Event ReportsPublished on Nov 04, 2015
The Indo-German relationship is undergoing a transformation but areas such as lesser ease of doing business, bureaucratic hurdles and red tapism need further attention to improve economic relations, according to Mr Achim Fabig, Consul-General of the Republic of Germany, in Chennai.
Business hurdles need attention to improve economic relations: Germany

The Indo-German relationship is undergoing a transformation, but areas such as lesser ease of doing business, bureaucratic hurdles and 'red tapism' need further attention to improve economic relations, according to Achim Fabig, Consul-General of the Republic of Germany in Chennai.

Initiating a discussion on "Indo-German relations and Chancellor Angela Merkel’s Visit", at the Chennai chapter of the Observer Research Foundation on 17 October 2015, Fabig said that though the Indo-German relationship has matured towards mutual cooperation in international issues and geopolitics, a critical analysis of this strengthening engagement is missing in the mainstream media.

He emphasized the need for a fast-tracking mechanism to speed up regulatory and environmental clearances, thereby improving the turnaround time to set up new business.

German business houses such as Bosch, Daimler and Volkswagen have well established manufacturing hubs in India and produce for domestic and international markets. In this context, Fabig said that Indian Prime Minister Narendra Modi’s 'Make in India' policy would bolster opportunities for new German businesses poised to enter India and strengthen the existing manufacturing hubs. He also highlighted the growing demand for IT expertise in Germany and pointed out the opportunities that exist for the Indian IT sector in Germany.

He said "The quality of Germany’s engagement with India has certainly changed in the recent past. The interactions have evolved from developmental cooperation, business ties, and economic cohesion to discussions on global issues such as climate change, migration, UNSC reform and the West Asian crisis." Commenting on Merkel’s visit, Fabig said that this was the third close interaction between the heads of government of the two countries within a year. He opined that this was a sign of the growing relationship between the countries. Earlier Modi had met Merkel on the sidelines of the G-4 summit. Merkel, who visited India in October, travelled to Bangalore and interacted with several industrialists and other representatives of German companies.

Special focus

Speaking on specific issues, Fabig said that a number of MoUs have been signed in several sectors such as disaster management, cyber security, and green energy during the Merkel’s visit. There has been a special focus on discussions relating to climate change and environmental issues, ahead of the Paris CoP21 (to be held in December 2015).

Worldwide, Germany is the largest proponent of green energy, and nearly 27 percent of its energy demand is met by renewable energy sources. Over the past few years, Germany has been advocating the use of solar energy. In addition to electrifying homes, surplus solar power is fed into the main grid thereby distributing domestically-generated energy across the country.

Germany’s focus on green energy has translated into investment agreements in the Green Energy Corridor and solar power projects in India, making the country India’s largest development partner in renewable energy. Germany is also working on the 'Clean Ganga’ project and has invested around $120 million, Fabig recalled.

Commenting on the trade ties between the two countries, Fabig noted that a major portion of the proposed €1.4-billion investment will flow into India through KfW. Answering queries on food export challenges faced by India, he said that the food export issue and other trade-related concerns would be taken up by the proposed Indo-German Trade Working Group. Germany’s long-standing experience in utilities operation, power-grid management, and renewable energy technology makes it a natural partner in India’s green energy initiatives.


Speaking on the language issue (the Indian Union HRD Ministry’s decision to remove the German language from central board schools), Fabig said that the issue had now been resolved. He said the earlier MoU had expired, and a new agreement had been inked between the leaders to promote the study of the German language in India.

In Germany, the emphasis is on the study of modern Indian languages such as Hindi and Tamil. The University of Hamburg has established a school of Tamil Studies and the Heidelberg University has instituted a school for the study of South Asian languages, which features many modern Indian languages.

Fabig opined that migration, like poverty, is a global challenge facing humanity. He said migrants could be economic refugees, who intend to migrate away from poverty and destitution, or conflict-refugees, who migrate away from conflict-ridden areas in search of security of life. Germany has always advocated the dissolution of boundaries and removal of cultural fences to foster a plural society. Germany has been accepting migrants in large numbers recently and has led by example in the face of increasing xenophobia among other European nations.

Chancellor Merkel is quite forceful and persistent on the recent migration crisis in Europe, noted Fabig. While Germany will be able to accommodate the influx of migrants for now, it may take a few years to transform these individuals into taxpayers and regular members of society. He further noted that Germany would work together with other countries to find a peaceful global solution to the strife in Syria and Middle East, to reduce the influx of conflict refugees into Europe.

Speaking on cultural ties and people-to-people contacts, Fabig acknowledged language to be a barrier for closer people-to-people contacts. The Indian diaspora in Germany numbered around 80,000 with considerable mobility to the tune of around 8000, putting the figures for residents at around 72,000. Germany offers attractive opportunities for education and employment, especially in education since it is state-funded.

Germany has instituted a 'Blue Card' programme for skilled workers and nearly half of the workers under this programme (around 20,000) are from India. The German language plays a major role in experiencing the cultural and social aspects of the country, so learning the language will definitely open new opportunities for advanced research and employment, opined Fabig.

Concluding the discussion, Fabig said that Germany is not in a position to steer infrastructure development in India as in Japan or Russia. However, Germany will continue to engage closely with India and work on supplemental projects that aid infrastructure development, with funds flowing through KfW.

Report prepared by Deepak Vijayaraghavan, ORF Chennai. 

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.