Why PM’s visit to Germany is important for India

As Prime Minister Manmohan Singh prepares to leave for a stand-alone bilateral visit to Germany on 10 April morning, here is why the visit is significant; and more significantly, why Germany is important. India and Germany have been having a ‘strategic partnership’ since 2000 but their bilateral relationship remains much below its true potential. Time has come for the two countries to take their relationship into the next gear. A whale of an opportunity is coming up to achieve what should be a strategic objective to both the sides when the Indian prime minister will be in Berlin from 10 to 12 April. It’s time that India and Germany start an institutionalized mechanism of holding annual summits – a prerogative India has thus far given only to two countries, Russia and Japan. As far as Germany is concerned, Berlin has already accorded a special status to India. [caption id=“attachment_691388” align=“alignleft” width=“380”]  German Chancellor Angela Merkel and Indian Prime Minister Manmohan Singh shake hands after news conference at the Chancellery in Berlin, December 11, 2010. Reuters[/caption] For Germany, India is the third country in Asia after Israel and China which has the mechanism of intergovernmental consultations at the highest level. For India, Germany is the only country in the world with which it has such a mechanism at the highest level. Why is Germany so important? Germany is the 4th largest economy in the world with a GDP of US $ 3.5 trillion and contributes about 20 percent of the European Union budget. This most populous country in Europe with a population of 82 million and an area of 357, 000 sq. kms is India’s biggest trading partner in Europe, its 5th biggest trading partner in the world, 8th largest source of FDI and 2nd most important partner in terms of technological collaborations. Besides, Germany, the largest economy in Europe and India’s largest trading partner in the EU, is also an important interlocutor as the India-EU discussions on a Free Trade Agreement are nearing the finish line. Foreign Secretary Ranjan Mathai gave a sense of this on Monday when he briefed the media on the prime minister’s upcoming visit to Germany. Sample his take in this context: “As far as the trade and investment agreement with the EU is concerned, we are of the view that the early conclusion of the India-EU agreement would open up new economic opportunities for both sides, and certainly that applies to the way in which we approach our economic engagement with Germany. Our negotiations have reached an advanced stage. In fact I am informed that there will be another round of negotiations in Brussels perhaps around the 15th of April, and that is when the negotiations will be taken forward. But we certainly will be discussing the matter with the German side. We expect a strong political thrust from Germany for an early conclusion of the agreement.” An important agenda of the prime minister’s Berlin visit would be to attend the second round of intergovernmental consultations, geared to deepen the bilateral relations and put this process on the fast track. The second round of Intergovernmental Consultations is scheduled to be held on11 April where Prime Minister Manmohan Singh will be leading a five-member ministerial delegation from the Indian side. External Affairs Minister Salman Khurshid, Science and Technology Minister Jaipal Reddy, Human Resource Development Minister Pallam Raju, Non-renewable energy minister Farooq Abdullah will be among the ministers accompanying the prime minister during his trip to Germany. Mathai said India and Germany had set a trade target of Euros 20 billion to be achieved by 2012. The two sides came very close to this target last year but there has been a slowdown which had its impact in 2012 and, as a result, the bilateral trade was contracted by around ten per cent. A huge importance of Germany for India, as pointed out by Mathai, is Germany’s contribution to an upgrade of technology in India. Germany is one of the handful of countries, apart from the US, France and UK, which are capable of and are giving cutting-edge technologies to India. Here is how the Indian Foreign Secretary talked about the German role in India’s nation-building: “Germany is also a significant investor in India. It is the eighth largest foreign direct investor in India and it is a crucial source of technology in several areas. I would say that our cooperation in the area of science and technology is one of the central pillars of our strategic partnership. There are at present more than 150 joint S&T projects and 70 direct partnerships between Indian and German universities in the filed of science and technology. Cooperation in this particular field has emerged as a focus area for both our countries.” An exciting opportunity that may arise in the near future is the German participation in the Delhi-Mumbai Industrial Corridor (DMIC) project, worth $70 billion when completed. The German technology would be of crucial importance in this project and India has sent feelers to Germany to come forward in India’s modernization programme. India has made presentations to the German side on investment possibilities in the infrastructure sector. The MD of DMIC was in Germany late last month and made a series of presentations on the scope and the potential of the DMIC as a good area for investment, particularly in the infrastructure industries and technology-intensive industries for Germany. This is a significant development indeed as the DMIC project is being constructed as a collaborative venture with Japan. However, the townships which will come up in the corridor will be areas of possibilities for cooperation with many foreign partners. Mathai summed up the German role thus: “Certainly Germany is one of those whom we have been targeting very specifically. I myself did a small presentation to a group of Germans on the DMIC a year ago. And … this will be taken forward.” The role of Germany in imparting technical and technological know-how to India cannot be overstated. “One of the new themes which are being talked about is electric mobility. Actually what it means is electric transport. The Germans have done a lot of advanced work on new forms of transport using electrical power transmissions. So, I think there is good potential for technology transfer from Germany,” Mathai said.