Germany’s Merz heads to India as Berlin seeks new growth markets beyond China

German Chancellor Friedrich Merz departed for India on Sunday on an official visit aimed at strengthening economic cooperation and security ties between Europe’s largest economy and the world’s most populous nation.

The trip comes at a time when both Berlin and New Delhi are navigating an increasingly unsettled global landscape, marked by economic and geopolitical pressures stemming from the United States and China, the world’s two biggest economies.

Merz’s visit, which begins on Monday, is his first trip to an Asian country since assuming office last May. It takes place just weeks ahead of a proposed EU-India summit and amid ongoing negotiations between India and the European Union on a long-awaited free trade agreement.

India’s commerce ministry said on Friday that the proposed pact is being framed as more than a conventional trade accord, describing it as a wide-ranging partnership designed to respond to contemporary economic challenges.

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Over the course of the two-day visit, Prime Minister Narendra Modi will host the German leader in Ahmedabad, located in the western state of Gujarat, which is also the prime minister’s home state. Merz will then travel south to Bengaluru, India’s leading technology hub.

The itinerary includes joint participation in a traditional kite festival and a visit to Sabarmati Ashram, the historic residence where Mahatma Gandhi lived for many years during India’s freedom struggle.

German officials said the decision to make India the chancellor’s first Asian destination underscores Berlin’s view of New Delhi as a key strategic partner. “The visit highlights the importance Germany attaches to its relationship with India, the world’s largest democracy,” a government spokesperson said in Berlin on Friday.

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The outreach comes as Europe steps up engagement with India more broadly. European Commission President Ursula von der Leyen and European Council President Antonio Costa are scheduled to attend India’s Republic Day celebrations in New Delhi on January 26.

Submarine deal in the works

For India and Germany, security links could also be bolstered by a potential deal for German’s Thyssenkrupp Marine Systems to build six submarines for the Indian Navy in a partnership with Indian state-run Mazagon Dock Shipbuilders.

That deal remains under negotiation, but would allow India to replace its ageing fleet of Russian-built submarines and likely include technology transfer provisions that would help build up its domestic defence industry.

According to informed sources, the contract is not expected to be signed during the chancellor’s visit, but it should help move the discussions forward.

Merz will be accompanied by a large business delegation, including executives from corporate giants such as Siemens and Airbus.

“One of the main objectives of this trip is to deepen economic relations with India,” a German government official said.

For Germany’s exporters, India and its 1.4 billion inhabitants represent significant opportunities, with a bilateral trade volume of almost 50 billion euros.

Sales have slumped in China, and German firms now face fierce global competition from Chinese rivals in many industries.

German-Chinese relations have also become strained, with Beijing limiting supplies of semiconductors and some rare earth elements.

“German foreign trade is looking for growth markets, and India is precisely that,” said Florian Wenke of the state-run agency Germany Trade & Invest.

With inputs from agencies