German chancellor Angela Merkel and Indian prime minister Manmohan Singh have announced their aim to increase bilateral trade by more than 50 percent over the next two years following a meeting in Berlin.
Singh said 'the sky's the limit for cooperation' between India and Germany
The leaders of Germany and India said on Saturday they were confident they could boost trade between the two countries by some 7 billion euros ($9 billion) over the next two years.
Speaking after a meeting in Berlin with Indian premier Manmohan Singh, German chancellor Angela Merkel said, "We have set ambitious goals. We want to increase bilateral trade to 20 billion euros by the year 2012."
Merkel said major progress had been made on a Free Trade Agreement
Given the current trade volume of around 13 billion euros, Merkel admitted both countries would have to "work hard" to achieve the aim, but expressed confidence that India's growing economy would provide mutually beneficial opportunities.
Potential free trade agreement
"The sky is the limit for our cooperation," Singh said, praising India's "excellent" relations with Germany. He called Germany the "economic powerhouse of Europe" and said the country was India's largest trading partner in Europe.
The Indian premier said there was vast "untapped potential" for high technology trade between India and Germany.
Singh was visiting Berlin after holding talks with other EU leaders in Brussels on Friday, adding momentum to proposals to set up a huge free-trade agreement in the first half of 2011 between Europe and India. EU officials hope that such an agreement would double trade flows to Europe, by scrapping 90 percent of remaining tariffs.
Merkel said that "major progress" had been achieved towards making the Free Trade Agreement a reality. The agreement could potentially unite over 1.5 billion people in Europe and India.
"Both sides have to take a step towards each other," she said. "Everyone has to be ready to compromise. This is true for Europe and it is true for India."
Singh was in Brussels for talks on Friday
The EU wants to square the trade deal with legislation on child labor and the environment, but India says those issues have nothing to do with trade.
Cooperation on UN Security Council
Singh said he would support Germany's "key role in ensuring financial stability and economic recovery in the eurozone." He said he sees the economic security of Europe as crucial for global economic recovery.
At their meeting in Berlin, the two leaders also stressed their cooperation on the United Nations Security Council, where they are contenders for permanent membership, alongside Brazil and Japan. India and Germany start a two-year Security Council rotation in January.
"Of course India and Germany will try to drive United Nations reform so that a permanent seat for our countries will become a reality," Merkel said.
Merkel will visit India next year to mark 60 years of diplomatic relations between the two countries.
Author: Joanna Impey (AFP, dpa)
Editor: Ben Knight