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Asia

Why India and Germany need each other

Indian PM Modi did not give German Chancellor Merkel his usual hug. Nevertheless, a handshake was quite sufficient, as both leaders consider themselves strategic partners, reports Katja Keppner from New Delhi.

On Tuesday morning, the machines at Bosch's factory hall in the Indian city of Bangalore were quiet "for safety reasons and to better understand what we say," said the company's tour moderator in his cordless microphone.

Among those visiting the factory were German Chancellor Angela Merkel, who was wearing a pink jacket, and Indian Prime Minister Narendra Modi, who had a somber expression on his face. Merkel joked around with the trainees who were present to respond to the Chancellor's questions. The German leader also asked mostly technical questions given her expertise as a physicist.

In southern India, Bosch operates its largest development center outside Germany. The German electro-technical giant employs around 12,000 people in Bangalore and Coimbatore alone. On a national level, the figure is around 30,000.

German Chancellor, Angela Merkel, right, and Indian Prime Minister Narendra Modi smile after receiving souvenirs depicting the logo of 'Make in India' campaign during their visit to German engineering company Bosch's vocational centre in Bangalore, India, Tuesday, Oct. 6, 2015 (AP Photo/Aijaz Rahi)

India has what Germany lacks – the workforce

The firm has also built a training facility for its own needs, as it has been unable to find the skilled workers that it desperately needs. This vocational training center has become a model for the rest of India. For instance, there are currently 15 percent women trainees in the electronics sector of the company.

India cannot afford to sit back

"Skilled India" is the motto PM Modi recently presented as part of his plans for the next seven years to train some 400 million Indians. It is a mammoth project, and Germany has offered its assistance.

According to an Indian government report, less than three percent of the country's population is actually well trained and skilled. Every year up to 15 million young people enter the labor market. But while these numbers represent a huge potential, they are also a potential hazard as the majority of these people are likely to remain without training and perspective.

India has what Germany lacks: a large workforce. The Chancellor emphasized how urgently her country needs skilled workers given Germany's ageing society, and this is why she has already eased the recruitment policy for foreign professionals. And as Modi stated: "We cannot afford to sit back. We want to expand the sectors in which Germany is strong. We are working to make the conditions as favorable as we can."

Quick implementation

During Merkel's trip to the South Asian country, India and Germany signed 18 agreements in the areas of education, energy, infrastructure, the construction of India's "Smart Cities," and the cleaning of its polluted rivers. But the implementation of these bilateral deals is painstakingly slow.

This is why German Foreign Minister Frank-Walter Steinmeier called for bureaucratic hurdles to be urgently removed. "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.

Merkel and Modi agreed to introduce fast-track business approval mechanisms to 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. The Indian government wants to attract mainly manufacturing companies. Given China's ongoing economic slowdown, India wants to take its place as the world's next manufacturing hub.

German Chancellor Angel Merkel writes on a visitor's ledger at Raj Ghat -- the memorial to the father of the Indian nation Mahatma Gandhi -- in New Delhi on October 5, 2015. German Chancellor Angela Merkel landed in New Delhi for a visit in which she is expected to push for closer trade ties, and during which India's leader hopes to draw investment from the European powerhouse (Photo: ROBERTO SCHMIDT/AFP/Getty Images)

India and Germany have signed 18 agreements

Cheaper energy - as soon as possible

Tobias Engel Meier, a management consultant, advises foreign companies to invest in the Indian solar market. In his view, India is very dynamic and unpredictable, but above all, "the country needs cheap energy as soon as possible," he said.

The number of consumers in the South Asian country has been on the rise for years. The economic expansion that goes along with this requires electricity and a functioning power supply system. In this context, deals involving subsidized loans of up to a billion euros ($1.12 billion) are set to be negotiated to fund environmentally-friendly energy projects such as the construction of solar farms and roofs.

At the end of the Bosch tour, Modi gave Merkel a parting gift: a small lion - an emblem of Modi's "Make in India" campaign.