India and Germany are seeking a stronger strategic and economic embrace. Nearly 15 months after then-German Chancellor Olaf Scholz’s visit in October 2024, Friedrich Merz, the current German chancellor, came to India on January 12-13, pursuing an upgrade of the Germany-India strategic relationship.
Scholz visited India three times in two years. Merz’s visit is his first to the country and also his first to Asia since assuming office in May 2025. While the Germany-India bilateral relationship witnessed modest progress during Scholz’s tenure, current geopolitical shifts, the unsettling weaponization of tariffs, and adventurism by the Trump administration could add momentum to the strategic embrace. Both India and Europe could benefit from diversifying supply chains, reducing dependencies and addressing global instability.
Merz’s visit came just two weeks before the potential conclusion of the India-European Union free trade agreement negotiations, which the Indian commerce minister as well as the EU president have already hailed as the “mother of all trade deals.” The joint euphoria is understandable. With the India-U.S. trade deal running into strong headwinds and the European parliament suspending the EU-U.S. trade deal that was concluded in July 2025, the India-EU deal could provide much-needed diversification of trade and contribute to building resilient supply chain. All European countries, including Germany, would benefit. Indian exporters, reeling from a 50 percent tariff in the United States, which potentially could go up to 75 percent due to India’s economic contact with Iran, would receive a new lifeline.
It isn’t surprising therefore that Merz was invited to Ahmedabad in Prime Minister Narendra Modi’s home state of Gujarat. Since Modi assumed office in 2014, a trip to Gujarat has been used as an honor, bestowed on select visiting dignitaries. While Scholz never went there, Merz’s trip to Ahmedabad included a session of flying kites with Modi in the annual International Kite Festival and a customary trip to Sabarmati Ashram, which was the residence of Mahatma Gandhi, the father of the nation.
A large official and business delegation accompanied Merz, illustrating the broad nature of Germany-India engagement from trade to services, education, and mobility. The German ambassador to India aptly summed up the visit in a newspaper article, writing, “A stronger Indian economy means a bigger market for German products, and a stronger footprint of Indian companies in Germany spells more competitive products and services for German businesses and consumers.”
Germany has been interested in the mobility of skilled Indians, not only to join its industries but also to work in newly opened sectors such as caregivers and nurses. As of 2024, over 137,000 skilled Indians were in Germany, primarily in STEM, IT, healthcare and engineering sectors.
India’s tech capital, Bangalore, has become a must stop for German chancellors, and Merz visited the city on the second day of his trip. He visited the headquarters of Bosch India and the Indian Institute of Science’s (IISc) Center for Nano Science and Engineering (CeNSE). His visit underscored India’s importance not only as a strategic partner but also a technological hub for Germany, with discussions focusing on deepening cooperation in AI, sustainable mobility, and digital transformation.
India is interested in speeding up the strategic partnership in general and defense deals in particular, which it feels have been bogged down by difficulties relating to export clearances. Here, too, there could be signs of positive change. India’s foreign secretary held a rather long press briefing along with the official spokesperson even as the chancellor continued with his official engagements in Gujarat on January 12. The secretary touched upon on what has changed in Germany’s approach to doing business with India.
“Compared to the earlier situation — when export clearances required significant time and, in many cases, were not granted easily — we have now seen that these clearances are being processed much faster and more efficiently. In fact, the backlog that existed earlier has now been almost entirely cleared,” he said.
Among the defense deals that are of immense interest to India are ongoing talks with the German ThyssenKrupp Marine Systems (TKMS) on the joint production of six submarines in India. The Indian Navy wants six next-generation conventional submarines with air-independent propulsion amid China’s expanding undersea presence in the Indian ocean. New Delhi seeks indigenous construction of these submarines along with long-term technology transfer as well as development of a domestic submarine-building ecosystem. TKMS is understood to have consented to these terms. The coming months could see the signing of the deal, which is worth $8 billion. That would be a watershed moment in defense relations between the two countries
However, both countries still seem to be at odds with regard to Russia, with Merz indirectly hinting that increased joint defense production would lessen India’s reliance on Moscow. India’s foreign secretary, in his press briefing, sidestepped the issue, focusing more on the “growing convergence between India and Germany.” This does point to a change in accommodation patterns, illustrating the need for cooperation between the two countries, both of which seek hedges against rising U.S. protectionism and shifting global trade alignments.
Modi will travel to Berlin later this year for the eighth India-Germany Intergovernmental Consultations, a mechanism for high-level annual meetings established in 2011. By then, corresponding to the shifts in geopolitics and global trade patterns, both countries could see their relations strengthening further. As major powers, both India and Germany can shape the contours of the emerging new world order if they institutionalize mechanisms and strengthen their relationship on matters of global and regional consequence.
