Germany, India Strengthen Ties in Defense, Green Energy

German Chancellor Olaf Scholz has expressed a strong desire to deepen defense relations with India and bring their militaries closer together, following his recent meeting with Indian Prime Minister Narendra Modi. Historically, Germany has not been a major defense partner for India, but with shifting global dynamics, Berlin is now eager to support India’s efforts to reduce its dependence on Russian arms supplies. This push comes as Western countries seek to counter China’s growing regional influence.

Scholz emphasized, “Our overall message is clear, we need more co-operation, not less,” adding that Germany aims to enhance defense collaboration and foster closer ties between the two militaries. He is leading a high-level delegation to New Delhi, including members of his cabinet, in a bid to gain greater access to the Indian market, which he sees as a potential alternative to Germany’s reliance on China.

In a key defense move, German conglomerate Thyssenkrupp is one of two final bidders, along with Spain’s Navantia, competing for a $5 billion contract to build six submarines for the Indian Navy. The selection decision is expected soon.

Beyond defense, Scholz and Modi discussed strengthening renewable energy partnerships. Germany had previously pledged €10 billion in 2022 to support India’s climate goals. German state lender KfW’s DEG unit, focused on private sector growth, aims to double its investment in India to $1 billion, primarily in renewable energy and infrastructure.

Modi highlighted the transformation of India’s physical infrastructure at the Asia-Pacific Conference of German Business, attended by Scholz, calling it an opportunity for both German and Indo-Pacific companies. He underscored record investments in the sector, which presents vast possibilities for collaboration.

Scholz also advocated for expediting the long-stalled free trade agreement (FTA) talks between India and the European Union, suggesting a deal could be reached within months if both parties are cooperative. However, India’s Trade Minister Piyush Goyal cautioned that a swift agreement depends on respecting India’s agricultural sensitivities, notably the dairy industry. Germany’s Economy Minister Robert Habeck had earlier pointed out that agriculture remains the most contentious issue in the negotiations, proposing that they focus first on industrial sectors.

Despite aspirations to finalize the FTA by the end of 2023, talks have been hampered by India’s criticism of the EU’s regulatory standards as being “irrational.”