 "Intend to seek greater investment and trade ties with Germany: Singh")
Though the slow progress of the ongoing talks on the India-European Union (EU) free trade agreement (FTA) dominates the agenda of Singh’s visit to Germany, the visit is important for other reasons, too — economic and strategic.
As EU’s $3.5-trillion manufacturing workhorse and the world’s fourth-largest economy, Germany is critical to India’s quest for attracting foreign investments across a host of sectors — from the Delhi-Mumbai Industrial Corridor and the green energy sector to high-tech areas such as electric transport. With India’s current account deficit at alarming levels (6.7 per cent in October-December 2012, and expectations of a record five per cent for 2012-13), India needs to woo global investors like never before to bridge the gap. And, Prime Minister Singh is expected to do his bit during his meeting with Merkel.
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“I intend to seek greater trade and investment ties with Germany, as we continue to take steps to boost domestic investments, attract foreign investors and spur the economy back to its long-term growth potential of eight per cent. We expect to sign a number of agreements and memoranda of understanding in these areas. I will seek Chancellor Merkel’s support for an early conclusion of a balanced India-EU broad-based trade and investment agreement. I will also propose that Europe keep its doors open to Indian investors and professionals,” said the prime minister’s statement.
Though Germany recorded a dismal period in the quarter ended December 2012 (when its economy contracted 0.5 per cent), with gross domestic product growth of 0.7 per cent in 2012, it remains the only major growth engine in an area awash with recession — from the UK to Spain. As India’s largest trade partner in the 27-nation EU, Germany is also vital to the successful culmination of the India-EU FTA talks. To take the talks forward, an India-EU ministerial meeting is scheduled to be held in Brussels on April 14-15.
In 2012, bilateral trade stood at $17.37 billion, with the balance of trade in favour of Germany. While machinery, chemicals, automobile components and medical technology were the major Indian imports from Germany, key Indian exports were textiles, leather goods, gems & jewellery and pharmaceuticals.
“The consultations would focus on partnership in infrastructure, renewable energy and vocational training. Both India and Germany are in favour of a timely conclusion of the India-EU FTA,” Germany’s ambassador to India, Michael Steiner, told reporters last week.
Besides the Delhi-Mumbai Industrial Corridor, Germany is also interested in the Chennai-Bangalore industrial clusters, which could act as a gateway for several German firms. It is also eager to participate in the ‘Green Energy Corridor’, in collaboration with the Indian government, and is learnt to have planned a ^1-billion credit line for the project.
In May 2000, bilateral relations were upgraded to the level of a strategic partnership. While India is the one of the three Asian countries with which Germany has intergovernmental consultations at the cabinet level (the others are China and Israel), India has such consultations with Germany alone. Germany is also part of the G4, a grouping of four countries (India, Brazil, Japan and Germany) that support each other for a permanent seat at the United Nations Security Council.
“We will also discuss our shared interests in United Nations Security Council reforms and a broad range of global developments, including those relating to Afghanistan, West Asia and the Asia-Pacific region,” said the prime minister’s statement.
At a time when speculation is rife on concerns over India’s $20-billion jet fighter deal with France’s Dassault regarding indigenisation and the possibility of the Eurofighter Typhoon (in which Germany is a consortium country) coming back into the fray, defence ministers are not part of the intergovernmental consultations. Also, defence and civil nuclear cooperation aren’t on the agenda of the talks.
External Affairs Minister Salman Khurshid, Commerce & Industry and Textiles Minister Anand Sharma, Human Resource & Development Minister M M Pallam Raju, Science & Technology Minister Jaipal Reddy, Minister for New & Renewable Energy Farooq Abdullah, National Security Advisor Shivshankar Menon and Foreign Secretary Ranjan Mathai would join the prime minister for the joint cabinet level meeting in Berlin, the second between the two countries. The first such meeting was held in New Delhi in May 2011.
“India remains committed to a close, cooperative and mutually beneficial partnership with Germany,” the prime minister’s statement said.
HIGH STAKES
- Germany is India’s largest trade partner in the 27-nation EU
- The world’s fourth-largest economy plays a critical role in India’s quest to attract foreign investments
- Germany is vital for successful culmination of free trade agreement talks
- The European nation is part of the grouping of four countries that support each other for a permanent seat at the UN Security Council
- Germany is interested in the Delhi-Mumbai Industrial Corridor, Chennai-Bangalore industrial clusters, and the green energy corridor
- Defence, civil nuclear co-operation not on talks agenda