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Asia

Merkel puts her weight behind Modi's 'Make in India' drive

India and Germany have significantly scaled up bilateral relations, signing 18 agreements in a range of key sectors designed to bolster trade, energy and defense ties. Murali Krishnan reports from New Delhi.

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Red tape out, cooperation and profits in

Addressing a joint press conference in the Indian capital New Delhi after three-hour long high-level talks, Indian Prime Minister Narendra Modi and German Chancellor Angela Merkel looked upbeat. The two countries inked 18 Memorandums of Understanding (MoU) in fields ranging from renewable energy and aviation security to human development.

"We are cooperating in areas such as economy, agriculture, internal security matters, development issues, defense matters and also in financial relations," Merkel said after a ceremonial welcome at Delhi's presidential palace.

German Foreign Minister Frank-Walter Steinmeier had said earlier that German companies were concerned about "too much red tape, infrastructure hurdles, corruption, lack of skilled labour (and) tax disputes" in India. "A reliable legal and administrative framework is indispensable for German companies in India," Steinmeier said in an interview with the Hindustan Times newspaper, while praising Modi's government for its "right" policies.

This is why one of the pacts recently signed between the two countries involved fast-track business approvals, thus eliminating red-tape and bureaucratic impediments. The agreement will ensure that German companies only have to deal with a single point of contact in the Indian administration while doing business with Asia's third-largest economy. This first-of-a-kind agreement is part of Modi's plans to attract foreign investment in support of his "Make in India" drive, which seeks to increase industrial output.

"The prospects are huge because India is just beginning its long spurt for growth," Indian Commerce Secretary Amitabh Kant told an Indo-German business delegation in New Delhi.

German Chancellor Angela Merkel talks to Indian Prime Minister Narendra Modi (L) during her ceremonial reception at the forecourt of India’s Rashtrapati Bhavan presidential palace in New Delhi, India, October 5, 2015 (Photo: REUTERS/Adnan Abidi)

It is the second meeting between Modi and Merkel in six months

Chancellor Merkel also expects Modi to re-engage in talks postponed by India earlier this year regarding a proposed free-trade agreement with the European Union.

Modi and Merkel "committed themselves to bringing about the earliest possible resumption of talks," said a joint statement issued after their talks on Monday, October 5.

Merkel's popularity in India

Speaking in English with the aid of a teleprompter, Modi thanked Merkel for having taken time to "visit India despite many concerns at home." He told the media that Germany had agreed to support some of his key projects such as "Smart Cities", "Make in India" and "Clean Ganges."

Just a week ago, PM Modi had hosted a special G-4 summit for Merkel, Japanese Prime Minister Shinzo Abe and Brazilian President Dilma Rousseff in New York, making a strong pitch for reforms in the UN Security Council (UNSC).

Referring to this at the joint press conference, Modi said: "We have a common perspective on the UNSC expansion." Merkel agreed and said "both countries were united" in finding "political solutions and not military ones" in areas affected by conflict. She singled out the turbulent situation in Afghanistan in this regard.

At the start of the press conference, Modi congratulated Merkel on the 25th anniversary of Germany's reunification and said that her "leadership is a source of confidence and reassurance at a difficult moment for Europe and the world."

Many in the audience were aware that the German Chancellor was emerging as a candidate for the 2015 Nobel Peace Prize for her handling of the European refugee crisis, and for her peace efforts in Ukraine.

"She has led the continent's biggest humanitarian response to the refugee crisis spilling out of the war-torn world, from Syria to Sudan, Libya to Iraq," said a reporter at the press conference.

Investment climate needs boost

The meeting in New Delhi was the second between Modi and Merkel in six months. The German chancellor met Modi at Hannover Messe (trade fair) in April, and is now in the South Asian country with a huge entourage comprising six cabinet ministers and a business delegation for the third inter-governmental consultations (IGC) between the two nations.

While Modi mentioned that more than 1600 German companies had already set up a global workforce in India, Merkel emphasized how trade agreements needed a bigger push for a more vibrant economic relationship.

"Economic relations with India are of great importance. I am glad that India will fast-track agreements," said Merkel.

German Chancellor Angela Merkel stands with Indian Prime Minister Narendra Modi on stage as they visit the India booth of the world's largest industrial technology fair, the Hannover Messe, in Hanover April 13, 2015 (Photo: REUTERS/Wolfgang Rattay)

Modi confirmed that Merkel supported his 'Make in India' economic drive

Germany is India's most important trading partner in Europe. The overall exchange of goods and services between the two countries was valued at around 16 billion euros last year, a drop of 1.14 billion euros from the level registered in 2013.

The significance of the meeting between Modi and Merkel and the warming-up of bilateral ties is appreciated by the experts.

Beneficial for India

"She (Merkel) is the biggest leader in Europe today. And if Modi wants projects like 'Make in India' to succeed, only Germany can give it a competitive edge," former Indian foreign secretary Lalit Mansingh told DW.

Happymon Jacob, an assistant professor in diplomacy and disarmament at the Jawaharlal Nehru University in New Delhi, said the "totality of relations" could get a further boost.

"When two economic powerhouses of Asia and Europe agree on a gamut of issues and see a mutually beneficial relationship, ties can reach the next level," Jacob told DW.

Jacob, however, pointed out that the Indian-European Union free trade agreement (FTA), which has been under negotiations for years, should be concluded soon to support the agreements that have just been signed between India and Germany.

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