Germany pledged over one billion euros to India’s solar energy push as the two countries struck a deal to fast-track investments from the European powerhouse and revived stalled talks on a crucial India-EU free trade pact on Monday.
Prime Minister Narendra Modi and German chancellor Angela Merkel signed 18 agreements on the second day her three-day visit, agreeing to enhance ties in key areas, including defence, intelligence, railways, trade and combating terrorism.
“In a world of challenges and opportunities, India and Germany can be strong partners. German strengths and India’s priorities are aligned,” Modi said after three-hour-long talks.
Both leaders also committed themselves to reviving the Broad Based Trade and Investment Agreement (BTIA) that has been in cold storage since India walked out of talks earlier this year over an “unwarranted” ban on 700 Indian generic drugs by the European Union.
“It’s our hope this matter would be looked at fairly and sensibly and would hopefully not be an impediment to the free trade deal,” foreign secretary S Jaishankar said.
While many issues remained outstanding, the Merkel visit —with a high-profile delegation of four cabinet ministers, senior officials and 20 CEOs — seemed to have given a fillip to the stalled free-trade pact talks.
“The PM urged the Chancellor to use her influence to ensure the right decision was made by the regulators in this regard,” Jaishankar said. Talks are also stuck on issues relating to intellectual property rights (IPR), data security for IT services, automobile tariffs and Indian domestic laws dealing with procurement.
Germany, a world leader in renewable energy, will provide funds for solar projects, in addition to funding the proposed green energy corridors — or high-efficiency power grids —as announced a few years ago.
“I place great value on Germany’s assistance”, Modi said. The assistance comes days after India submitted an ambitious climate plan, announcing plans to aggressively ramp up energy generation from non-fossil fuel sources but not committing to absolute emission cuts.
“We have understood, Prime Minister, that climate protection needs to be embraced by the people — who also have to reap a benefit,” Merkel said.
Modi also said the two countries intended to deepen research cooperation in clean and renewable energy, and energy efficiency. “To contain temperature rise we must also change our temperament” he said.
Under the trade agreements, German firms will have a single point of contact in the administration, helping them to navigate a complicated web of red tape that often thwarts business initiative.
The agreement is the first of its kind and comes as Modi seeks to attract massive amounts of foreign investment to back his flagship Make in India drive to boost industrial investment and create jobs.
Asia’s third-largest economy has been relatively insulated from a slump in global trade, but Modi still needs to boost exports for his pitch to investors to create skilled jobs for millions of young Indians.
Germany, Europe’s largest economy, is looking to expand its presence in India to compensate for a slowdown in China, and offered assistance for flagship projects like Make in India, Digital India and the Clean Ganga project.