- The UK-US focus was the bedrock of Germany post world War II foreign affairs. However, the times are changing.
- Both India and China have a chance of rebuilding their relationship with the largest economy in Europe.
PM Modi's visit to Germany has put this crucial relationship in a higher orbit. The context of the visit is important since Germany is looking for deeper affiliations beyond its established diplomatic outlook of bonding with the UK and the US.
The UK-US focus was the bedrock of Germany post world War II foreign affairs. However, the times are changing. As Germany's Chancellor Angela Markel pointed out just a day before PM Modi's visit - the old certainties are giving way.
She had said, "We Europeans must really take our destiny into our own hands." This is a very significant shift in context. It comes in the wake of US President Trump's assertion that Germans are "bad" and that he will fix the massive trade imbalance that the US has with Germany.
Add to this the exit of the UK from the EU and it is clear that Germany is looking for reassurance beyond the western alliance. Both India and China have a chance of rebuilding their relationship with the largest economy in Europe - and the fourth largest in the world.
However, China is also wooing Germany aggressively as underlined by the fact that the Chinese Primer Li Keqiang was also on an official visit at the same time as the Indian PM.
PM Modi's Germany visit witnessed three major outcomes.
The first was progress by the Intergovernmental framework on increasing German investment in India. Germany has invested about $14 billion in India over the last decade, $2billion came just last year.
The visit saw a German commitment to look at a way to double the quantum of German investment in areas such as chemicals, auto parts, precision engineering and Infrastructure building. The German commitment to invest more in India is significant as New Delhi receives less than 8 percent of total German outward FDI. FDI matters as it creates work and jobs on the ground in India.
The second important breakthrough has been on jointly addressing the threat of global terror. This will include a framework of fighting the financing of terror and diplomatic pressure on those countries that harbour safe havens for terrorists. The joint statement spoke of “strong measures against those who encourage support and finance terrorism.” This will likely put some diplomatic pressure on Pakistan as well.
Amongst the 12 MOU's signed by India and Germany, the most important by far is on German contribution to skill development in India. Germany has the world's best apprenticeship program their ability to turn degrees into employable skills is legendary.
Even if a limited number of people can be trained in this way by Germany in India, it would probably be the biggest positive outcome of the visit. It is to be remembered that Germany helped set up IIT Chennai back in the 1950’s.
A Teutonic push to India's massive program to develop skill based literacy and employment could have a transformative effect. For this to happen it is imperative that this MOU does not get lost in the respective bureaucracies. It could well be the vital building block of value for India.
The problem areas:
An unresolved problem from the past remained as Modi left Germany. Germany plainly put, restricts foreign trade to a very large degree. Every year while Germany exports to the whole world - and to India - it does not allow Indian firms in many spheres through restrictive trade practices.
The result is a gaping trade deficit where Germany exports $4.2 billion every year more to India than it imports from New Delhi. This is simply unsustainable. PM Modi, say sources, pointed it out to his host.
For a better India-Germany future it is important that the point was not lost in translation. Since Indo–Germanic languages Hindi and German have the same root there is some cause for hope.
Last Updated 31, Mar 2018, 6:43 PM