Prime Minister Narendra Modi’s recent visit to Germany comes at a highly sensitive time. Only a few days ago, President Donald Trump returned from his trip to Europe and West Asia. His trip covered the NATO meet in Belgium and the G-7 summit in Italy. However, both German Chancellor Merkel and Trump made their opinions clear after these meetings. At an election rally in Munich, Merkel stated that Europe could no longer rely completely on its longstanding allies (namely the United States and the United Kingdom). Around the same time, Trump tried to deliberately insult Germany by tweeting about how the country’s huge trade surplus with the United States must change. While the official press releases claimed harmonious relations between the two powerful, transatlantic nations, all does not seem well between its leaders.
India has invested a significant amount of bandwidth in order to engage with its new friend America. With a visit to Germany during the times of the Trump-Merkel row, Modi was seemingly treading on thin ice. The improving friendship between India and the U.S. could be the reason behind a shift in its strategy with other nations. India’s decision to slow down the pace on its Iranian projects, despite Delhi terming the strategic co-operation with Tehran a necessity to counter Pakistan, could be a result of such closeness with America. This could also be a possible factor behind increasing bitterness in Indo-China relations since Trump was vocal against China in his campaign speeches. It can also be the force behind India’s long-standing ally Russia suddenly wooing Pakistan with arms sales. Thus, India’s friendship with America could have also resulted in India temporarily staying away from countries with which Trump had an ‘exchange of words’. However, Modi did not do that and instead went ahead with his visit.
Although Modi visiting Germany at such a sensitive time does not seem very impressive on paper, it is nothing less than admirable, given the growing frictions rocking foreign policy. With China becoming more assertive, Russia looking east post the western sanctions, India’s own neighbourhood turning to Beijing, centrist leaders in Europe battling far-right threats and a US leader who does not mince his words, it would have been tough to find a balanced path. In addition, Modi also had to make sure he was not being seen as a part of any single camp. However, Germany seemed open to hosting the Indian leader, as well as the Chinese leaders who visited the country after Modi. With Germany looking east for new allies, and the citizens rejoicing over taking the US leader head-on, the crux of the problem was whether Modi would go ahead with the visit at this sensitive time or not. Modi displayed an undeterred resolve to prioritise India’s national interests before anything else, despite India’s increasing friendliness with the United States.
Modi’s visit primarily covered issues such as the India-EU free trade agreement, German investments in India, climate change, and terrorism, with economic agendas remaining at the forefront. Twelve pacts were signed, including pacts on development and investments in chemical and engineering infrastructure. Additionally, Germany’s apprenticeship model would be a useful import for institutionalising skills-training in specific sectors. While all of these are yet to come to fruition on the ground, this can be termed as a renewed start for Indo-German partnerships and also for India’s partnership with other centrist leaders in Europe, especially the French President Macron.
Modi may have shown firm resolve by going ahead with his German visit but he has a lot to do in order to ensure that Germany’s business sector takes him seriously. Many foreign investors have been distraught because of India’s slow bureaucracy and red-tapism. Despite India moving upwards in the ‘Ease of Doing Business’ rankings, China still ranks leaps and bounds ahead of India. Germany’s trade with China is currently 10 times its trade with India. If India does not act fast, China will take home most of the winnings. This would involve avoiding retrospective changes in tax regulations, which have hit foreign investments and investor sentiments many times in the past. India may be required to stand up to the US repeatedly to gain such partnerships which are essential to the economic engine of the country. The acute challenge of job creation and investments in India cannot be over-emphasised. India has to address the sensitive investment protection treaty with Germany if it has to make German business houses comfortable with making long-term investments in India in larger volumes.
Finally, no matter what this visit will lead to in the long-run, it has managed to highlight the Prime Minister’s firm resolve for now. Since Modi went ahead with a visit to Germany amidst existing disagreements between Germany and US, his firm intention to not drift into any polarised world order and instead focus solely on India’s national interests has been laid out for the world to see.
A version of this post was originally published here.