Germany can Soon be One of India’s Top Trade Partners : Daily Current Affairs

Relevance: GS-2 : Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Key phrases: India-Germany Bilateral Ties, The Indo-German Chamber of Commerce (IGCC) , Work Plan 2022, Economic Relationship, Indo- German Trade Relationship,

Why in News ?

  • Recently, India and Germany signed a work plan for cooperation to strengthen quality infrastructure, reduce technical barriers to trade, enhance product safety and strengthen consumer protection.
  • The Work Plan 2022 was signed during the virtually held 8th annual meeting of the Indo-German Working Group on Quality Infrastructure.
  • It was led by the Indian Ministry for Consumer Affairs, Food and Public Distribution, and the German Federal Ministry for Economic Affairs and Energy.

Key Highlights

  • The areas identified for collaboration include mobility, energy, circular economy, smart and farming/ agriculture.
  • It also includes medical devices, digitalisation (artificial intelligence, Industry 4.0 and other new technology areas), machinery safety, medical devices and equipment and market surveillance.
  • The Work Plan 2022 signed virtually during the meeting would pave the way forward for collaboration towards well functioning and resilient systems of quality infrastructures.

About India - Germany Bilateral Ties

  • There’s a lot that unites India and Germany.
  • Both are leading democracies and share a passion for liberal thought, ingenuity and social inclusivity.
  • The land of Beethoven, Karl Marx, Nietzsche and Schopenhauer stands out for its pursuit of excellence in automotive design, engineering, electronics, culture and the arts.
  • Battered by two World Wars, it was Germany’s resilience and a work-focused culture that placed it in the global spotlight.
  • Just as Indians are wowed by the open-air concerts, exhibitions, architecture and heritage walks of Germany, Bollywood is among India’s biggest cultural exports to the EU country.
  • Traditional healing practices appeal to people in both countries.
  • Germany and India have pacts to promote ayurveda, yoga and naturopathy, unani, siddha and homeopathy (Ayush).
  • According to a study by market research institute Gesellschaft für Konsumforschung, there are over 3 million yoga practitioners in Germany.

Economic Relationship

  • Background
    • Though India and Germany have a trade history of over 500 years, this year marks 66 years of AHK Indien, the Indo-German Chamber of Commerce (IGCC), and both the nations look forward to new ways to enhance cooperation.
    • Bilateral ties are on the upswing in almost every area.
    • Germany is India’s 6th largest trade partner.
    • Despite the pandemic, Indo-German trade increased by 19% in the first 11 months of 2021 over 2020.

The Indo-German Chamber of Commerce (IGCC)

  • Established and incorporated in the year 1956.
  • The Indo-German Chamber of Commerce (IGCC) is the largest German bi-national Chamber abroad and the largest Chamber of Commerce in India.
  • It works in close cooperation with the Chambers of Industry and Commerce in Germany (IHKs) and the Association of German Chambers of Industry and Commerce (DIHK).
  • Members
    • The Indo-German Chamber of Commerce has over 4500 members.
    • Members can be organizations and individuals of any nationality.
    • They enjoy benefits like attending events, networking, interacting with peers and industry leaders, staying updated on economic and policy changes relevant to your business, and many more.
  • Headquarter
    • Mumbai
    • IGCC’s branch offices are located in Delhi, Chennai, Pune, Kolkata, Bangalore.
  • Significance of IGCC
    • At the IGCC, they work closely with the embassy and general consulates as well as other government entities like the Federal Corporation for International Cooperation (GIZ) and German Trade and Invest (GTAI) to strengthen bilateral ties.
    • Germany is looking for skilled migration and that’s a big zone of opportunity for Indians.
    • The IGCC helps firms spot and train talent.
    • Various programmes have been set up to facilitate business opportunities in India, such as the Fast-Track-System for German companies or the Make-in-India Mittelstand programme.
  • Business Ties
    • More than 1,800 German companies have business relations with India, the majority of which have subsidiaries or joint ventures.
    • There are more than 1,600 Indo-German collaborations and over 600 Indo-German joint ventures in operation.
    • German firms have created hundreds of thousands of job opportunities in India.
    • Nearly 565 Indian companies are in Germany and they have added to its growth story.
  • FDI
    • Germany has been the 7th largest foreign direct investor in India since January 2000.
    • German FDI in India from April 2000 to September 2021 stood at $13.4 billion.
  • India’s Export
    • Among the significant Indian exports to Germany are chemicals, textiles, apparel and machinery.
  • India’s Import
    • Important German imports to India include machinery, vehicles and chemicals.

Development Cooperation

  • Prime Minister Narendra Modi and German Chancellor Olaf Scholz have sought to deepen mutual ties.
  • The two countries have pacts on metros, Namami Gange, green transmission lines, smart cities, high-speed railways and solar rooftop projects.
  • The two leaders have agreed to diversify bilateral cooperation and to focus on collaborations for climate action and green energy.
  • The importance of the relationship is highlighted in the ‘Indo-Pacific Guidelines’ adopted by the German government in September 2020, covering various avenues from security to open trade and sustainability.

Science and Technology Cooperation

  • Technology expertise has always been the hallmark of German companies, with top brands like Mercedes-Benz, Volkswagen, BMW, Bosch and Siemens and more.
  • Both countries are poised to drive further cutting-edge innovation.
  • The High Technology Partnership Group plays a major role in developing international supply chains and boosting cyber security, both vital to growth.
  • There are more than 150 joint S&T research projects and 70 direct partnerships between Universities of both countries.
  • India’s scientific establishments have close partnerships with German R&D institutions, including the Max Planck Society, Fraunhofer Laboratories and the Alexander von Humboldt Foundation.

Culture Cooperation

  • The cultural salad bowl of Germany deserves special mention.
  • German universities already attract the highest number of Indian students among European countries.
  • Besides world-class education, Indian students have multiple work opportunities in an ecosystem that welcomes diversity and encourages critical thinking.
  • Germany offers a host of activities for Indian travelers, more than 25,000 castles, assorted nature trails, harbor towns, and a wide range of culinary and hospitality experiences.

Conclusion

  • Covid has exposed the fragility of the world to force-majeure events.
  • To bounce back from covid disruptions, aspirations will need to be aligned with resilience, and collaborations between the two countries could open up new revenue streams and boost economic recoveries.
  • The shared interests of Germany and India in a multipolar global order, with a panoply of ties across culture, trade, education, technology, commerce and climate action, could help usher in even better economic growth as we all move to build back.

Source: Livemint, Business-Standard

Mains Question:

Q “The shared interests of Germany and India in a multipolar global order could help usher in better economic growth as these two nations move to build back.” Discuss.