India Germany Sign Pact to Shore Up Defence Industrial Cooperation

Syllabus: GS2/IR

Context

• India and Germany signed agreements spanning sectors such as defence, technology, health, energy and human resources.
  • The German Chancellor Friedrich Merz is on a two-day visit to India.

Major Outcomes

• The two sides concluded 19 agreements and made several policy announcements.
• Defence and Security Cooperation:  Joint Declaration of Intent on strengthening bilateral defence industrial cooperation.
  • It is aimed at promoting long-term collaboration through co-development, co-production and technology partnerships. 
• Trade, Economy and Technology: Highlighting strong economic ties, the leaders noted that bilateral trade in goods and services surpassed USD 50 billion in 2024, accounting for over a quarter of India’s trade with the European Union.
  • Several agreements and declarations were signed to boost cooperation in semiconductors, critical minerals, telecommunications, digitalisation, artificial intelligence and innovation.
• Green and sustainable development: Both leaders reviewed progress under the Green and Sustainable Development Partnership (GSDP), noting that nearly €5 billion of Germany’s €10 billion commitment up to 2030 has already been utilised.
  • They welcomed new funding commitments and the launch of joint working groups on battery storage, solar manufacturing and wind energy.
• Global and regional issues: India and Germany reaffirmed backing for the India-Middle East-Europe Economic Corridor and called for comprehensive reform of the UN Security Council.
• Education, mobility and culture: Germany allowed visa-free transit for Indian passport holders, describing it as a boost to travel and exchanges.
  • The leaders also welcomed new agreements on higher education, skilling, renewable energy training, sports cooperation, maritime heritage and youth exchanges, further strengthening cultural and social links.
• Other agreements include:
  • Joint Declaration of Intent for Joint Cooperation in Research and Development on Bioeconomy.
  • Joint Declaration of Intent on the extension of tenure of the Indo-German Science and Technology Centre (IGSTC).
• Both leaders agreed that the next India-Germany Inter-Governmental Consultations will be held in Germany later in 2026, reaffirming their shared commitment to elevating the Strategic Partnership to new heights.

India and Germany Bilateral Ties

• Establishment of Ties: India was among the first countries to establish diplomatic ties with Germany after the Second World War in 1951.
  • 2026 marks the 75 years of the establishment of diplomatic relations.
• Strategic Partnership: Since 2000, India and Germany have had a ‘Strategic Partnership’ and 2025 marks the 25 years of Strategic Partnership. 
• Intergovernmental Consultations (IGC) in 2011: The IGC framework allows for a comprehensive review of cooperation and identification of new areas of engagement at the Cabinet level.
  • India is among a select group of countries with which Germany has such a dialogue mechanism.
• Defence Cooperation: Bilateral Defence Cooperation Agreement was signed in 2006 and provides the framework for bilateral defence ties.
  • Germany Participated in many multilateral exercises with India, such as: MILAN, PASSEX, EX TARANG SHAKTI-1.
• Trade Cooperation: Indo-German bilateral trade touched an all-time high of US$ 33.40 billion with exports from India at US$ 15.09 billion and imports to India from Germany at US$ 18.31 billion in 2024. 
  • India was Germany’s 23rd largest trading partner in 2024 and Germany was the 8th largest trading partner for India in and is India’s largest trading partner in the EU.
• Development Partnership: Germany is one of India’s biggest development partners (≈€24 billion committed).
  • Green and Sustainable Development Partnership (2022): Germany pledged €10 billion by 2030.
  • Collaboration in renewable energy, metro projects, green corridors, and smart cities directly aids India’s climate goals and SDG commitments.
• Multilateral Cooperation: 
  • Support for India’s permanent seat at UNSC.
  • Coordination at G20, UN, WTO, COP climate talks.
  • Both emphasize rules-based international order and Indo-Pacific security.
• Indian Diaspora: There are around 2.46 lakh (2023) Indian passport holders and Indian-origin people in Germany.
  • The Indian diaspora mainly consists of professionals, researchers and scientists, businessmen, nurses and students. 

Conclusion

• Germany is significant for India as a gateway to Europe, a leader in green technology and innovation, and a partner in shaping a multipolar, sustainable world order. 
• The relationship complements India’s priorities in economic modernization, climate action, skill mobility, and strategic security.

Source: BS