German Federal Chancellor Friedrich Merz and Indian Prime Minister Narendra Modi on Monday announced a slew of bilateral alliances, spanning defence, technology, upskilling, renewable energy, trade, investment and mobility. These are expected to strengthen the ties between German and Indian economies, which are the third and fifth largest respectively in nominal GDP terms, with the latter to soon become the fourth largest.
Both leaders committed to exploring newer fields to boost bilateral trade and partnerships, including SMEs, startups, digitalisation, Artificial Intelligence (AI) and innovation-driven enterprises.
What did PM Modi say?
During the joint press conference, PM Modi hailed 25 years of India-Germany strategic partnership, and reaffirmed India’s commitment to cooperating with Germany across different industries. Merz also spoke of strengthening both countries’ relations over aspects such as defence, global supply chain diversification, knowledge-sharing and innovation. Merz saw the possibility that the European Union and India could sign a free trade agreement as early as the end of this month.
The presidents of the European Commission and European Council would travel to India at the end of January to sign the agreement if it is finalised by then, Merz said.
He said stronger bonds between both countries could lead to India having to be less dependent on Russia, a statement that came in the backdrop of the steep rise in India’s oil imports from Russia over the last couple of years, and the 25% additional penal tariff Indian goods face in the US market as a result.
What did Merz say?
As regards defence, both leaders welcomed outcomes for military cooperation through joint exercises, training and exchanges of senior officials, signing a Joint Declaration of Interest to develop a Defence Industrial Cooperation Roadmap.
Merz said, “In the moment we are meeting here, the world is increasingly marked by power politics. Rough winds are blowing and we have to brace ourselves.”
India-Germany trade surpassed $50 billion in 2024, which accounts for over 25% of India’s trade with the European Union (EU). Modi said: “More than two thousand German companies have been present in India for a long time. This reflects their unwavering confidence in India and the immense opportunities that exist here.” Merz added, “Countries like India and Germany have been focusing on free trade and open markets and we shall continue to do so in the face of rising protectionist policies.”
Renewable energy was also prioritised by both leaders, reaffirming deeper technological, commercial and regulatory collaboration on the joint Green Hydrogen project. An MoU between the Petroleum and Natural Gas Regulatory Board (PNGRB) and the German Technical and Scientific Association for Gas and Water Industries (DVGW) was also signed, wherein AM Green would supply Green Ammonia to Germany-based Uniper Global Commodities.