Context:

• German Chancellor Angela Merkel visited India from 31st October - 1st November 2019 for the fifth round of the biennial Inter-Governmental Consultations (IGC).

Key takeaways of the visit: Artificial Intelligence: AI collaborations are happening in Agriculture such as precision farming with the aim to increase efficiency and to save resources as well as reduction of food losses and waste. Counter terrorism

• Agreement on information exchange was signed between the two countries, including the sharing of best practices and technology will be “an effective tool for combating terrorism, illicit drug trafficking through exchange of information.”

Climate and Sustainable Development

• Indo- German Partnership on Green Urban Mobility : Germany pledged to invest €1 billion over the next five years on environmentally-friendly urban mobility in India.

Cultural cooperation

• Other agreements signed between the two countries include cooperation between the National Museum, and the Stiftung Humboldt Forum in Berliner Schloss and between All India Football Federation (AIFF) and Deutscher Fußball-Bund e.V (DFB).

Evolution of Indo-Germany ties

• India was one of the first countries to recognise the Federal Republic of Germany and waived its right to claim reparations since Indian soldiers had fought in the war against Germany. 
• The Cold War and India's opting for non-alignment put Germany and India in different blocs, as the Federal Republic of Germany was integrated into the Western camp with East Germany in the Soviet bloc.
• The closeness in relation with Germany started in 2000 when special green cards were introduced for Indians to encourage Indian students to go to Germany.
• Successful Indo-German Solar Partnership was founded in 2015 and the cooperation on Green Energy Corridors was established in 2013.

Other facets of relationship: Economic & Commercial Relations: 

• • Germany is India's largest trading partner in Europe. 
  • Germany is the 7th largest foreign direct investor in India since April 2000. 
  • Setting up of a "fast track mechanism" for approving and assisting German investments in India. Japan is the only other country which enjoys this special facility.

•  ‘Make in India Mittelstand’ (MIIM) Programme 

• • To facilitate the entry of German Mittelstand (Medium Sized Companies) in India, the Embassy of India, Berlin runs the Make in India Mittelstand (MIIM) Programme since September 2015. 

Defence Cooperation: 

• India and Germany have a 'Strategic Partnership' since 2001, which has been further strengthened with the Intergovernmental Consultations (IGC) at the level of Head of Governments which allows for a comprehensive review of cooperation and identification of fresh areas of engagement. 
• India-Germany Defence Cooperation Agreement (2006) provides a framework for bilateral defence cooperation. 
• India has invited Germany to take advantage of opportunities in defence production in the defence corridors in UP and Tamil Nadu.

Environmental cooperation:

• Clean Ganga initiative: Germany has announced to provide a soft loan of euro 120 million to India to help clean the holy river Ganga. Germany has successfully done it for its “Father Rhine River”.
• Green mobility: Germany pledged up to Rs 8,900 crore over five years to improve solid and liquid waste management and provide climate-friendly urban transport like the Metro in Nagpur, which is the single biggest project of German financial cooperation in India

Energy cooperation: Germany’s strategic Green Energy Corridors project will build transmission lines transferring clean energy to different parts of the country Sister States: Karnataka and Bavaria have Sister States arrangement since 2007. Mumbai and Stuttgart are sister cities since 1968. In January 2015, Maharashtra and BadenWurttemberg signed an MoU to establish a Sister State relationship. Loans: Germany’s Official Development Assistance (ODA) towards India, are in sync with India’s priority sectors and SDG 2030 including solar energy, smart cities, and environment. Diaspora in Germany: About 1.5 lakh strong Indian diaspora mainly comprises of professionals, technocrats, businessmen/traders, students and nurses.  Significance of Indo-German relations  

• India stands to gain from Germany as Germany is an economic powerhouse just as Germany stands to gain because she is a promising market that is growing and developing. 

• High end manufacturing: Germany is famous for internationally acclaimed high-end brands like Daimler, Siemens etc.. India is an obvious choice for German companies due to the availability of potential markets and talent pools.
• Renewable sector: 
  • India and Germany have signed an agreement on technical cooperation under the Indo-German Energy Programme – Green Energy Corridors (IGEN-GEC).
  • Germany also provides a loan of 7 million euro for training activities in the photovoltaic solar rooftop sector.

Post Brexit scenario: The kind of Europe that emerges post Brexit is critical for India. Thus, we need to have a very good economic relationship with Germany as well as France in the post Brexit era.

• • Germany's role in reviving the India-EU free trade talks : 
    • India has made a special appeal to Merkel to take the lead in this context. 
    • India had called off talks when the EU banned 700 Indian pharma companies from exporting to EU because one company was found wanting on quality standards.

• Global politics:

• • • Germany is unhappy with the US as NATO is not being supported strongly by USA and also that President Trump is reluctant in supporting the Paris climate change. 

• Today the perception is, the US President is turning back on Europe and India is reaching out to Europe. 

• International cooperation: 

• • UNSC reforms: India and Germany are members of G-4 along with Brazil and Japan. The G4 nations support each other’s bids for permanent seats on the United Nations Security Council.
  • FATF: Both countries are also members of the Financial Action Task Force (FATF).

• WTO reforms: 

• • Both nations strongly support for a rules-based international trading system with the WTO at its centre. 
  • The recent joint statement called for restoring the full functioning of the WTO dispute settlement system and reform the WTO without undermining its fundamental principles such as Special and Differential Treatment, consensus based decision making and development objectives.

Concerns: The issue of the Bilateral Investment Treaty (BIT): 

• The “Mittelstand” companies, object to India’s stand on bilateral investment treaties. 
• India has been a leader fighting for the developing countries in multilateral trade negotiations.
• India has taken a stand on bilateral investment treaties wherein it is insisting that an investor has to first exhaust all domestic legal options before it can take a case towards international arbitration.

Slowdown in India's auto sector

• German firms have raised a few other concerns, including slowdown in India's auto sector, lack of stable policymaking and ad-hoc decisions which they say have affected buyer sentiment and created uncertainty among carmakers.

Germany and China 

• Germany wants that European Union (EU) should sign a Memorandum of Understanding (MoU) with China to participate in the Belt and Road Initiative (BRI) as a bloc, rather than individually. India officially opposes BRI.

Russia-Ukraine crisis: 

• The German government has called on both Ukraine and Russia to de-escalate following a military crisis near the Crimean Peninsula. 
• But India was the first major country to recognize the annexation of Crimea .

India EU Free Trade Agreement

• A free trade pact with India has been a long-pending demand from Germany, which is India's largest trading partner in Europe. Germany is demanding a new attempt for an EU-Indian FTA
• Launched in June 2007, the negotiations for the proposed pact have witnessed many hurdles with both sides having major differences on key issues like intellectual property rights, duty cut in automobile and spirits, and liberal visa regime.

Mutual Legal Assistance Treaty (MLAT) : 

• Germany has refused to sign the Mutual Legal Assistance Treaty (MLAT) with India, citing the fact that India is yet to abolish the death penalty for heinous offences and terrorism.
• The aim of the MLAT is to secure bilateral cooperation against various forms of crime such as terrorism, drug trafficking, money laundering and counterfeiting of Indian currency notes.

Way forward: Germany can invest  in smart cities; modernization of railway networks and stations to setting up of high speed rail corridors; generation of renewable energy to construction of transmission and distribution networks.   Digital India: German and Indian digital companies should jointly work towards further enhancing the scope of market opportunity and bilateral investments in each other’s countries and creating greater bonds between their thriving tech ecosystems.  India-EU free trade agreement: India and Germany should go for the speedy conclusion to the agreement. India should also safeguard its interest while negotiating bilateral investment treaties. e-Mobility : It is being envisaged an important area of collaboration, including under the already well-established Joint Working Group on Automotive. Embracing International Standards and Certifications: This can strengthen the competitiveness of the Indian industry and support the integration of India in global and regional value chains Use Online Platforms for Easy and Early Access of Information on Technical Regulations: The costs for collecting required information are a major factor for companies when it comes to technical regulations, which are complex and frequently changing.  Leveraging soft power: India stands out as a leading liberal democratic state. It can entice Europe with the values which it espouses.