The back-to-back visits by European heads of state to India indicate the country's growing significance on the global stage
Image Source: Getty
It’s uncommon for two European heads of state to visit India within 24 hours of the other’s departure. However, as soon as the German Chancellor Olaf Scholz wrapped up his three-day visit to India from 24-26 October, Spanish Prime Minister Pedro Sanchez arrived in India on 28 October, commencing his bilateral visit.
While this was Chancellor Scholz’s third trip to India in two years, it was the first visit by a Spanish head of state in 18 years, seven years after Prime Minister Narendra Modi visited Spain in 2017. Both leaders were accompanied by high-level ministerial and business delegations.
The seventh Indo-German Inter-Governmental Consultations chaired by Scholz and Modi resulted in 27 agreements on trade, migration, defence, critical technologies and innovation, and targeted new initiatives like the Green Hydrogen Roadmap. On the other hand, Sanchez’s visit yielded eight outcomes that include setting up a fast-track mechanism for investments, closer cooperation in rail transport, and cultural exchange programmes.
The seventh Indo-German Inter-Governmental Consultations chaired by Scholz and Modi resulted in 27 agreements on trade, migration, defence, critical technologies and innovation, and targeted new initiatives like the Green Hydrogen Roadmap.
Traditionally, India’s largest defence deals in Europe were conducted with France. Nonetheless, strengthening defence ties with India was at the top of both Scholz’s and Sanchez’s agendas. Both Germany and Spain are seeking to capitalise on India’s lucrative market for defence partnerships and exports due to an ease in regulations for foreign entrants and the entry of local private sector companies in the defence space.
Germany’s Thyssenkrupp and Spain’s Navantia are in competition to co-produce six conventional submarines with Indian firms. Sanchez’s stopover in Vadodara, Gujarat, saw the inauguration of the Airbus and Tata Aircraft Complex. This facility is set to produce 56 C-295 aircraft for the Indian Air Force in a deal worth US$2.5 billion, out of which 16 aircraft will be assembled in Seville and 40 in Vadodara. This partnership between Airbus Spain and Tata Advanced Systems, expected to create thousands of local jobs in India, is touted as “the largest contract awarded by India in the defence sector.” On the other hand, Germany’s policy to relax licence requirements for arms exports to India, coupled with ambitions to finalise a Reciprocal Exchange of Logistics Agreement between the two armed forces, is a game changer. European countries are catapulting themselves as reliable security partners for India while simultaneously boosting the “Make in India” programme and initiatives to indigenise defence production, weaning New Delhi off Russian arms dependencies.
The two leaders had markedly different itineraries, albeit similar agendas. Scholz stopped at New Delhi and Goa, while Sanchez visited Vadodara and Mumbai. In Mumbai, Sanchez met with industry leaders and film studios to explore the Spanish film industry’s cooperation with Bollywood. Meanwhile, Scholz’s Goa pitstop supported Indo-German naval activities, with German frigate Baden-Württemberg’s port call and Frankfurt am Main’s joint exercises with the Indian Navy.
European countries are catapulting themselves as reliable security partners for India while simultaneously boosting the “Make in India” programme and initiatives to indigenise defence production, weaning New Delhi off Russian arms dependencies.
Despite being Europe’s economic powerhouse, the German economy has staggered in recent years, with growth shrinking by 0.3 percent in 2023. Meanwhile, the Spanish economy—the EU’s fourth largest—has remained relatively stable, with a growth rate higher than the average eurozone and low inflation rates due to less dependencies on Russian gas. India’s bilateral trade with Germany surpassed US$30 billion in 2023, while figures for Spain during the same period totalled US$10 billion. Recognising the scope for future growth, both Scholz and Sanchez also reaffirmed their commitment to the advancement of the EU-India Free Trade Agreement negotiations.
Global tensions, especially the wars in Ukraine and Gaza, held a place in India’s discussions with both leaders. Nevertheless, the ability to work together and insulate their engagements from differences on these issues has proven the solidity of India’s ties with European partners. Against the backdrop of differing positions on the Russia-Ukraine war, India and Germany signed the comprehensive Green and Sustainable Development Partnership in May 2022. Given Spain’s unique successes in the area of renewable energy, a partnership along similar lines would be useful. Germany’s decision to increase visas for skilled Indians from 20,000 to 90,000 in a bid to attract migrant talent to fill gaps in its workforce espouses demographic and economic synergy.
On China, which has emerged as India’s top security challenge, both Scholz and Sanchez have assumed relatively moderate positions as opposed to EU’s more assertive approach. Germany is often perceived as the weakest link in the EU’s approach, preferring to rebalance trade ties with Beijing over security and other considerations. Meanwhile, Sanchez was the first European leader to meet Chinese President Xi Jinping in March 2023 after the latter visited Moscow that same month. He visited China again in September this year, seeking to ease EU-China trade tensions. Just a few weeks ago, Germany voted against the EU’s tariffs on Chinese electric vehicles, while Spain abstained. Yet, asymmetrical economic ties (Germany had a 23.18 billion euros worth of trade deficit with China in 2022, while Spain had a trade deficit of almost 34 billion euros the same year), China’s unfair trade practices and growing wariness of the risks associated with over-exposure to China, has resulted in greater scrutiny and conditionality in doing business with China. This is being accompanied by attempts to diversify trade with other large markets such as India.
Against the backdrop of differing positions on the Russia-Ukraine war, India and Germany signed the comprehensive Green and Sustainable Development Partnership in May 2022.
Both Germany and Spain’s interest in maintaining a free and secure Indo-Pacific and efforts in strengthening their presence in the region, amid concerns of Chinese assertiveness, has led to a strategic convergence with India. Before Scholz arrived in India, the German government released its “Focus on India” policy paper that laid out an ambitious future-oriented agenda for engagement with India. Sanchez, too, announced the Spanish government’s goal of launching a new Asia strategy with India at its core.
Domestic shifts within Germany and Spain have also contributed to an increased engagement with India. In the case of Germany, its abandonment of the previous mercantilist policy of Wandel durch Handel in favour of diversifying its dependencies on more like-minded nations and a broader Zeitenwende has enabled it to shed its post-war reticence in matters of security. In Spain’s case, domestic issues, including Catalan separatism, economic strife, and political turbulence, meant it lacked the bandwidth to pay attention elsewhere. Despite that, more proactive policies, underpinned by a stable economy, have characterised Madrid’s approach to the world recently beyond its traditional spheres of engagement in Europe, Latin America, and North Africa.
In recent times, India has ramped up its engagement with European countries and sub-regions. At the same time, India’s rapidly growing economy, defence ambitions, skilled workforce, and functioning democracy mean that India will remain attractive to a wide range of countries in Europe.
Shairee Malhotra is the Deputy Director of the Strategic Studies Programme at the Observer Research Foundation
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Shairee Malhotra is Deputy Director - Strategic Studies Programme at the Observer Research Foundation. Her areas of work include Indian foreign policy with a focus on ...
Read More +
PREV
