M A I N   N E W S

India, Germany add muscle to their ties with six pacts
Manmohan-Merkel meet: Berlin presses for hike in insurance equity cap; no decision on FTA
Dinesh Kumar in Berlin

Agreements signed Joint Declaration of Intent on promotion of German as a foreign language in India Inter-Government Memorandum of Understanding on Cooperation in the field of Higher Education Joint Declaration of Intent on Indo-German cooperation in Civil Security Research Joint Declaration for bilateral “Kooperations Program” of the German Federal Ministry of Food, Agriculture and Consumer Protection and the National Seeds Association of India and the German Association of Plant Breeders Joint Declaration of Intent on the establishment of an Indo-German Working Group on Quality Infrastructure for Cooperation in Standardisation, Conformity of Assessment and Product Safety Joint Declaration of Intent on Indo-German Development Cooperation regarding the establishment of Green Energy Corridors Elusive Free trade agreement India and Germany did discuss the specifics, but more for taking stock and giving policy directions rather than from the point of negotiations.  Negotiations will figure when Commerce and Industry Minister Anand Sharma meets EU Trade Commissioner Karl De Gucht in Brussels next week.  On EU’s demand for India increasing FDI in the insurance sector, Manmohan Singh said the Cabinet had already approved increasing it from 26% to 49%. But this requires approval from Parliament. Manmohan on iran We respect Iran’s right to use nuclear technology for peaceful means. But as a signatory to the nuclear non proliferation treaty (NPT), they have an obligation. We stand for peaceful and egotiated solutions and so diplomacy must get maximum support.

April 11
Indo-German relations took a major step forward with the two countries signing six major agreements pertaining to higher education, civil security research, agriculture, infrastructure and green energy (see box) at the end of the second Inter-Governmental Consultative meeting held here today in the presence of Prime Minister Manmohan Singh and German Chancellor Angela Merkel.

What was unique about this bilateral meeting, as Foreign Secretary Ranjan Mathai later remarked that rarely has an Indian Prime Minister sat in a bilateral meeting accompanied by as many as five Cabinet Ministers.

Both the above highlight of the visit and the agreements signed mark an increasing strengthening of economic and political ties between the two countries with India voicing interest in furthering economic relations, expanding defence cooperation anchored in technology transfer, co-development and co-production in India, easing of German export controls for India, continuing efforts through the G4 for reforming the UN Security Council while, in addition to the agreements signed, agreeing on the importance of an early conclusion of a balanced India-EU Board Based Trade and Investment Agreement and on setting up a High Technology Partnership Group.

At the same time, the two sides were candid to admit that there was still some way to go before EU would agree to signing a Free Trade Agreement (FTA) with India. There were currently three main areas that required further negotiation and a need for finding a middle path - (i) an increase in the FDI cap on insurance (from 26 per cent to 49 per cent), (ii) relaxations in the tariff rate in the automotive sectors and (iii) safeguarding of intellectual property rights (IPR).

There was also an exchange of views on Iran, a rather delicate issue considering that Iran is India’s fourth largest source of oil supply and is located in its neighbourhood. But statements made on this issue by both Manmohan Singh and Merkel at the joint news conference affirmed that both were committed to finding a way out that both were against Iran acquiring nuclear weapons.

But what appeared certain was that Indo-German relations were on a sound footing like before. The two sides discussed more ‘serious’ issues of terrorism, export controls, possible areas of defence partnership and other strategic issues. But as Manmohan Singh said in his opening statement “Economic ties have been a defining feature of our relationship. Germany is one of our largest economic partners. I encouraged increased German participation in India’s rapid economic growth and our plans to modernise and upgrade our manufacturing and infrastructure sectors. Our infrastructure plans entail investment of a trillion dollars in the next five years”.

Merkel was equally effusive in commenting on the progress made between the two countries. “Relations have deepened steadily and I thank Prime Minister Manmohan Singh for giving such a high profile to Germany”, she said while taking note of the vibrancy of India’s economic growth and the potential that is waiting to be further tapped in several economic and social service sectors considering that 65 per cent of Indian still live in rural areas.

India and Germany also discussed the ongoing economic crisis in the Eurozone. “The situation in the Eurozone is of importance to the rest of the world,” said Merkel even as Manmohan Singh affirmed that a strong and resilient Eurozone was in the world’s interest while expressing the hope that crisis will quickly resolve.

Merkel puts up spirited defence

Chancellor Merkel gave a spirited reply when a German journalist asked why Germany was silent on human rights violations in India, particularly with respect to women and children, when it was otherwise so critical of both Russia and China. “Shouldn’t you be criticising India?” he asked. Merkel was quick to say that it is easy to have a theoretical debate. But the ground realities need to be considered. Prime Minister Manmohan Singh is more than aware of the challenges and the situation. We are aware of the problem and Germany is assisting on this difficult path”, she said.

Although the question was directed to Merkel, Manmohan Singh chose to respond with some candour. ‘India is a well functioning democracy which accords full respect for human rights and freedom. In our system there is a role for civil society to make changes, express criticism and to peacefully demonstrate. But poverty is our greatest problem which we cannot solve in a short time. Our women deserve a better deal and I am the last to deny that sometimes things could be better”, he said. He then went on to comment on the sordid gang rape incident that occurred in Delhi last December saying how that incident had mobilised civil society which had subsequently led the parliament to enact a new legislation within a short time.