Indo-German strategic convergences in times of paradigm shifts

Germany is one of India’s most important partners in Europe, with diplomatic relations between the two stretching over seven decades. India and Germany have enjoyed a strategic partnership since 2000, which has been further strengthened with the launch of the intergovernmental consultations (IGC) in 2011 at the level of Heads of Government. India being one of the select few countries that are part of such a dialogue mechanism with Germany showcases the growing importance of New Delhi in Berlin. The IGC routinely allows for a comprehensive review of cooperation and identification of new areas of engagement.

As the 4^th and 5^th largest economies in the world, Germany and India also share a robust economic and developmental partnership. Germany is India’s largest trading partner in Europe and continues to be a major source of foreign direct investment (FDI) in the sectors of transportation, electrical equipment, metallurgical industries, the services sector (particularly insurance), chemicals, and construction activities. Further, India receives more official development assistance (ODA) from Germany than any other country.[i] Germany contributes significantly to developmental cooperation with priority in areas of energy, sustainable economic and urban development, environmental issues, and on the management of natural resources. The two countries are also important advocates of multilateralism on the world stage, routinely making a case for reforms and strengthening of the existing multilateral order through their engagements in various forums. Their relationship, and Germany’s key role in the European Union (EU), further contributes to India-EU ties.

Both India and Germany are faced with mounting security risks in their neighbourhoods, but also with geopolitical shifts that are challenging the extant global order. There is a need to better coordinate regional and global security challenges through bilateral and multilateral channels, and develop trust and mutual understanding between the two countries. The idea of countering deglobalisation while maintaining strategic autonomy in an era of geopolitical competition also prompts focus on the possibilities and risks of cooperating on new and emerging critical technologies within the Indo-German relationship. The underlying global mood on these issues, the decay of multilateralism, is also evident in multilateral health institutions. With their innovation and manufacturing capabilities, cooperation between India and Germany in this regard can greatly strengthen global health governance structures. Most importantly, the relationship between the two also holds great promise to help bridge the North-South divide when it comes to the generational challenge of climate change.

Paradigm shifts in the global order have presented the two nations with a set of challenges and opportunities. As middle powers vying for a multipolar world, India and Germany increasingly find a convergence in their strategic interests amidst, or perhaps even because of, these global shifts. This analysis discusses the state of the Indo-German strategic partnership within four such key policy areas: Climate cooperation, new and emerging technologies, global health, and security.

Bridging the North-South divide in climate cooperation

India and Germany have become proactive agents in international climate diplomacy. Recently, they have increasingly attempted to align their respective policy agendas. Most recently, during his visit to Berlin in May 2022, Prime Minister Narendra Modi signed an agreement for India to join the InsuResilience Global Partnership for Climate and Disaster Risk Finance Solutions, making India its 18^th member.[ii] A Partnership for Green and Sustainable Development initiated during the same visit has become the landmark document under which various new programmes were started since then.[iii] Likewise, India’s ambitions to shape the global climate agenda have been expressed most significantly in its creation of the International Solar Alliance (ISA). The ISA is the first multilateral institution initiated by India and hence marks a historical achievement for Indian diplomacy for which Germany attained its membership in 2021.

Both countries have previously set net neutrality targets, which require significant policy efforts for them to become realistic. Germany’s 2021 climate law set out an agenda to become net zero by 2045. Prime Minister Modi announced during the Conference of Parties (COP) 26 proceedings in 2021 that India should reach the level of net zero by 2070. At the same conference, however, Germany and India stood on two opposing sides of the debate, when India pitched the idea of phasing down coal, instead of phasing it out. Both governments have further introduced several laws shaping their approach to climate governance. For India, the National Plan on Climate Change (NAPCC), the 2030 climate plan, and India’s Long-Term Low-Carbon Development Strategy are the state’s most important tools to regulate energy efficiency and transition. 

The Indian discourse on climate policy is driven by arguments that concern India’s developmental situation as well as its status ambitions. On the one hand, India frequently contextualises its climate commitments as compromise with domestic poverty eradication targets (Sinha, 2021). On the other hand, the incumbent Bharatiya Janata Party (BJP) government and its supporters are keen to present India as a leading power and a constructive force in international affairs. With various domestic campaigns supporting renewable energy supportive startups, Indian climate policy rests on the success of domestic companies to deliver innovative solutions. Serious campaigns to foster innovation and leadership on the climate transition thereby stand in stark contrast to coal making 74 per cent of India’s current energy mix.[iv]

For many years, EU-India relations have provided a strong backbone for bilateral Indo-German climate cooperation. The post-Paris Agreement 2016 Clean Energy and Climate Partnership set out principles for the EU’s and India’s collaboration (EU and India Agree on Clean Energy and Climate Partnership, 2016).[v] The 2020 EU-India Strategic Partnership Roadmap 2025 specified bilateral climate cooperation among the partnership’s most extensive and promising policy domains for future cooperation.[vi]

To reach the targets formulated in the Paris Agreement, development cooperation plays a significant role. For the Gesellschaft für Internationale Zusammenarbeit (GIZ), India is the country with the highest budget and most active projects. With current activities worth EUR 426 million, India is by far the largest partner for German development cooperation. Explicitly climate- and energy-policy related projects feature prominently in the current portfolio.

An ongoing focus thereby rests on the establishment of Green Energy Corridors – projects linking the creation of renewable energy power plants with new transmission networks – in various areas in India. The current German government also actively supports India’s participation in the reforestation of 26 million hectares as part of a Memorandum of Understanding (MoU) between the ministries of the environment in 2022.[vii] Lately, Germany and India have agreed to cooperate through triangular development cooperation, in which both countries’ strengths wish to leverage energy transition projects in third countries.

Both partners are currently investing in technologies that are critical for reaching the 1.5-degree target. In the 2022 National Hydrogen Policy, India plans to become a major developer of green hydrogen and to produce 5 million metric tonnes by 2030 (National Green Hydrogen Mission| National Portal of India, 2023). At the beginning of this year, the Indian government decided to invest around EUR 2.25 billion into green hydrogen projects, thereby laying the fundament for the one green technology that India expresses the greatest ambitions in. Last year, Germany and India agreed to initiate a green hydrogen taskforce as part of the Indo-German Energy Forum (IGEF) to create networks between governments, industries, and academic communities.[viii] Germany and India have a historic opportunity to build more just, equitable and empowering climate futures.

Germany and India want to be perceived as problem solvers in the fight against climate change. Due to their different developmental situations, innovative strengths, and domestic priorities, approaches to climate policy have differed significantly over the past decades. The size and current trajectory of national carbon footprints as well as potential role model functions of both states create a shared responsibility that Germany and India have for a carbon-neutral future. An advancing Indo-German climate partnership will hence not only help to limit their respective emissions, but further inform the multilateral debate on how the Global North and Global South countries can agree on a mutually beneficial policy consensus. Existing initiatives like the G7 Just Energy Transition Partnership (JETP) with India suggest that the bilateral partnership may also benefit from plurilateral and multilateral climate neutrality projects.[ix]

Natural partners on new and emerging technologies

Germany and India have several platforms through which they exchange views on strategic priorities concerning new and emerging technologies. Science and technology (S&T) issues have always been a vertical of Indo-German governmental consultations. The most recent consultations in November 2022 emphasised that both governments would not only like to continue their Cyber Consultations, but further reintroduce the Indo-German Defence Technology Sub-Group (DTSG). In 2010, both countries further inaugurated the “Indo-German Science and Technology Centre” (IGSTC) in Gurgaon, which facilitates programmes for governmental stakeholders, academia and the private sector of both countries. For the GIZ, last year’s initiative to build an EU-India Trade and Technology Council (TTC) is currently taking shape and will play a significant role in the Indo-German emerging tech relationship. In the most recent meetings between Prime Minister Modi and Chancellor Olaf Scholz, the two leaders underlined the importance of emerging technologies for the bilateral relationship as they decided to develop a roadmap for innovation and technology.[x]

As the global economy continues to globalise and integrate, recent years have increasingly witnessed opposing trends of decoupling and weaponised interdependence. These trends are most profound in the areas of critical and emerging technologies. Germany and India take a nuanced stance in this debate. They believe that emerging security risks pertaining to information and communications technologies (ICTs) must be addressed, yet that overall, a global and interconnected world is better for their economies and societies. In the next sections, we focus more specifically on deepening the partnership on responsible artificial intelligence (AI), semiconductors, and cybercrime. As these examples show, not increasing the levels of cooperation in some of these fields can lead into a scenario where both countries contest on critical and emerging technologies.

As a consequence of growing supply chain risks as well as fears of lacking global competitiveness, India and Germany have turned to large-scale research and development (R&D) projects. A prime example of this is both countries’ efforts to create greater autonomy on semiconductors. The EU’s Chips Act sets the target of EUR 43 billion investments into the European chip production and development until 2030.[xi] Equally, the Indian government in 2022 announced its own Modified Programme for Semiconductors and Display Fab Ecosystem with a public investment capacity of around EUR 8.5 billion. A central challenge for both partners is that current political trends of domesticating all design and manufacturing can create great market disadvantages eventually. Nationalising a highly globalised supply chain within a couple of years is unrealistic, and policymakers are currently exploring ways to leverage the EU-India partnership on semiconductors. The EU and India have set up a Trade and Technology Council (TTC) in 2022 and recently announced that trade, investment and resilient value chains will constitute one of three focus areas. As the leading industrial power in the EU, Germany can play an essential role in driving the efforts of the TTC. Most importantly, both partners can work towards greater interoperability of hardware and software standards, simplified licensing processes for semiconductor supply chain components, and greater support for business-to-business (B2B) as well as academic cooperation on research, design, and manufacturing.

Bilateral cooperation relating to data management and transfer is currently far below its potential. That India still does not have a General Data Protection Regulation (GDPR)conform data protection law puts natural boundaries on digital trade. Focusing on digital public goods could be one way in which both governments may satisfy foreign policy priorities and build important trust between the two nations. Both countries are active members in the UN-led Digital Public Goods Alliance (DPGA), which advocates for software development, which is open-code, open-source, and should reflect the guideline of no harm by design. Germany’s recently announced feminist development policy and Indian initiatives such as Beti Bachao Beti Padhao (save the girl child, educate the girl child) offer a widely unexplored opportunity for cooperation. A prospective bilateral programme “Tech by Women – Software for Society” could promote women-led small and medium software developing enterprises, foster academic exchanges, and support technology solutions advancing the digital rights and opportunities of women and other digitally marginalised groups. Investing into the intersection between digital public goods and women empowerment has the potential to address crucial societal problems such as gender-based online violence, online sex-trafficking, unequal accessibility, and digital rights. By creating a platform that supports gendered perspectives and innovations on digital harms, risks, and divides will help to make Germany and India central actors in shaping a more just cyberspace.

Partnership for global health

The COVID-19 pandemic has demonstrated the weaknesses of international norms and institutions in addressing global health crises as a community of nations. Individually, India and Germany have contributed greatly to overcoming the pandemic. Germany’s biotechnology company BioNTech SE was essential in containing the virus. India’s export of almost 65 million vaccine doses by April 2021 showed the country’s commitment to think and act like a responsible global power.[xii] High levels of inequality and a lack of capacity, however, have held back India’s global ambitions. This became evident during the second wave in India, when 4.9 million deaths were reported across the country.[xiii] As a result, the Indian government came under extensive domestic pressure to limit its benevolent international activities like vaccine exports abroad. The depth and width of cooperation still underperforms, considering the great compatibility of individual economic strengths, innovative potential, and global aspirations. The 2022 governmental consultations emphasised the need for closer ties by calling for a partnership for global health.[xiv]

The global COVID-19 pandemic has deepened the crisis of multilateralism, which the two partners can counteract together. Both Germany and India are members of the Alliance for Multilateralism. Putting this support into action in health diplomacy, both countries supported the WHO-initiated COVAX vaccine distribution mechanism. Further, there is a growing and shared belief in the comprehensiveness of global health. The 2019 WHO summit concluded with the Berlin Principles of One Health under the title One Planet, One Health, One Future.[xv] The title very much echoes the slogan, which India adopted for its 2023 G20 Presidency, i.e., One World, One Family, One Future. While the narratives align, there is space for Germany and India to innovate robust multilateral mechanisms.

A major political difference between Germany and India concerns the use of medical patents. Germany remains a key veto player against the relaxation of global COVID-19 vaccine patents at the WHO, which indicates that it prioritises the economic strength of domestic companies. Tight patent regulations are a problem for India. The country possesses large-scale manufacturing facilities for medical products like vaccines, yet these can only produce a drug if the patent holder has agreed to it. Thinking out of the box, the next intergovernmental consultations may include federal health ministers. They could develop a new forum in which German and Indian trade associations, civil society and research institutes plan and implement new partnerships. Such a bilateral health forum could be facilitated by the Robert Koch Institute (RKI) and the Public Health Foundation of India (PHFI). Licensing partnerships and MoUs between Indian and German companies could be central outcomes from this process. Exploring such new pathways in bilateral and multilateral health diplomacy helps to craft more economic capacity, resilience as well as fairer response mechanisms for future health crises.

Converging security interests

India and Germany increasingly find their security interests coalescing in the context of a global order in flux. While the two nations have enjoyed a strategic partnership since 2000, recent momentum in bilateral, plurilateral, and multilateral engagements indicate deepening security ties between the two middle powers. China’s increasingly coercive diplomacy and assertive behaviour in the Indo-Pacific region have shaped a shared consciousness over the significance of the security ties between Berlin and New Delhi. Concerns regarding supply chain risks and dependencies in key strategic sectors, as well as the mutual desire to reform and strengthen multilateralism have contributed to this push.

Chancellor Scholz has characterised Russia’s invasion of Ukraine as a Zeitenwende or turning point, as the war has brought into question Germany’s approach of Wandel durch Handel (change through trade) vis-à-vis Russia. Resulting in special funding to bolster the country’s military, the war has also prompted Germany to pave the way for a continuous defence spending level amounting to 2 per cent of the GDP.[xvi] Geopolitical contestation with Russia, Berlin’s (previously) biggest energy partner, and geoeconomic competition with China, its biggest trade partner, has pushed Germany to diversify its economic relations and prioritise partnerships with like-minded countries. Relations with India were among the top foreign policy priorities for the German government’s coalition agreement in 2021 and Berlin has followed up on that with several high-level visits since then.

Scholz’s visit to India in February 2023 displays potential on how these deeper defence ties could take shape. The meetings included discussions about co-developing military hardware and increasing tech transfer, most significantly a potential deal worth $5.2 billion for Germany and India to jointly build six conventional submarines in India.[xvii] As New Delhi attempts to diversify from its military dependence on Russia, Berlin could emerge as an important defence partner for the nation. During the 6^th IGC, both sides also agreed to begin negotiations on an agreement on the exchange of classified information.[xviii] Additionally, the first Germany-India-France military exercise is also slated to take place in 2024 to facilitate enhanced security and defence collaboration.

India is also a prominent figure in Germany’s renewed Asia outlook and its guidelines for the Indo-Pacific Region provide the outline for this engagement. While championing the ‘rules-based order’, ‘inclusivity’ and ‘multipolarity’, Germany has mentioned that diversifying and deepening its relations are its top interests. Berlin has laid stress on the stability of supply chains and trade routes linking Europe and Asia, given their importance to its exports that are vital for the economy. A departure from its previous Asia policy, which was centred on China, is evident. Economic ties that were previously seen in terms of absolute gains are now increasingly considered as overdependence and strategic vulnerability. China’s economic growth, once seen as an opportunity, is now increasingly considered as the rise of a systemic rival. The symbolic deployment of its frigate Bayern to the Indo-Pacific with a stopover in Mumbai showcases Berlin’s changing alignment with India as well as the potential for more substantial collaboration.

Another area where India and Germany see eye to eye is the reform of the United Nations Security Council (UNSC). Both nations have reiterated their desire to reform the multilateral system in light of pressing global challenges such as climate change, poverty, global food security, international conflicts, and cross-border terrorism. They, along with the other members of the G4, Brazil and Japan, have argued that the UNSC no longer adequately reflects contemporary geopolitical realities and displays an inability to effectively address these challenges.[xix] Not only are India and Germany unanimous in their calls for increased permanent and non-permanent membership of the UNSC, but also support each other’s candidature as aspiring new permanent members in a reformed Security Council.

Germany has also played an important role in the strengthening of India-EU ties. In the first ever India-EU Security and Defence Consultations held in 2022, the two sides discussed increasing maritime security cooperation, the possibility of co-development and co-production of defence equipment, the implementation of the European Code of Conduct on Arms Exports to India’s neighbourhood and India’s participation in Permanent Structured Cooperation (PESCO).[xx] The India-EU Trade and Technology Council also provides a medium for mutually beneficial cooperation in the strategic technology sectors. Great potential for defence technology cooperation between India and the EU exists in areas of quantum and space research as well as through bolstering semiconductor supply chains.[xxi] Such developments are indicative of, as put forward by Charles Michel, President of the European Council, in 2021, “a new chapter in bilateral relations between the two”.[xxii]

As China continues to be an important partner for Germany in several respects, it is clear that Germany does not want to overly antagonise China, which is also evident from the route of the Bayern, which avoided all disputed areas in the region. Yet, as current legal reforms in Germany regarding telecommunications technology suppliers and foreign investment show, the German administration is likely to take a tougher stance on China. Implementing the Zeitenwende, leveraging the defence and security cooperation with India will not only contribute to peace and order in the Indo-Pacific, but also lower the relevance of Russia in India’s strategic calculus.

Conclusion

After China’s increasingly assertiveness in its neighbourhood, the global COVID-19 pandemic, and the climate crisis had produced shocks in the international system, it was Russia’s full-scale invasion of Ukraine beginning in February 2022 that led to a rethinking of Germany’s post-Cold War foreign, economic and security paradigms. Berlin senses the beginnings of an era of great power competition and reassesses its foreign policy priorities. War on the continent and rivalry with China have prompted a boost in defence spending and, more importantly, a reassessment of its partnerships. India-Germany ties stand to benefit greatly from such reorientation. It is evident that cooperation on co-production and co-development of military equipment with India can mutually benefit both, and that growing defence ties can strengthen the international rules-based order. Yet, as Berlin resists engaging in co-production while New Delhi refuses to purchase critical technological products without such a collaboration, it appears that both countries still need to reconsider old paradigms before the partnership can unleash its full potential.

Cooperation on critical technologies can play a significant role in unlocking new Indo-German opportunities. Global supply chain risks, green tech as well as cybersecurity provide significant opportunities for New Delhi and Berlin to shape a relevant bilateral emerging tech partnership that can further enrich the multilateral debate. The existence of dialogue formats to share views on strategic interests in new and emerging technologies paves the way for Indo-German and EU-India cooperation in this domain. While several untapped opportunities and key hurdles remain in this relationship, political will to deepen exchanges indicates new priorities in favour of this partnership.

Other major global challenges, most importantly climate change, also warrant their attention. Germany and India, as key members of the Global North and Global South respectively, have often historically had different approaches to their climate policy. Their emerging partnership in fighting climate change as innovation partners in green tech, despite some differences, is an example of how a problem-solving approach to climate targets can result in bridging the gap between the two sides of the table. Their bilateral and multilateral cooperation in this regard underscores that consistent efforts can advance towards mutually beneficial policy consensus. 

A common thread in all these developments is the failure of extant multilateral channels to deal with contemporary realities. The COVID-19 pandemic served as perhaps the strongest example of the inability of multilateral institutions to bring together the world community when facing a global health crisis. India and Germany emerged as bastions of multilateralism even within such challenging times, contributing to both individual and multilateral efforts. Echoing the idea of a common future for humanity, albeit in different wordings, the India-Germany health partnership has the potential to reinvigorate global health institutions and overcome the political differences that dog their bilateral partnership.

India’s G20 presidency is a timely testbed for Germany and India to strengthen their mutual commitments to global challenges, as India’s outlined priorities offer various synergies.[xxiii] On climate action, India is pushing G20 nations to adopt a more demanding stance towards climate financing and raises expectations towards loss and damage payments. Germany can support the agenda by tapping on its own experiences with InsuResilience. Realising the tectonic shifts in global power relations and the return of geopolitics, Germany should proactively engage India’s agenda to make multilateral institutions more accountable, inclusive and representative. While the UNSC reform has been stagnating for years, Germany and India can use the G20 to consider new pathways for fair representation. Finally, India’s focus on “Women-led Development” offers many chances for the German Foreign Office (AA) and Ministry for Economic Cooperation and Development (BMZ) to shape the G20 women empowerment agenda. Perhaps more significantly for both ministries, India’s emphasis on women-led development is envisioned as a cross-cutting issue affecting its climate, digital, and investment policies. Following India’s positions in these domains carefully will provide German decision makers a better understanding of promising focal areas for feminist development cooperation.

It is a testament of the strength of the growing Indo-German partnership that one can look at such complex bilateral and multilateral policy issues as opportunities and not hurdles. India and Germany bring to the table their different developmental perspectives, expertise, leadership and regional interests, but their cooperation is marked by aligning strategic interests, a belief in multilateral institutions, and a shared concern for the international rules-based order. The very different fields of engagement across policy domains speak of the breadth that characterises concurrent Indo-German relations. However, it is exactly this diversity of engagement, which suggests that the partners should consider carefully the shared interests according to the respective policy field. Firstly, multilateral cooperation appears most promising when discussing global public goods. Secondly, Germany’s feminist development policy has, for now, greater relevance and application potential in India than the feminist foreign policy. And finally, tech transfer remains a sensitive topic and should be carefully tested in one area to build trust and later leverage the approach in other domains. Growing convergences between the two nations indicate the deepening of a multidimensional relationship not only between India and Germany, but also as a consequence of the partnership between India and the EU.

References

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National Green Hydrogen Mission| National Portal of India. (2023). National Portal of India. https://www.india.gov.in/spotlight/national-green-hydrogen-mission

Sinha, A. (2021, November 14). Countries adopt Glasgow Climate Pact after India, China force amendment on coal reference. The Indian Express. https://indianexpress.com/article/world/climate-change/glasgow-climate-…

Rafał Ulatowski, Germany in the Indo-Pacific region: strengthening the liberal order and regional security, International Affairs, Volume 98, Issue 2, March 2022, Pages 383–402, https://doi.org/10.1093/ia/iiac008