Thursday 1 June 2017

Amidst trans-Atlantic Rifts India strengthens ties with Germany: Modi Europe Tour


Prime Minister Narendra Modi’s tour to Europe comes amidst of tectonic shifts in global order. Rapid geopolitical convulsions are forcing nations to rise their level of engagement to restore balance of power. India, a responsible middle order power, responding to new transformational alliance reconfigurations is taking one step at a time to position itself in the changing global scenario. Brandishing “America First” agenda, embracing protectionism, President Trump by pulling off from TPP (Trans-Pacific Partnership) created a vacuum. While his friendly overtures to Sunni-Alliance perplexed strategic experts, deranged remarks at the recently concluded NATO meeting deepened trans-Atlantic rifts.

Further, Trump’s drifting perceptions towards Russia as opposed to Germany’s uncompromising stance have sharpened the differences. Trump’s outlandish expositions on US-Germany trade surpluses at the recent G-7 summit further frayed the relationship. German Chancellor Angela Merkel, in a press conference responding to queries of NATO and G-7 summit remarked that “the times in which we would depend on others are on the way out” hinting at wider rift between European countries and the US. Clearly, European countries are miffed by Trump’s dogged reminder that NATO countries must pay up their fair share of defense spending. Trump’s rather uncharitable remarks and unpredictability has accelerated America’s transition from an “indispensable nation” to a great power. At the same time, China’s hegemonic rise, contemptuous disregard for international laws and the shrouded BRI touted as a phenomenal global infrastructure initiative is raising serious doubts about its real intentions. A declining American leadership muddied in uncertainty and obscure investment treaties of China created strains in the existing global order.

India afflicted by American inconsistencies in visa regimes and severely encumbered by the BRI is keen on fostering relations with middle order countries. Furthering this new approach, India in collaboration with Japan has kick started “Freedom Corridor” initiative for connecting Indo-Pacific region with Africa.

European nations frayed by Britain’s divorce from EU and battling the tides of Euroscepticism are showing signs of stabilization. Besides both Europe and India are severely threatened by the venomous cult of radicalization and extremism. Needless to say, Modi sought active cooperation of Europe in Counter-terrorism. President Trump’s indecision and plausible withdrawal from Paris Climate Accord has prompted Germany to pivot to Asia.  While it might be too early to draw conclusions on Germany’s drift to Asia since Europe accords high weightage to trans-Atlantic relations. Merkel’s outburst and preference to free trade deals will eventually augur well for India, keen on joining hands with technologically advanced country like Germany. Hence, Prime Minister’s Europe tour assumes greater significance.

Fresh from the celebrations commemorating three years of completion of office, Modi embarked on a six-day four nation Europe visit which include- Germany, Spain, Russia and France in order. Flagging off the tour, Modi first landed in Berlin where he was extended an official welcome with military honors at the Chancellery. Later Modi held bilateral talks with German Chancellor Angela Merkel at country retreat Schloss Meseberg under the frame work of India-Germany bi-annual Intergovernmental Consultations (IGC). The last IGC was held in October 2015.

India was one of the first few countries to acknowledge the Federal Republic of Germany after the World War II in 1945. Both countries established economic relations in 1951. Bilateral relations picked up momentum after the economic reforms in 1991. In 2000, both countries elevated relations to strategic cooperation and enacted the “Indo-German Agenda for the 21st Century”. Ever since both sides intensified bilateral cooperation and pace of engagement was significantly enhanced through high level diplomatic visits. Defence cooperation agreement was signed in 2006.  In 2007 both sides signed “Joint Statement on the Further Development of Strategic and Global Partnership between Germany and India” and the strategic partnership was strengthened by the IGCs which basically identified new areas of cooperation. Other than China and Israel, India is the only country outside EU with which Germany has close partnership. Besides India and Germany are now closely working together on the UNSC expansion through the G-4 framework and on other global issues like sustainable development, climate change along the sidelines of G-20. Also, Indian States and German provinces also enjoy tantalizing sister-cities relationships.

Germany is India’s largest trade partner in EU with bilateral trade volume of $17.42 billion. Being a strong economic partner, Germany took keen interest in India’s flagship initiatives likes Make In India, Digital India and Skill India. In April 2015, India delegation under the leadership of Modi attended as a partner country to the Hannover Messe trade exhibition promoting the Make in India initiative.  In return, Germany Embassy launched the Make in India Mittelstand (MIIM) in September 2015, to facilitate the entry and investment Small and Medium Enterprises (SME)s of Mittelstand in India. Of the 73 companies that were facilitated through MIIM, 43 companies have made good progress. As of now Germany with $9.7 billion is the seventh largest foreign direct investor in India while Indian investments in Germany account for $7 billion. Over 200 Indian companies are operating in Germany. Both countries signed Intergovernmental Science and Technology Cooperation Agreements in 1974. Currently there are over 150 joint S&T research projects. Till now ISRO has launched 10 German satellites. Another important area of cooperation is developmental cooperation, wherein Germany has offered both technical and financial assistance to India. At the 3rd IGC, both countries signed the Indo-German Solar Energy Partnership with Germany extending a concessional loan of $1 billion over next 5 years. Phenomenal contribution of the scholarly works of Max Mueller who translated Rig Veda and Upanishads laid a strong foundation towards deepening Indo-German cultural ties.

India and Germany which are on same page with regards to restoring peace and stability in Afghanistan, expansion of UNSC both permanent and non-permanent memberships, freedom of navigation and right to passage, have condemned terrorism in all manifestations called for finalization and adoption of Comprehensive Convention on International Terrorism (CCIT). At the fourth IGC, both countries signed 12 pacts on disaster management, cyber security, skill development, sustainable urban development, vocational education and training, health, alternative medicine, cooperation in solar technologies etc.

India and Germany agreed to deepen trade relations by resuming negotiations on the India-EU Broad Based trade and Investment Agreement (BITA) for mutual protection of new investments. Indo-German BITA has elapsed in March. It is one of 23 BIT agreements India has with EU countries. A swift conclusion of India-EU FTA can give needed impetus for investments. Both countries are keen on enhancing cooperation in defence manufacturing and maritime cooperation for development of blue economy. Modi has personally pledged India’s unstinted commitment towards climate change and reiterated that jeopardizing nature is against Indian heritage. India promised to support Merkel on climate goals at the upcoming G-20 summit at Hamburg. Underlining the prominence of Indo-German bilateral ties, Modi described Germany as a reliable partner in India’s development. He added, “the pace of development of our relations is fast, the direction is positive and destination is clear. Germany will always find India as a powerful, prepared and capable partner.” Modi later addressed the Indo-German Business Summit highlighting the huge untapped potential of the bilateral economic partnership. Prime Minister called upon German President Frank-Walter Steinmeier at Bellevue Palace Berlin.

It must be recalled that Germany has a very deep economic relationship with China with volumes of trade 10 times higher than India. By consequence, Germany favors China over India but the relationship developed few glitches owing to China’s expansionist tendencies and predatory economic practices. Though China overtly advocates free trade regime, a cautionary and rather reserved approach towards foreign investments and access is making European nations suspicious. Hence the tide seems to be shifting to India which is reaching out to nations with free trade practices. But India certainly needs to work hard to walk the talk to eventually realize true potential of the Indo-German relations. Close on heels, China’s Premier Li Keqiang will be in Germany on Wednesday to re-engage with European countries. Beijing has already made significant forays into Europe with its Railway connections and is well placed to nudge European nations into Free Trade Agreement, an issue which India reluctantly prolonged.  But unlike China, India religiously abides by the democratic values and judiciously adheres to International laws and negotiates trade deals with transparency. India certainly have an advantage in the International realms for its democratic credentials. New Delhi must channelize this pragmatic outlook to its advantage in engaging with Germany, the most powerful nation of EU.
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