German Chancellor Olaf Scholz’s Visit to India Strengthens Strategic Ties and Defense Cooperation in Indo-Pacific

German Chancellor Olaf Scholz-Narendra Modi

German Chancellor Olaf Scholz underscored Germany’s growing commitment to the Indo-Pacific region, primarily through defense and strategic partnerships with India During his visit to India on October 25 and 26, 2024. The Chancellor’s itinerary included a visit to Goa, where two German naval vessels were conducting joint exercises with the Indian Navy. Scholz’s presence at the naval exercises marked a symbolic moment, emphasizing Germany’s increasing participation in Indo-Pacific security initiatives.

The visit comes as Germany deepens its defense and economic ties with India while navigating geostrategic uncertainties, particularly concerning China and Russia. Additionally, a subtle unease about potential shifts in U.S. foreign policy following the upcoming U.S. presidential elections looms over these discussions.

Germany’s recent Indo-Pacific deployments have shown a significant shift in its foreign policy, with regular and extended naval presence in the region since 2022. The strategic alignment aims to foster a resilient security architecture to counterbalance China’s influence, involving like-minded allies beyond the Quad, including India, Germany, France, and the UK.

Germany’s cooperation with India has been evolving, highlighted by the release of its “Focus on India” strategy paper. While the document addresses economic and technological interests, it also includes an entire section dedicated to defense—a significant inclusion that reflects Germany’s shift towards a more balanced relationship, including security partnerships. Notably, the section on defense (2.2) is placed immediately after foreign policy, suggesting its elevated importance in Germany’s engagement with India.

The strategy highlights three core aspects of Germany’s defense goals with India:

  • Increased Joint Exercises: With both nations committing to regular and strategic joint exercises, Germany’s naval participation in the Indo-Pacific reflects a shared interest in regional stability.
  • Training Exchanges: Expanding training exchanges between the armed forces of the two countries ensures a greater synergy and familiarity between the personnel, further enhancing operational alignment.
  • Collaborative Intelligence and Logistics: Germany plans to place an officer at India’s Information Fusion Centre (IFC) in Gurugram, a regional hub for maritime intelligence sharing. This move, along with an agreement for reciprocal logistical support, facilitates easier deployments of the Bundeswehr in the Indo-Pacific.

These measures underscore Germany’s commitment to supporting India in defense capabilities, a shift aimed at reducing India’s dependency on Russia—a longstanding defense supplier.

While the defense relationship between Germany and India holds great promise, certain bureaucratic and logistical challenges remain. Licensing issues, particularly concerning tank engines for India’s light tank, Zorawar, slowed procurement and delivery timelines. However, recent adjustments in Germany’s export controls, including on tank engines, signify progress. In 2023-24, Germany’s defense exports to India totaled $166 million, positioning India as its third-largest defense market. Germany is eager to further capitalize on this, enhancing India’s access to German arms and defense technology.

A focal point of these discussions is the potential sale of German submarines to India under the P75 program. Germany’s ThyssenKrupp Marine Systems (TKMS) is one of the two contenders for the project to produce six modern submarines in India. While German interest in the project has fluctuated over the years—prompting even a temporary withdrawal—it has gained renewed support under the current German Defense Minister, Boris Pistorius, who has been vocal in advocating for TKMS.

In a compelling coincidence, Spain’s Prime Minister visited India shortly after Chancellor Scholz. The submarine deal’s intensifying competition between Germany’s TKMS and Spain’s Navantia reflects both nations’ desire to secure this critical contract. While submarine procurement was not the primary agenda of either leader’s visit, it remained a significant underlying theme.

To strengthen its case, Spain demonstrated its defense commitment to India by inaugurating the Tata-Airbus C295 transport aircraft facility in Vadodara. Although Airbus is a multinational European conglomerate, this particular project has Spanish leadership, further positioning Spain as a contender in India’s defense collaboration efforts. By contrast, Germany has faced setbacks, such as missing the chance to contribute to India’s Zorawar light tank program, which has limited its defense collaboration footprint. However, Germany’s focus remains on securing the submarine contract, an ambition closely tied to its partnership with Mazagon Dock Limited.

In addition to Germany’s defense push, there is room for improvement in its approach to foreign direct investment (FDI) and technology transfer. Unlike Japanese and Korean firms that have created industrial parks in Indian states, German companies have shown limited interest in such large-scale ventures. Both Japan and Korea have invested in projects around the Noida International Airport in Jewar, for instance, while Germany has yet to pursue a similar initiative in India.

Germany’s strategic contributions to India’s defense industry have often been limited by a lack of local joint ventures, particularly for ancillary industries. Increasing the scope for technology transfer and providing offsets, especially in India’s defense corridors in Uttar Pradesh and Tamil Nadu, could enhance Germany’s attractiveness as a defense partner. Such ventures would not only benefit the local economy but also contribute to India’s ambitious self-reliance goals in defense manufacturing.

Despite these challenges, Germany’s commitment to strengthening its ties with India remains evident. The recent joint statement between India and Germany called for “enhanced industry-level cooperation in the defense sector,” with a particular focus on technology collaboration, co-production, and co-development of defense platforms.

Germany also seeks to diversify its presence in the Indian market through economic initiatives. The “Focus on India” paper goes beyond defense, covering a wide range of economic and technological partnerships. Yet, defense collaboration, especially in areas such as electronics and advanced manufacturing, remains a strategic priority. The German government has encouraged partnerships between Indian and German companies to facilitate knowledge transfer and the growth of India’s defense manufacturing capabilities.

The Indo-Pacific is at a crucial turning point, with rising tensions stemming from China’s growing assertiveness. For Germany, as well as for other European allies, establishing a security framework that can withstand potential disruptions is vital. Beyond Quad nations, Germany’s proactive stance in the Indo-Pacific sends a strong message of solidarity with regional allies committed to preserving the rules-based order. German deployments in the region, notably under the Indo-Pacific strategy, reflect an ongoing commitment to counterbalancing China’s influence.

However, Germany’s strategy also underscores concerns over the possible return of Donald Trump to the U.S. presidency. Trump’s previous administration was marked by erratic foreign policy, raising doubts about the consistency and reliability of U.S. alliances. By bolstering its relationships with Indo-Pacific nations, Germany is not only countering Chinese influence but also preparing for a potential future in which U.S. commitments may waver.

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