Chancellor Olaf Scholz's three-day visit to India, beginning October 24, 2024, is poised to significantly enhance the strategic partnership between Germany and India. This visit comes at a critical juncture for both nations, as they navigate complex geopolitical landscapes and economic challenges.

Strengthening Economic Ties

Scholz's visit underscores Germany's intent to diversify its trade relationships amidst deteriorating ties with China. With bilateral trade between India and Germany currently at about $26 billion, there is a clear ambition to increase this figure significantly, especially as Germany seeks alternatives to Chinese supply chains.

Scholz will participate in this major business event, which aims to foster deeper economic cooperation. Approximately 650 business leaders from Germany, India, and other countries are expected to attend, highlighting the importance of this gathering in promoting trade and investment opportunities.

Defence Cooperation

A significant focus will be on enhancing defence ties, particularly regarding India's procurement of six advanced submarines from Germany's Thyssenkrupp AG. This aligns with India's strategy to bolster its naval capabilities in response to China's maritime expansion.

Discussions are likely to include plans for joint military exercises and increased collaboration in defence production, supporting India's "Make in India" initiative. This reflects a broader strategy for both nations to address regional security concerns collectively.

The Indian Navy is actively pursuing a deal with Germany for the acquisition of six advanced conventional submarines under Project-75I. This project aims to enhance India's maritime defence capabilities and is estimated to be worth around $5.2 billion.

The German submarine manufacturer ThyssenKrupp Marine Systems (TKMS) has entered the deal after demonstrating its Air Independent Propulsion (AIP) capabilities, which are crucial for modern submarines.

This capability allows submarines to operate without surfacing for extended periods, significantly enhancing their stealth and operational effectiveness.

As of July 2024, the Indian Navy has completed field evaluations of the bids from both German and Spanish manufacturers. These evaluations included assessments of the TKMS submarine at a German shipyard earlier in the year.

The German government is backing TKMS in this endeavour, which indicates strong bilateral support for the deal. This support is essential for facilitating negotiations and ensuring that the deal progresses smoothly.

Migration And Skilled Labour

Germany is keen on attracting skilled labour from India to address its impending workforce shortages due to an aging population. Currently, around 1,37,000 Indians work in Germany, and the country aims to recruit approximately 4,00,000 migrant workers annually. This presents an opportunity for India to provide jobs for its youth while aiding Germany's economic needs.

The visit signifies a potential turning point in Indo-German relations, as both countries seek to align their strategic interests more closely. Scholz's discussions with Prime Minister Narendra Modi will likely cover:

Addressing tensions in the Indo-Pacific region, particularly concerning China's assertiveness in areas like the South China Sea and Taiwan. Both nations are expected to coordinate their positions on global issues within multilateral forums such as the G20 and the UN.

Chancellor Scholz's visit is anticipated to yield substantial outcomes that could reshape the economic and strategic landscape between Germany and India. By focusing on defence cooperation, economic ties, and labour mobility, this visit not only aims to strengthen bilateral relations but also positions both countries as key players in managing regional stability amid shifting geopolitical dynamics.