sympathy and support for German reunification. India regards united Germany as an important partner in its quest for a new political role in the region and the world.
Mutual high-level visits have given relations a considerable impetus. The Indian Prime Minister Manmohan Singh visited Germany in April 2006, as had his predecessor Vajpayee in May 2003. There had previously been visits to Germany by President Narayanan (in 1998), Prime Minister Rao (in 1991, 1993 and 1994), President Venkataram (in 1989) and Prime Minister Gandhi (in 1988).
The most recent high-ranking visit on the German side was that by Federal Foreign Minister Steinmeier from 19 to 21 November 2008. Prior to this, there were visits to India by Federal Chancellor Merkel from 29 October to 1 November 2007 and by Bundestag President Dr. Lammert in August 2007. Official visits to India had previously been paid by Federal Chancellor Schröder (in 2004 and 2001), Federal President Rau (in 2003), Federal President von Weizsäcker (in 1991) and Federal Chancellor Kohl (in 1993, 1986 and 1983).
The Agenda for Indo-German Partnership in the 21st Century, which was signed by the two countries’ Foreign Ministers in May 2000, sets out potential areas for intensifying bilateral relations. Since 23 April 2006, this has been supplemented by a Joint Declaration by Federal Chancellor Merkel and Prime Minister M. Singh on strategic partnership between the two countries. Besides providing for closer coordination on regional and global policy, e.g. on Afghanistan, Iran, disarmament, fighting terrorism, climate protection and the reform of the United Nations, this partnership is designed to markedly step up cooperation in the business and energy sectors as well as in science, technology and defence. On 30 October 2007, during Federal Chancellor Merkel’s visit to India, a Joint Statement on the Further Development of the Strategic and Global Partnership was issued.
Economic relations
In recent years, economic relations between Germany and India have markedly gained momentum and increased in intensity. The visits to India by the Federal Chancellor in late October 2007 and by Federal Foreign Minister Steinmeier in November 2008, both accompanied by high-ranking business delegations, reaffirmed the mutual interest in further intensifying economic relations.
Germany is India’s principal trading partner in the EU. Since India embarked on a course of reform in 1991, the volume of trade between the two countries has increased rapidly. Given the considerable potential for growth, it is hoped to increase the volume of bilateral trade to EUR 20 billion by the end of 2012. In 2008, it reached a new high at approximately EUR 13.4 billion. German exports to India increased by 11 per cent, to approximately EUR 8.2 billion, and Indian exports to Germany by 11 per cent, to approximately EUR 5.2 billion. Germany thus recorded a balance of trade surplus of around EUR 2.9 billion. India ranks 27th among Germany’s trading partners in terms of exports and 28th in terms of imports. In 2007, Germany was India’s seventh most important trading partner for imports and eighth most important for exports.
Germany’s principal exports are mechanical engineering products (accounting for one-third of total exports to India), followed by chemical products and electrical goods. Also of importance are aircraft, precision engineering products und optical goods. Strong growth rates were recorded for aircraft, foodstuffs, motor vehicles and machinery as well as for electrical and optical goods.
Indian exports to Germany focus on the textile sector, followed by chemical products, leather goods, foodstuffs, iron and iron goods as well as motor vehicles.
The most recent session of the Indo-German Joint Commission on Industrial and Economic Cooperation, co-chaired by the German Economics Minister and India’s Finance Minister, was held in Berlin on 18 and 19 September 2007. Accompanied by more than 30 Indian business leaders and heads of business associations, India’s Finance Minister called on German companies to step up their engagement in India. The main items on the agenda were trade facilitations, export controls, specific investment projects, further market deregulation, German companies’ technical and vocational training measures as well as intensifying cooperation in the energy, infrastructure, tourism and environmental sectors.
Along with the Energy Forum, which was set up in 2006, the working groups on coal, tourism and infrastructure are making important contributions to intensifying economic relations with India.
In late 2008 and early 2009, a total of three Indo-German working groups, on technical and vocational training and the automotive and agricultural sectors, commenced work with high-level government involvement.
The main Indo-German economic agreements include:
Double taxation agreement, which came into force on 19 December 1996
Agreement on the promotion and protection of investments, which came into force in July 1998
Trade agreement of 31 March 1955
Agreements on cooperation in scientific research and technological development of 1971 and 1974
German direct investment
Aggregate German direct investment (excluding the substantial reinvestment and other currently unrecorded inflows) amounts to approximately USD 3 billion, putting Germany in third place among European investors, after the United Kingdom and the Netherlands, and in seventh place overall. According to official Indian figures, new German direct investment in the financial year 2008/09 amounted to USD 629 million (EUR 410 million). However, this figure only takes into account direct money flows, not indirect investment, and thus in no way reflects the real engagement of German companies, which are expanding their capacities, in particular through reinvestment.
Some 2,700 Indo-German cooperative business ventures have been set up since 1991. These projects are concentrated in chemicals, pharmaceuticals, machine and plant engineering, electrical engineering and software.
Development cooperation
Germany's development cooperation with India is a major component of its foreign policy relations. Despite economic advances and the successful fight against hunger and endemic disease, India faces problems with severe disparities between rich and poor, urban and rural areas and the resulting inadequate access to health care or education for large sections of the population. These deficits are an obstacle to nationwide sustainable development at the desired pace. There are, then, still numerous intervention points for targeted cooperation to improve people’s living standards.
In its efforts to make its development cooperation efficient and give it a clearer profile, the German government has agreed with the Indian government on the following priorities:
environmental protection and the conservation of natural resources
energy
sustainable economic development (developing the financial sector and social security)
Germany's development cooperation measures are carried out by the Deutsche Gesellschaft für Technische Zusammenarbeit GmbH (GTZ) and the Development Loan Corporation (KfW Bank Group) on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) and in consultation with the Federal Foreign Office. The GTZ focuses on Technical Cooperation (consulting services) and the KfW on Financial Cooperation (investment projects).
Since development cooperation with India cannot be divorced from economic and political developments in the country, many projects are carried out in close cooperation with business associations (chambers of commerce) and self-help organizations of small and medium-sized business.
On the political front, the German government is open to initiatives for developing regional, cross-border cooperation with neighbouring countries, also incorporating the experience of other developing nations, in a South-South cooperative effort.
Development policy dialogue at government level takes place at the annual intergovernmental consultations and negotiations on development policy.
German development cooperation with India has a successful track record dating back more than 50 years. To mark this anniversary, the Federal Minister for Economic Cooperation and Development, Heidemarie Wieczorek-Zeul, visited India in October 2008.
Cultural exchange
Indo-German cultural exchange was formalized in a cultural agreement which came into force in September 1969. Since then, the Indo-German cultural consultations, held every three years, have formed a working basis for projects and exchanges in culture and education. The most recent cultural consultations were held in October 2005.
There are six branches of the Goethe Institute in India. They are called Max Mueller Bhavans after the founder of Indian studies, Max Mueller. The institutes do language and programme work and provide information in New Delhi (also the regional institute for South Asia), Kolkata, Chennai, Bangalore, Mumbai and Pune (language work only). Besides the organization of cultural programmes, the main focus is on language work. Some 12,000 people currently attend the German courses offered by the Max Mueller Bhavans each year. To meet the constantly growing demand, a new largely e-mail-based distance learning programme has been introduced.
The network of institutes is being enlarged by the addition of five Goethe Centres in Ahmedabad, Chandigarh, Coimbatore, Hyderabad and Trivandrum.
An Indian cultural centre (Tagore Centre) is located at the Indian Embassy in Berlin.
The branch office of the German Academic Exchange Service (DAAD) in New Delhi supports bilateral university and research cooperation programmes and is concerned with scholarship programmes and study counselling. In recent years, education fairs have been held as part of efforts to promote Germany as a place to study and research. There are currently some 3,800 Indian students at German universities (excluding those permanently resident in Germany). The number of German students at Indian universities is estimated at 200.
In 2009, the DAAD developed the new programme initiative “A New Passage to India”, a scheme to promote study and research stays in India.
There are currently four academic teachers (for German as a Foreign Language) and seven short-term lecturers working in India. The DAAD helped 12 German and 11 Indian institutes with partnership and university exchange programmes as well as funding 48 research and work stays and re-invitations and 19 information stays for Indian scientists and academics in Germany.
The South Asia Institute of the University of Heidelberg has had an office in New Delhi since 1962. It plays an important role as an interface for Indian studies experts from German and Indian research institutions.
There is an approved German School in New Delhi offering instruction up to 12th grade. Pupils will be able to take the German International Abitur Examination for the first time as of 2010
Germany regularly conducts cultural preservation projects in India. In early 2009, restoration of the Zenana Mahal (Palace of the Queens) at Mehrangarh Fort in Jaipur was completed.
In Ladakh, the restoration of the temple complex and the reconstruction of the monks’ living quarters in Alchi Tsatsapuri are being supported.
Scientific and technological cooperation
Scientific and technological cooperation with India dates back to the late 1950s and is based partly on two intergovernmental agreements (1971, 1974). Indian science (particularly space research, IT and biotechnology) enjoys a good reputation in Germany, as does German scientific activity in India. After the US and Japan, India is the third-largest recipient of Alexander von Humboldt scholarships worldwide, and with more than 550 guest researchers it is one of the Max Planck Society’s two biggest partner countries in terms of academic/scientific exchange.
In 1998, the seven Indian Institutes of Technology (Centres of Excellence) and nine German technical universities agreed to set up a programme providing for study trips for Master’s students to the partner country. In the same year, a joint programme was established by the German Academic Exchange Service (DAAD) and the Indian Department of Science and Technology (DST) to promote project-oriented research cooperation. Since 2001, a group of Indian students and young scientists has attended the annual Nobel Prize winners’ conference in Lindau on Lake Constance. India was the partner country of this year’s Nobel Prize winners’ conference. India’s Education Minister Sibal and Germany’s new Federal Education and Research Minister Schavan travelled to Lindau to attend the event.
In recent years, Indo-German cooperation in science and technology has gained particular momentum. In 2004, former Federal Chancellor Schröder inaugurated the Indo-German Science Circle in New Delhi – a high-profile series of lectures with an affiliated network and a bilateral scientific website. Also in 2004, the Max Planck Society concluded a basic agreement with India’s Department of Science and Technology (DST) providing for the promotion of partner groups and fellowships. Shortly afterwards, the German Research Foundation (DFG) also concluded a basic agreement with the DST and in November 2006 opened an office in New Delhi and a branch office in Hyderabad.
During her trip to India in February 2007, Federal Education and Research Minister Dr. Schavan concluded an agreement to set up an Indo-German Science and Technology Centre (IGSTC) in New Delhi. Parallel to this, a high-level EU-Indian conference of science and research ministers was held in New Delhi on the initiative of the German EU Presidency. The New Delhi Communiqué agreed on at this conference sets new standards for future cooperation between the EU and India in science and technology. This occasion also saw the signing of an Indo-German declaration on India’s participation in the major German project FAIR, which includes a number of international partners. The project will use accelerator technology to address basic questions relating to matter.
Science and technology was also a key item on the agenda during Federal Chancellor Merkel’s trip to India in late October 2007. The delegation accompanying her included Federal Education and Research Minister Schavan and six leading representatives of German scientific institutions. The two heads of government launched the “Science Express”, a cooperation project between the Max Planck Society and the Indian Department of Science and Technology funded by the German Federal Ministry of Education and Research, which travelled across India for seven months promoting Germany as a research destination and rousing students’ and schoolchildren’s interest in science. The “Science Express” stopped at a total of 56 Indian cities and drew over two million visitors. During the Federal Chancellor’s visit, Federal Education and Research Minister Schavan signed an agreement with the then Indian Science and Technology Minister Sibal to set up the IGSTC.
During the visit, Federal Minister Schavan also announced the launch of the programme “A New Passage to India”, which is designed to promote binational study programmes as well as study and research stays and internships in Germany and India. The DAAD has an annual budget of EUR 4.3 million to fund this programme, an important goal of which is to increase the number of young scientists and academics who are familiar with the partner country.
The most recent meeting of the Indo-German Committee on Science and Technology was held in Jülich in May 2008. It underlined the interest on both sides in stepping up cooperation in the following areas: biotechnology, environmental and energy research, health research, space travel and production technology.
Highlights of the visit to India by Federal Minister Schavan in September 2008 were the inauguration of the Indo-German Science and Technology Centre (IGSTC) in New Delhi and an event celebrating 50 years of German cooperation with the IIT Madras in Chennai.
India’s importance as a partner country in science and technology cooperation is also underlined by the Federal Foreign Office’s decision to set up a German Science and Innovation House (DWIH) in Delhi, one of five locations worldwide. The DWIH will be a German science and academic organizations/foundations institution. The German Research Foundation (DFG) is in charge of the team tasked with establishing the DWIH in Delhi.
Environmental relations
The environment has traditionally been a focus of German development cooperation with India. As early as September 1998, the two countries’ environment ministers signed a Memorandum of Understanding aimed at extending development projects in selected areas. Environmental protection and nature conservation currently form one of the three priority sectors of German development cooperation with India.
Projects in India are also to be supported as part of theFederal Government’s International Climate Initiative launched in 2008. The required funding is to come from the auctioning of emission certificates in Germany.
To meet the urgent environmental challenges we face, Germany is also seeking to step up political dialogue with India. In November 2008, Federal Environment Minister Gabriel and his Indian counterpart opened the first Indo-German Environment Forum in New Delhi, which focused on the following areas: water supply and sanitation, waste management, energy efficiency, renewable energy and the Clean Development Mechanism (CDM) proposed in the Kyoto Protocol.
In March 2009, India was the first major threshold country to join the International Renewable Energy Agency (IRENA), becoming the new agency’s 77th member. Prior to this, India had also taken part in the international Renewables 2004 conference initiated by the Federal Government and held in Bonn in June 2004. In addition, it is active in the Renewable Energy Policy Network for the 21st Century (REN 21) set up at that event and will host the 3rd follow-up conference (since Bonn 2004), which is scheduled to be held in New Delhi from 26 to 29 October 2010 under the title Delhi International Renewable Energy Conference (DIREC 2010).
