Broadening the Germany-India Cooperation: Achievements, Challenges and Prospects

Germany-India relations underwent a substantive upgrade in recent years, moving beyond their traditional economic focus towards a broader strategic partnership encompassing defence cooperation, critical technologies, supply-chain resilience, skilled mobility and Indo-Pacific security. Germany is India’s largest trading partner within the EU. More than 2,000 German companies operate in India, while Indian firms are steadily expanding their investments in Germany, particularly in the sectors of IT, automotive, pharma, biotech and manufacturing. China’s growing assertiveness and its perception as a systemic rival by the European Union have shaped German policy. Berlin views India, whose territorial disputes with China and rejection of the Belt and Road Initiative (BRI) reflect concerns over expanding Chinese geostrategic influence, as an important regional counterweight to Beijing’s hegemonic ambitions.Strengthening multi-dimensional ties with India has therefore become a key element of Germany’s Indo-Pacific strategy, marking a noteworthy shift in its security policy.

Continuity in Germany’s India Policy: From Scholz to Merz

Bilateral relations intensified significantly under Chancellor Olaf Scholz (2021-2025), whose administration oversaw frequent high-level meetings involving senior political leaders and business representatives. The sixth India-Germany Intergovernmental Consultations, held in Berlin on 2 May 2022, identified India as a key partner for Germany. Germany’s experience of dependence on Russian energy reinforced Berlin’s determination to diversify strategic supply chains. During her 2022 visit to India, the then Foreign Minister Annalena Baerbock warned of the risks of relying on “one country that does not share your values”. Although directed primarily at Russia, the message also reflected Berlin’s broader effort to reduce excessive dependencies on China. Consequently, India has become an important partner in projects focusing on resilient supply chains and critical technologies.

In 2024, the German Government adopted the strategy paper “Focus on India”, described India as “rapidly becoming a central and active shaper of international politics and of our globalised, collaborative economic order”. Security, democratic values, climate action, the green economy, and supply-chain diversification have become the key politico-economic pillars of Germany’s engagement with India. This momentum has been sustained under Chancellor Friedrich Merz, reflecting a broad bipartisan commitment within Germany to strengthening ties with India. At both the federal and Länder levels, German authorities have launched a wide range of political, economic and societal initiatives aimed at deepening the partnership.

Berlin has consistently emphasised its understanding of the distinct needs and challenges facing Asian partners. German policymakers stress that India’s priorities differ from those of the West and advocate focusing on areas of shared interest. Germany also supports a greater Indian role in international institutions and cooperates with India on UN reform, counterterrorism, climate policy and the rules-based international order.

Chancellor Merz paid his first official visit to India on 12-13 January 2026, accompanied by a high-level delegation of ministers and 23 leading German business executives. He identified three priorities for bilateral cooperation: security and defence cooperation, economic ties, and collaboration in education and skilled labour. He also engaged in the India-Germany CEOs Forum and visited Bosch’s research and innovation campus in Bengaluru. The visit underscored Germany’s recognition of India as a key strategic partner in the Indo-Pacific and coincided with the 75th anniversary of diplomatic relations and the 25th anniversary of the India-Germany Strategic Partnership. This meeting strengthened the strategic partnership through agreements on defence-industrial cooperation, semiconductors, critical minerals, green energy, digital technologies and skilled mobility, while reinforcing cooperation on the Indo-Pacific and support for the India-EU Free Trade Agreement (the EU-India FTA negotiations were formally concluded on 27 January 2026, during the 16th EU-India Summit in New Delhi, as of August 2026, the FTA is not yet in force). The Merz visit, new agreements on defence industry, semiconductors and critical raw materials, can be regarded as significant achievements in Germany-India relations in 2026.The eighth India-Germany Intergovernmental Consultations (IGC) are officially scheduled to take place in Germany towards the end of 2026 to institutionally advance the above mentioned initiatives and projects.

Germany has sought a major role in India’s defence modernisation through the Indian Navy’s Project 75(I), which envisages six advanced AIP-capable diesel-electric submarines built in India with foreign technology transfer. During his June 2023 visit, Defence Minister Boris Pistorius promoted the Thyssenkrupp Marine Systems (TKMS) bid as a potential “flagship project” in bilateral relations. TKMS subsequently partnered with India’s Mazagon Dock Shipbuilders Limited (MDL). By September 2025, the partners had completed the concept-design phase and entered contract negotiations. In mid-2026, negotiations over the approximately €8 billion project were reportedly nearing completion, with technology transfer remaining a key issue before final approval.

Germany-India Cooperation: Challenges and Future Prospects

While bilateral cooperation and recognition of strategic significance have expanded significantly, both partners have certain areas where they disagree. Germany’s shift towards India is driven by its Indo-Pacific strategy and the objective of strengthening like-minded partners, yet the two countries continue to differ in their strategic outlook. There are persistent divergences over Russia’s war against Ukraine, perception of strategic autonomy, and uncertainties surrounding the implementation of recently agreed initiatives. Germany views Russia’s aggressive policies as a fundamental challenge to the European security order and remains one of Ukraine’s principal European supporters, while India continues to preserve close relations with Moscow as part of its strategic autonomy. Perception of Russia reflects not only diverse threat perceptions, which depend on regional differences between Europe and South Asia, but also divergent understandings of how the international order should be shaped under conditions of geopolitical competition and intensifying transactional relations in a “world of great powers”. Many bilateral Germany-India initiatives remain frameworks, declarations or projects still under development. Their long-term significance in areas such as defence co-production, semiconductors, critical minerals, green hydrogen, advanced technologies and skilled mobility will therefore depend on whether political commitments generate sustained investment, institutional coordination and enhanced technology cooperation to bring viable results.

Disclaimer: Views expressed are of the author(s) and do not necessarily reflect the views of The Statecraft Institute.