The German Chancellor visited India. How has the relationship been with India in the past seven years? Efforts are underway to find alternatives to China

Prime Minister Narendra Modi and German Chancellor Olaf Scholz

German Chancellor Olaf Scholz, who is on a three-day visit to India, arrived in Delhi on Thursday evening to attend the seventh inter-governmental consultations. This is his third visit to India in the past two years. He came to India twice last year. He paid a bilateral visit to India in February 2023 and participated in the G20 meeting hosted by India in September.

Diplomatic relations between India and Germany are nearly seven decades old. India was one of the first countries to establish diplomatic relations with Germany after World War II. The strategic partnership between the two countries began in May 2000 and was strengthened through the “intergovernmental consultations” launched in 2011. India is one of the few countries that has established a dialogue mechanism with Germany.

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How has India-Germany relations been in the past seven years?

India and Germany have maintained diplomatic relations for the past seven years. The two countries established strong strategic and trade relations in 2000 and are now about to open a new chapter with the visit of German Chancellor Olaf Scholz to India. Prime Minister Modi will visit Germany from June 26 to 28, 2022. He participated in the sixth intergovernmental consultations in Berlin and participated in the G7 summit hosted by Germany. Apart from this, Prime Minister Narendra Modi held bilateral talks with the German Chancellor on the sidelines of the G20 Summit in Bali in November 2022.

Modi Olaf Meet and Greet 2

Photos of German Chancellor Olaf Scholz meeting Prime Minister Narendra Modi

Talking about trade relations, Germany is India’s 12th trading partner in 2022-23. During this period, India accounted for one percent of Germany’s total foreign trade. Germany accounts for 2.24% of India’s total foreign trade. Before the outbreak of the new crown epidemic, the bilateral trade volume between the two countries had reached a record high. In 2018-19, trade between India and Germany hit a record $24 billion. Even during the COVID-19 pandemic, bilateral trade volume between the two countries has continued to grow, rising to US$26 billion in 2022-23.

The German economy is currently in recession. To overcome this problem, it needs the support of a fast-growing economy like India. India has become Germany’s main partner in the Asia-Pacific region, which is not only conducive to economic development but also to regional security.

Germany looking for alternatives to China

Therefore, people believe that German Chancellor Scholz’s visit to India is not only an attempt to strengthen bilateral relations, but also an attempt to find alternatives to China. In fact, Germany also has its own concerns about tense issues in the South China Sea, Taiwan, the Philippines and other regions. In this context, there is no better strategic partner for stability in the Asia-Pacific region than India.

Currently, China is Germany’s largest trading partner, but Germany is concerned about the ongoing trade dispute between the EU and China. In 2022, Germany’s direct investment in India will reach about 26 billion rupees, which is only equivalent to 20% of Germany’s investment in China. Germany hopes to reach at least 40% by the end of this decade. Because overreliance on China could again hit Germany as hard as it did in 2022, when Germany’s dependence on Russian gas took its toll due to the war in Ukraine.

Germany “pays attention” to Indian market

Just last week, Germany proposed a roadmap for strengthening bilateral cooperation with India in multiple areas under its “Focus on India” programme. They hope that by focusing on India, they can strengthen their control over the large Indian market and reduce their dependence on China. It is believed that Germany will increase manufacturing in India, and accordingly, 51% of German companies will increase investment next year. German companies are expected to invest approximately 4.5 billion rupees in India over the next six years. If this happens, then it will double the current investment.

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