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German Chancellor Olaf Scholz on Friday (October 25) expressed Germany’s interest in accelerating negotiations for a comprehensive free trade agreement (FTA) between India and the European Union (EU). He voiced optimism about concluding the deal “in months rather than years.” Talks, which resumed in June 2022 after a nearly decade-long hiatus, have faced obstacles, particularly over EU demands regarding India’s dairy market.
Scholz’s comments came during his three-day visit to India, where he met with Prime Minister Narendra Modi to co-chair the seventh Intergovernmental Consultations (IGC) at Hyderabad House.
Germany’s Economy Minister Robert Habeck noted that agriculture remains a sticking point in negotiations. He proposed that the EU and India initially focus on industrial sectors to progress more smoothly. Union Trade Minister Piyush Goyal added that a swift agreement could be achieved if both sides addressed each other’s sensitivities.
Germany is one of India’s top trading partners within the EU, with exports to Germany reaching $10 billion and imports from Germany at $16.7 billion in the financial year that ended on March 31, 2024.
Defence and economic partnership
Scholz also expressed a strong commitment to deepening defence and economic partnerships with India. This aligns with earlier reports that speculate a shift in Germany’s foreign policy which includes reducing its dependence on China and forming closer ties with New Delhi.
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Germany has historically maintained limited defence cooperation with India, which has long relied on Russian military equipment. However, Scholz announced plans to bring the German and Indian militaries closer, stating, “Our overall message is clear, we need more co-operation, not less.”
The Chancellor’s visit included members of his cabinet and high-ranking officials from German industry. This comes amid heightened concerns from the West over China’s rising influence.
As a part of economic “de-risking,” Scholz emphasised the need for “diversification” over dependence on a single country, specifically mentioning critical raw materials and technology supplies.
Joint ventures and collaborations
German conglomerate Thyssenkrupp is also looking to collaborate with Indian firms to produce six conventional submarines. The project is valued at $5 billion and is critical for the Indian Navy. The German bid is currently in competition with Spanish company Navantia.
Scholz further highlighted growth in sectors such as aviation, railways, and automotive industries, where both countries are pursuing joint initiatives.
Skilled migration to Germany
Chancellor Scholz highlighted Germany’s commitment to attracting skilled Indian professionals to its workforce, addressing a demand for talent across key sectors. Scholz said that India represents the largest group of foreign students at German universities and that the number of Indian professionals in Germany increased by 23,000 last year alone. To support this, Germany is digitising its visa processes to streamline applications and reduce irregular migration.
“Germany is open for skilled workers, but we retain control over our immigration policies,” Scholz said.
(With agency inputs)
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