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Germany's Scholz in India: What's at stake?

Murali Krishnan New Delhi
February 25, 2023

Olaf Scholz is heading to India for the first time as German chancellor, with a meeting with Indian leader Narendra Modi on the schedule. Experts tell DW what they think will be the top talking points between the pair.

Scholz sits with a purple wall behind him. His hands are slightly animated. He is wearing a black suit and navy tie.
German Chancellor Olaf Scholz is heading to India for the first timeImage: Svea Pietschmann/ZDF/dpa/picture alliance

German Chancellor Olaf Scholz's visit to India is aimed at strengthening security and defense cooperation amid a host of geopolitical tensions.

The visit on February 25 and 26 will include a crucial meeting between Scholz and Prime Minister Narendra Modi. The pair met several times in 2022, but this trip marks the German chancellor's first time in the country since taking office.

The trip also commences a day after the one-year anniversary of Russia's invasion of Ukraine. The resulting war and its global impact will be a top discussion point, and the meeting is expected to emphasize the need for a robust India-Germany and India-European Union partnership to tackle the formidable challenges the world is facing.

Additionally, the leaders are set to discuss green technology, economic cooperation and Indo-Pacific strategy.

Business at the forefront

This is the first standalone visit of a German chancellor to India since the biennial Inter-Governmental Consultation (IGC) mechanism commenced in 2011.

Scholz will be accompanied by a business delegation that includes CEOs of 12 major companies counting Siemens and SAP, as well as heads of Germany's small and medium-sized business associations.

During the visit, Modi and Scholz will address a business roundtable comprising top industry leaders from both sides.

"Chancellor Scholz's visit will enable both sides to take stock and progress on the key outcomes of the 6th IGC, strengthen security and defense cooperation, work towards closer economic ties, enhance the opportunity for mobility of talent and give strategic guidance to ongoing collaboration in science and technology," a statement from India's Ministry of External Affairs said.

According to foreign policy experts and diplomats, Germany is India's largest trade partner in the EU and has dependably been among India's top 10 global trade partners. The total bilateral trade between the two countries stood at $24.8 billion (€23.4 billion) during 2021–22.

Germany is the ninth largest investor in India, with cumulative foreign direct investment inflows of $13.8 billion from April 2000 to September 2022.

Key areas of German investment in India have been transportation, electrical equipment, and metallurgical industries, the services sector (insurance), chemicals, construction activity, trading and automobiles.

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A bilateral focus

Trade is clearly a focus of the trip, but that there's another layer to this did not escape the German ambassador to India, Philipp Ackermann. He explained at a press briefing ahead of the trip: "India buying oil from Russia is none of our business. Basically, that's something that the Indian government decides ... what we would like to see, of course, is an Indian engagement at some stage."

Anil Wadhwa, a former diplomat and strategic analyst, agreed that the trip had mixed goals. "The agenda of the Scholz visit will have a bilateral agenda for cooperation on climate change, utilization of German technologies and the advancement of German interests in India's economy," Wadhwa told DW.

Russia and Ukraine 'very high' on agenda

"The chancellor will talk geopolitics with Prime Minister Narendra Modi. We will see Russia and Ukraine very high on the agenda," Ackermann stressed at the press briefing.

Experts highlighted the ways in which Germany and India may be looking for assurances on the topic.

"German interests and economy are badly affected because of the ongoing war," said Wadhwa. "This is placing a heavy strain on the state's exchequer, along with rising costs of fuel and electricity and a cutting down of expenses like holidays and the German way of life."

This sentiment was echoed by Meera Shankar, a former Indian envoy to the United States. Shankar maintained that Scholz's visit comes at a difficult time for the world, with the war in Ukraine looking set to intensify.

"India is likely to urge the need for winding down the conflict in Ukraine through diplomacy and dialogue," Shankar told DW. "This has hit the economies of developing nations particularly hard and carries with it the danger of a larger conflict."

India's official position on the Russian invasion of Ukraine is hard to pin down, after a decadeslong strategic relationship with Moscow. 

While New Delhi has articulated its position against the Ukraine war more robustly to counter criticism that it is soft on Russia, it has still not openly held Moscow accountable for the invasion. India has also not changed its policy on importing Russian oil and coal.

German Foreign and Security Policy Adviser Jens Plötner summed up the challenge that the ongoing conflict may likely have on Scholz's trip. "Obviously as wonderful as our bilateral relations are, they are not evolving in a kind of clean environment," he said during a press briefing. "We are embedded in a very messy international situation full of challenges. The Russian war against Ukraine. This is a European war. But it is a war with global repercussions."

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The China challenge

Sreeram Chaulia, dean of the Jindal School of International Affairs, believes Scholz's visit will explore the rise of China and its expanding economic, political, and military engagements.

There are similar concerns in India that the war in Ukraine is pushing Russia closer to China, which has troubled relations with New Delhi.

"There is a rethink in the EU, with the US pushing hard for the industry to diversify trade beyond China," Chaulia told DW. "Because of human rights issues and the handling of the [coronavirus] pandemic, Germany is thinking of reducing the economy's dependence on Beijing for many of its critical goods."

Chaulia added an area that Germany could possibly commit to in discussions: "Germany could provide more infrastructure and technical expertise to ramp up cooperation in the Indo-Pacific policy," he said.

Improved Indian-German relations ahead?

Whatever the outcome, the trip can be viewed as an important strategic development for Berlin, Gurjit Singh, former Indian ambassador to Germany, told DW.

"The rapid exchange of meetings between Scholz and Modi shows a new confidence and perception. This gives the India-German relationship deeper importance and more visits and exchanges are improving the impact of the partnership."

Recently, the relationship between India and Germany has been warming. In December 2022, German Foreign Minister Annalena Baerbock also traveled to India, where she signed a mobility partnership pact to make it easier for people to study and work in each other's country.

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Edited by Kate Martyr

Murali Krishnan
Murali Krishnan Journalist based in New Delhi, focusing on Indian politics, society and business@mkrish11