German Chancellor Olaf Scholz will embark on a three-day visit to India from Thursday to hold talks on defence and economic ties which are likely to deepen engagement between the two countries over the strategic Indo-Pacific region.
Scholz, who succeeded Angela Merkel as chancellor in December 2021, has consistently signalled his intent to forge ties with New Delhi against the backdrop of the West’s China plus-one strategy on trade and amid geopolitical tensions.
The German chancellor visited India twice last year, once for a bilateral state visit in February and the second time to attend a G20 leaders’ summit in Delhi in September. His latest trip comes at the invitation of Indian Prime Minister Narendra Modi, according to a statement by India’s Ministry of External Affairs.
“I think what is happening is certainly a German reassessment of India. For so long, India was not really on their radar, but Germany is trying to transform its relationship with India into a strategic one and nudge the European Union [EU] in that direction as well,” said Harsh Pant, an international-relations professor at King’s College London.
Germany is India’s largest trading partner in the EU and is also one of its key trading partners worldwide. In the financial year ended March 2023, India’s bilateral trade with Germany stood at US$26 billion while the number of German companies in the country was at 2,000 as of July last year, said the India Brand Equity Foundation.
Military ties between India and Germany have been minimal in the past, but last year’s visit by German Defence Minister Boris Pistorius marked a turning point as German and Indian companies signed a pact that aims to build six advanced stealth diesel-electric submarines.
“What is interesting is that radar and submarine technology is on the table in the talks. Germany has world-class submarine technology, but they have been reticent about sharing it with the world in the past,” Pant said, citing how the nation sent Leopard 2 Tanks to aid Ukraine last year only after weeks of Western pressure.
Stringent domestic laws on exports of sensitive military technology have hampered Germany’s defence exports in the past. But the European nation appears to be pivoting towards relaxing the curbs on military technology towards India.
“That Germany is willing to make changes for India is a combination of various things, including a realisation that its bet on China has not really paid off,” Pant said.
The Ukraine war had also served as a “wake-up call” to Germany to broaden defence cooperation including in the Indo-Pacific region where India was a key player, he added.
The talks with Germany are happening at a time Delhi has embarked on a fleet expansion of conventional and nuclear submarines to reduce a growing technological gap with Beijing that boasts of one of the most powerful naval fleets in the world.
India has been keen on securing advanced German submarine technology to protect its security interests in the Indo-Pacific region, where it has been vying with China for influence and securing vital trade corridors that are important for both nations.
Pant said Scholz’s talks with Modi were also likely to discuss speeding up a potential free-trade agreement with the EU. Germany’s outsize role as the largest economy in the EU could expedite a deal that had been in the pipeline for years, he added.
TS Vishwanath, a principal adviser at international trade consultancy ASL-Legal and a trade expert, said Scholz’s visit was likely to focus on bilateral ties between India and Germany, though it could touch upon relations with the EU as well.
“There is a lot which is happening between India and Germany. For one, there is the defence deal between India and Germany on submarines. The other is German companies are doing well in India and they want to expand their operations,” he said.
A substantial part of the discussions was likely to centre around improving the ease of doing business in the country, Vishwanath added.
Delhi has in recent years been trying to cut its notorious reputation for red tape that has in the past hampered foreign investments.
The talks could also include discussions to allow more Indian students to study in Germany as the country has emerged as a top educational destination, Vishwanath added.
Ahead of the German chancellor’s visit, Indian business daily Mint reported on Sunday that Germany planned to more than quadruple the number of visas for skilled workers from India to 90,000 annually from 20,000 amid a shortage of workers in the European nation.
India’s vast pool of educated young people on the other hand often struggles to find appropriate employment.
Vishwanath said a greater role for India in brokering peace between Russia and Ukraine and settling the escalating tensions in the Middle East between Israel and Iran was also likely to be on the agenda.
Delhi has maintained an even distance between the warring sides and factions involved in both conflicts, advocating a path of dialogue to resolve outstanding issues towards reaching a peace settlement.