Germany Eyes India Trade Boost, Defense Deals During Chancellor's Visit
Overview
German Chancellor Friedrich Merz's visit aims to accelerate the India-EU Free Trade Agreement and deepen strategic partnerships. Discussions will focus on trade expansion, potential defense contracts, including submarine acquisition, and bolstering mobility and technology cooperation. Germany seeks to leverage India's market and skilled workforce.
Stocks Mentioned
Chancellor Merz Lands in India for Key Economic and Defense Talks
German Chancellor Friedrich Merz began a two-day visit to India on Monday, aiming to inject political momentum into stalled India-EU Free Trade Agreement negotiations. The trip prioritizes strengthening trade ties, securing critical defense acquisitions, and boosting cooperation across technology, mobility, and skill development.
Boosting Trade and FTA Talks
Germany stands as the European Union's largest trading partner for India. Both nations anticipate significant gains from the proposed India-EU FTA. Sources indicate the Chancellor and Prime Minister Narendra Modi will focus on bridging remaining differences to facilitate a substantial announcement at the upcoming India-EU Summit in New Delhi.
Labor Mobility and Skill Development Focus
With Germany experiencing a labor shortage, Merz's visit will emphasize operationalizing the December 2022 Migration and Mobility Partnership Agreement. Streamlining visas for Indian healthcare workers, engineers, and IT professionals is a key objective. Both countries are also working to strengthen industry-oriented vocational education and training models.
Defense Cooperation and Tech Partnerships
A potential finalization of an Inter-Governmental Agreement for six advanced stealth submarines, valued at an estimated $5.2 billion, is a significant focus. Germany's defense exports to India have increased amid eased export controls. Discussions will also explore cooperation in AI and semiconductors.
Business Engagements and Bilateral Trade
Chancellor Merz, accompanied by approximately 25 German CEOs, will visit Ahmedabad and Bengaluru, engaging in business forums to further boost the India-Germany partnership. Bilateral trade in goods and services reached $51.23 billion in 2024-25, with Germany accounting for roughly one-fourth of India's trade with the EU.
