Steiner, who would be leaving India next week after ending his tenure as ambassador to New Delhi, said "this is one issue that could have been avoided. It could have been handled slightly differently."
The ambassador was addressing a small gathering at his residence where a recipe book authored by his wife was launched.
He hoped that the German language issue "will be back on track in interest of the kids who want to learn the language" beyond the Indian ones.
"The superpower is women. The biggest task India has is to unleash its potential," he said.
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Steiner said the "cocoon of patriarchism needs to be lifted".
The HRD Ministry had last year decided to drop the German language in favour of Sanskrit for over 70,000 students across 500 Kendriya Vidyalayas from classes VI to VIII.
India follows a three-language policy with 22 scheduled languages, 125 constitutionally recognised languages and 1600 dialects.