"We have made substantial progress in resolving this issue... And we are working to have (it) signed on the sidelines of the inter-governmental consultations. I am optimistic that the issue will be resolved," German Ambassador Martin Ney told reporters here.
As per sources, under the broad understanding between the two sides, India will continue to teach German as an additional language in keeping with its three language policy while Germany will promote Indian languages, including Sanskrit, in their educational institutions.
However, in November last year, the Human Resources Development ministry had decided to discontinue teaching of German as an alternative to Sanskrit and cited "national interests" for its decision.
Germany had criticised the decision and the issue was also raised by Merkel during her meeting with Modi on the sidelines of the G-20 summit in Brisbane in November last year. Modi had assured her at the time that his government will look into the matter and try to work out an amicable solution.