Hasten steps to up German investment

German Chancellor Angela Merkel’s visit to India saw the two countries sign 18 agreements. Besides agreeing to deepen cooperation in areas of security, defence, clean energy, trade and investment, the two sides have taken concrete steps to strengthen business ties.

This is important given the unhappiness that several German companies operating in India have expressed over doing business in this country. In July, German multinational giant, Bosch, drew attention to the array of obstacles in the way of its expansion plans in Karnataka. It took 19 months for the company to get approvals for two office buildings, Bosch pointed out and warned that it would consider moving elsewhere to implement its expansion plans if things did not improve. The Indian government appears to have taken such grievances seriously. During Merkel’s visit, India announced the setting up of a special fast-track mechanism to speed up decisions with regard to German investments exclusively. This is a welcome move. German companies will have a single point of contact with the Indian government instead of the current multiple layers of bureaucracy they need to engage with. It could boost German investment in India.

There were other takeaways too from the Merkel’s visit. Germany has come out in support of India’s bid to tap renewable energy sources like solar energy. It pledged $2.25 billion to develop a clean energy corridor and solar projects. It has also promised to facilitate the expediting of the India-European Union Free Trade Agreement. Importantly, a long-overdue resolution of the conflict over teaching of German in Indian schools has been reached. German will be taught in Kendriya Vidyalayas as an additional foreign language while modern Indian languages will be taught in Germany.

Agreements signed during Merkel’s visit indicate that the two sides are working to remove key obstacles in the way of a more fruitful bilateral partnership. This is heartening especially since the two countries can expect to be working together on several global issues in the coming months and years. Together with Japan and Brazil, the two are part of Group of 4 countries that are pushing for reform of the United Nations and seeking inclusion in the Security Council as veto-wielding permanent members. They will have to craft and coordinate a shared strategy to overcome opposition from regional rivals or the big powers to their UNSC bid and their attempt at reshaping the UN. Merkel’s visit to India was productive and signals that India-German relations are entering a new phase of deepening cooperation.