Last updated in November 2017
After the Second World War, India was one of the first countries to establish diplomatic relations with the Federal Republic of Germany. Today, India regards Germany as an important partner in its quest for a new political role in the region and the world, and above all for its ambitious economic reform programmes such as developing the country’s industrial sector. Relations here are based on the May 2000 Agenda for the Indo-German Partnership in the 21st Century, which has since been updated by further joint declarations.
Ongoing reciprocal visits have given relations considerable impetus. Of particular importance in this context are the Indo-German intergovernmental consultations, where the two countries’ Cabinets hold joint sessions every two years, alternately in Germany and India. Federal Chancellor Angela Merkel travelled to New Delhi in May 2011 to attend the first round of consultations. In 2013, Germany hosted a similar meeting with the Indian side in Berlin. The third bilateral intergovernmental consultations were held in October 2015 in New Delhi. At the meeting, 18 bilateral agreements were concluded in sectors such as energy, business, vocational training, culture and research, security and agriculture. The Chancellor was accompanied by twelve Federal Ministers, Ministers of State and State Secretaries. The consultations held in late May 2017 in Berlin continued the trend of increasingly close cooperation and produced further concrete results in all of the sectors mentioned above.
Germany and India share a common interest in maintaining the rules-based international order, particularly in the maritime domain. The joint fight against global terrorism is becoming more and more important. Cyber security is an area in which Germany and India frequently hold similar views. Tried and tested forms of cooperation have developed in the United Nations and other multilateral forums, such as working with Japan and Brazil in the Group of Four (G4) to reform the United Nations and the Security Council. Due to its population size and its rapid economic growth, India sees itself not only as a regional power but also increasingly as a new global player. This has led Germany and India to find more and more common ground for cooperation as a result of converging interests.
Germany is India’s most important trading partner in the European Union and (in absolute numbers) its sixth most important trading partner worldwide. Since India embarked on a course of reform and opened up its economy in 1991, the volume of trade between the two countries has increased very rapidly. Bilateral trade between India and Germany grew in 2016, with German imports from India increasing by 9 percent compared with the previous year and German exports to India by 10 percent. This trend seems to have continued in 2017.
India ranks 24th overall among Germany’s trading partners, 28th in terms of imports and 24th in terms of exports. Conversely, Germany ranks eighth as a supplier of goods to India and seventh as a buyer of goods from India. However, trade between Germany and India accounts for less than one percent of Germany’s total foreign trade. Germany’s continuing trade surplus of around 2.1 billion euros (2016) is due to the strong Indian demand for German goods, especially capital goods (machinery, which accounts for around a third of Germany’s total exports to India, as well as electrical engineering products, metal goods, chemical products, motor vehicles and vehicle parts).
Indian exports to Germany focus on the textile sector, followed by chemical products, electrical engineering products, metal and leather goods and foodstuffs.
The most important bilateral economic agreements include:
• the agreement on social security of 2011, which entered into force on 1 May 2017
• the double taxation agreement, which entered into force on 19 December 1996
• the trade agreement of 31 March 1955
• the agreements on cooperation in scientific research and technological development dating from 1971 and 1974
German direct investment
For decades, Germany has been among the ten largest foreign direct investors in India. In September 2017, German direct investment totalled 10.6 billion US dollars. Investments have focused on the transport, electrical and metal sectors. Over the past years, the service sector (in particular insurance) has headed the field, with a share of some 26 percent, followed by the construction and automotive industries. In the 2016-2017 financial year, new German direct investment amounted to 1.069 billion US dollars, compared with 986 million US dollars in the previous year. These figures only take into account direct capital flows, not indirect investment, and thus in no way reflect the real engagement of German companies in the country.
Germany’s development cooperation with India is a major component of bilateral relations. India is a Global Development Partner, playing a key role in global development issues, the protection of global public goods, the attainment of Sustainable Development Goals (SDGs)
as well as in international processes (WTO Doha Round, climate negotiations, Habitat III). India is also a country of extreme economic and social disparities and has the largest number of people worldwide, some 450 million, living in absolute poverty. On the other hand, India’s rapid economic development means that in the last two decades several hundred million people have been able to escape poverty. At the same time, industrialisation and urbanisation are also causing serious damage to the environment: India is now the world’s third-largest emitter of greenhouse gases.
India is a self-assured development partner and by no means financially dependent on official development assistance (ODA), which accounts for only 0.1 percent of gross national income. Despite the huge challenges the country faces, it now only accepts assistance from a few donors. Germany is the second largest bilateral donor, after Japan, and uses nearly all the instruments available in implementing its development cooperation policy. German development cooperation with India also promotes private sector engagement, for example through the Deutsche Investitions- und Entwicklungsgesellschaft (DEG), development partnerships with business (develoPPP.de programme) and partnerships between chambers of commerce and associations.
In 2016, it was agreed to focus bilateral development cooperation on the following priority areas:
• energy: energy efficiency, renewables and access to energy to reduce poverty
• sustainable urban development: improving urban and industrial environmental protection and urban infrastructure, climate change adaptation and emissions reduction, improving living conditions for the poor population
• protection of the environment and resources: conservation of natural resources, strengthening climate change adaptation capacities and increasing productivity and income in rural areas; helping achieve this are measures being conducted as part of the special initiative One World – No Hunger, in which India is the first country in Asia to participate
In addition, German development cooperation is supporting the setting up of a practice-oriented (dual) vocational training system while providing stimulus for innovative approaches in areas such as social policy or support for start-up companies.
Education and culture
The Goethe-Institut has six branch offices in India. They are called “Max Mueller Bhavans” after the co-founder of modern Indology and Sanskrit studies, Max Mueller (1823-1900). The institutes carry out language and programme work and offer information services in New Delhi, Kolkata, Chennai, Bangalore, Mumbai and Pune. The network of institutes is complemented by five Goethe-Zentrum locations – in Ahmedabad, Chandigarh, Coimbatore, Hyderabad and Trivandrum. Besides the organisation of cultural programmes, the main focus is on language work. Currently, some 18,000 people attend the German courses offered by the Max Mueller Bhavans and Goethe-Zentrum locations each year.
As part of the Schools: Partners for the Future initiative (PASCH), Indian schools at which German is taught as a foreign language are currently receiving support from the Goethe-Institut and the Central Agency for Schools Abroad (ZfA) (44 and 6 schools respectively). The country also has two German schools, one in New Delhi and the other in Mumbai. There are approximately 12,800 students learning German at these schools. In addition, the ZfA also oversees five other schools that have not yet attained PASCH status. German Language Certificate II (DSD II) examinations were offered for the first time in the last school year, which was made possible by special permission from the Standing Conference of the Ministers of Education and Cultural Affairs via the ZfA.
The Goethe-Institut has for years also cooperated closely with the national chain of schools operated by Kendriya Vidyalaya Sangathan (KVS). There are more than 60,000 pupils learning German at this chain’s approximately 320 schools. The lack of training opportunities for German teachers at Indian universities remains an obstacle to more widespread instruction. In addition, a further 170 or so schools in India are offering German as a foreign language with great success through the Goethe-Institut’s education services.
At the intergovernmental consultations in October 2015, a joint declaration of intent was signed to promote the teaching of German as a foreign language in India and instruction in modern Indian languages in Germany. Both sides are working to implement this. Representatives from India’s National Council for Educational Research and Training were given an up-close look at the German school system on a study visit in September 2017.
The branch office of the German Academic Exchange Service (DAAD) in New Delhi supports bilateral university and research cooperation programmes and provides scholarship programmes and student advice. The DAAD offers all its regular support programmes in India as well as a number of special India-specific programmes, some of them co-funded. In the 2015-2016 winter semester, some 13,740 Indian students were enrolled at German universities, an increase of nearly 16 percent on the previous year. The number of German students at Indian universities is estimated to be around 1000.
Science and technology
Scientific and technological cooperation with India dates back to the late 1950s and is based in part on two intergovernmental agreements, signed in 1971 and 1974. The countries enjoy long-established and intensive scientific cooperation in many different fields. Since the 1990s, there have been regular meetings at state secretary level.
The German House of Research and Innovation (DWIH) was officially opened in New Delhi in October 2012. The idea of bringing together German scientific and research institutions under one roof is designed to make it easier for Indian and German scientists, researchers and students to forge contacts with one another and to raise Germany’s profile as a science and research location. The Federal Foreign Office’s decision to set up one of only five German Houses of Research and Innovation worldwide in Delhi underlines the great importance accorded to India as a science and research partner. With its 15 consortium members, the DWIH in New Delhi is the largest of the five houses.
Together with India, Germany supports a bilateral research promotion centre – a unique model for Germany. The Indo-German Science and Technology Centre (IGSTC) in Gurgaon near New Delhi has been co-funded by Germany and India since 2008, each country initially contributing an annual sum of two million euros. Since 2017, the funding has been doubled to an annual four million euros. The IGSTC promotes bilateral application-oriented research projects in cooperation with industrial partners from both countries.
India has a major stake in several large research institutions in Germany. It has contributed some 30 million euros to the multinational FAIR particle accelerator in Darmstadt and has also invested substantial sums in licences for use of the DESY particle accelerator in Hamburg.
Germany is India’s second most important research partner worldwide, after the United States. This is reflected in the large number of joint Indo-German scientific publications. The more than 1000 Indian postgraduate students in Germany constitute the second largest group of foreign PhD students after Chinese PhD students. The Max Planck Society’s cooperation with India, based on an agreement with India’s Department of Science and Technology (DST), is gaining considerable momentum. In 2016, more than 800 researchers from India arrived to work at Max Planck institutes.
After the United States, Russia and China, India is the Alexander von Humboldt Foundation's most important partner country. The German Research Foundation (DFG) has had an office in New Delhi since 2006.
The Fraunhofer-Gesellschaft opened a permanent office in Bangalore in November 2012. In 2015, the Indian Ministry of Heavy Industries and Public Enterprises concluded an agreement with the Fraunhofer-Gesellschaft, under which Fraunhofer provides comprehensive advisory services. The University of Heidelberg’s South Asia Institute has had a branch in New Delhi since 1962 and forms an important link between India scholars from German and Indian research institutions. In the past few years other German universities, including Freie Universität Berlin, the University of Göttingen, the University of Cologne and the Technical University of Munich, have also opened branches in India. The Research Centre Jülich also has an office in New Delhi.
India faces huge challenges in terms of urban and industrial environmental protection. Long-term, sustainable soil conservation, noise reduction as well as the protection of water and air quality and biodiversity preservation are crucial to safeguarding health and quality of life in the country. They are also issues of global importance. India and Germany are working together to achieve internationally agreed environmental goals.
To meet these environmental and climate-related challenges, Germany is seeking to step up political dialogue with India. In 2015, the second Indo-German Environment Forum set up a number of joint working groups that meet to discuss topics such as climate protection and sustainable urban development as well as water and waste management and biodiversity. The next Indo-German Environment Forum is scheduled to be held in New Delhi in spring 2018.
German development cooperation with India has traditionally focused on environmental and climate protection. Climate protection measures centre on projects to promote renewable energy and energy efficiency. Cooperation on environmental protection includes waste management and sanitation measures in major urban areas.
Projects in India are also being supported as part of the German Government’s International Climate Initiative (IKI), which was launched in 2008. The focus of these projects includes renewable energy and biodiversity as well as waste management and sustainable urban development.
In March 2009, India became the first major newly industrialised country to join the International Renewable Energy Agency (IRENA). In addition to its IRENA membership, India is a founding member of the Renewables Club, which was launched in June 2013 in Berlin. On 2 October 2016, India ratified the Paris Agreement on climate change.
This text is intended as a source of basic information. It is regularly updated. No liability can be accepted for the accuracy or completeness of its contents.