Indo-German Development partnership at 60

The nations’ intergovernmental consultations, which started in 2011 in New Delhi and are held biennially, have become occasions to sign important development cooperation agreements

August 26, 2018

The total bilateral cooperation between India and Germany since 1958 has amounted to US$18.6 billion, with a focus on renewable energy, smart cities, urban mobility and workforce development

Germany and India signed agreements in August 2018 with a total valuation of US$745 million in the priority areas of renewable energy and energy efficiency and sustainable urban development

In 2000, the countries adopted the “Agenda for the Indo-German Partnership in the 21st century” laying the foundation for a Strategic Partnership, allowing improved ties in trade to technology

With bilateral trade touching US$22 billion in 2017-18, Germany is India’s strongest trading partner in Europe; Germany is the 7th largest foreign investor with US$11 billion over 2000 to June 2017

India and Germany celebrate 60 years of their development partnership this year. As flourishing democracies, their interests align in creating an inclusive, sustainable and predictable world, based on the rule of law. Their bilateral development cooperation programme began in 1958, and initially focused largely on industrial growth, poverty reduction and rural development. Today, the major thrust areas of German expertise in India are energy, environment and sustainable development. Germany also supports Indian priorities by providing financial and technical cooperation in forms of concessional loans and technical advisory. This is being done through collaboration in programmes related to renewable energy, energy efficiency, environmental protection, climate change, smart cities, urban mobility, management of natural resources, cleaning up india’s rivers, promotion of small and medium enterprises,  improvement of vocational training capacity and employability as well as promotion of Indian women entrepreneurs.

The nations’ intergovernmental consultations, which started in 2011 in New Delhi and are held biennially, have become occasions to sign important development cooperation agreements. In 2013, at the second intergovernmental consultations in Berlin, 10 agreements were signed in the fields of vocational education and training (VET), Railways, Science and technology, and Renewable Energy. In 2015, German Chancellor Angela Merkel visited New Delhi for the third Intergovernmental consultations. Both countries emphasized their commitment towards achieving sustainable development goals (SDGs), renewable energy and climate friendly urban development. In 2016, German cooperation focussed on projects related to Ganga rejuvenation with a funding of over US$3 million. Another agreement on climate friendly urban mobility saw movement of US$12.8 million in grant for four projects as part of a US$233 umbrella project. German funding has also covered projects related to forestry, urban sanitation infrastructure projects.

In 2016, a skills development project in India focused on adopting elements of the German dual system in three selected clusters, including an automobile cluster in Maharashtra. Additionally, an Electronics cluster in Bangalore was initiated for a period of three years with US$3 million made available by Germany. In 2017, during the 4th intergovernmental consultations in Berlin, 12 agreement were signed. Meanwhile, an Indo German agreement on sustainable urban development and smart cities in India, signed in February 2018, will support approaches for sustainable urban development in the area of integrated planning, provision of affordable housing and basic services, with particular focus on water, wastewater and solid waste management and mobility. Germany will contribute US$9.3 million for the project over three years.

Strong base for Indo-German ties

In 2019, the Nagpur metro in Maharashtra will start operating, financed with a US$584 million loan from German government-owned development bank, KfW. The project also covers a comprehensive mobility concept with e-buses and rental bicycles, and two-third of the route will be powered by solar energy. While the metro will be driven by German technology from Siemens, the other part of the line is being funded by France. The strong association led to Germany and India signing agreements in August 2018 with a total valuation of US$745 million in the priority areas of renewable energy and energy efficiency, with two large programmes that Germany considers flagships: the green energy corridor and Indo–German solar partnership. With this, the total bilateral cooperation between India and Germany since 1958 has amounted to US$18.6 billion. The latest cooperation also covers sustainable urban development, infrastructure, urban mobility and climate resilience that go along with India’s ambitious Smart Cities Mission.

The development of partnership between the two countries is supported by a robust all round cooperative relationship. After World War II, India was one of the first countries to recognize the FRG and in 1951, FRG established its Consulate in Bombay, followed by the opening of its Embassy in new Delhi in 1952. In 1956, Prime Minister Jawaharlal Nehru visited FRG and met its first Chancellor, Konrad Adenaur. The Indo-German Chamber was established in the same year. In 1957, the Max Mueller Bhavan was founded in Calcutta. In 1959, the Rourkehela steel plant and IIT Madras were set up with FRG collaboration. The relationship grew significantly after the unification of Germany. In 2000, both countries adopted the “Agenda for the Indo-German Partnership in the 21st century” laying the foundation for a Strategic Partnership. In 2006, PM Manmohan Singh and chancellor Angela Merkel jointly inaugurated the Hanover Messe, and established the indo-German energy forum. Same year, the Indo German Defence Cooperation Agreement was signed.

Today, there are more than 150 joint S&T research projects and 70 direct partnerships between universities of both countries. Starting in 1999,  ISRO has launched 10 German satellites

The Indo German Science and Technology center (IGSTC) was formed with joint funding in 2008 in Gurugram, near Delhi. The mandate of the center has been extended till 2022 with a contribution of US$4.7 million per year from each side. IGSTC connects academia and industry from both countries in areas such as advance manufacturing, embedded systems, ICT of automobiles, renewable energy, food security, clean water and health care technologies. Germany is one of the top three partner countries of india in bilateral S&T cooperation. India has invested about US$16.3 million for the construction of an india focused beam line and access to the synchrotron facility at Hamburg. India is also an equity shareholder with an investment of US$42 million in the construction of the international “facility for antiproton – Ion research”at Darmstadt. These state of the art facilities have enabled Indian scientists to conduct high impact frontier research in material sciences, nuclear and high energy physics in collaboration with German researchers.

Trade to technology-focussed partnership

Today, there are more than 150 joint S&T research projects and 70 direct partnerships between universities of both countries. Starting in 1999,  ISRO has launched 10 German satellites. The German Academic Exchange Service (DAAD) has been encouraging exchange and research by young scholars and scientists. Under the GIAN initiative, so far 80 German academics have been selected for teaching in higher educational institutes in india. Ayurveda is undergoing its first trial project in Europe for osteoarthritis of the knee at the Charite medical university in Berlin. The “Year of Germany in India” (2011-12) and “Days of India in Germany” (2012-13)  marked 60 years of Indo-German friendship. In 2017, PM Narendra Modi visited Germany twice, first on a state visit and later to attend the G20 Summit. In March 2018, German President Frank-Walter Steinmeier made a state visit to India. The visit focused on clean energy technologies. In April 2018, PM Modi once again stopped by in Berlin to maintain the momentum of high level visits.

With bilateral trade touching US$22 billion in 2017-18, Germany is currently India’s strongest trading partner in Europe. Germany is the seventh largest foreign investor in India with US$11 billion of investments from April 2000 to June 2017. The Indo-German trade is well diversified, composed mainly of manufactured products. According to the Indian Embassy in Germany, there are more than 1,600 Indo-German collaborations and over 600 Indo-German joint ventures in operation. The VW subsidiary Skoda recently announced an additional investment in India of US$1.2 billion by 2021. The two sides have agreed to set up Make in India Mittelstand (MIIM) programme for facilitating investments by German Mittelstand and family owned companies in India. Currently, 113 German MSMEs are being facilitated through the MIIM programme for their entry and investment in India. A fast track system for German companies has also been set up under the Department of Industrial Policy and Promotion in India.

Besides the established institutional mechanisms in defence, science and technology and the intergovernmental biennial meetings, India and Germany also work with each other through foreign office consultations, the high technology partnership group, Indo–German energy and environment forums, and working groups on skills development, automotive components, agriculture, coal, tourism, water and waste management. They are partners in UNSC expansion, within the framework of the G4. They consult each other in G20, on global issues such as climate change, sustainable development, UN issues, disarmament and non-proliferation, export controls, East Asia, cyber Security and Policy Planning. The Indo-German  partnership is also firmly anchored in the tradition of mutual academic and cultural exchange. Meanwhile, Karnataka and Bavaria, Mumbai and Stuttgart, Maharashtra and Baden–Wurttemberg have twinning arrangements in place.

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