India-Germany Relationship: An opportunity to embark on clean and green future collectively

In March 2023, European Commission President Ursula von der Leyen underscored the need to accelerate action on the European Green Deal. In an address to the European Parliament, she urged European nations to stay frontrunners in development of clean tech and for securing the supply for critical materials needed for green transition. Industrial and competitive prowess of European countries, coupled with international outreach, can greatly facilitate this transition.  Germany, the largest and most industrialized economy in the EU and one of the most innovative as well, will have a crucial role to play in this endeavour. 

The German chancellor’s visit to India just days before Ms Leyen’s address is a testimony to the importance of Germany’s role in this respect. An important pillar of the discussion between the chancellor and the Indian prime minister was the Green and Sustainable Development Partnership signed between the two nations in May 2022. Amongst other aspects, the partnership framework includes development of an Indo-German Green Hydrogen Roadmap, an Indo-German Renewable Energy Partnership, circular economy for solar technologies, cooperation on management of natural resources, and a 10-billion-euro assistance to India to aid climate action.

The relationship between both countries is premised upon democratic values and is underpinned by several institutional arrangements, such as the Indo-German Parliamentary Friendship Group, Indo-German Energy Forum, and Indo- German Environment Forum, in addition to several thematic Joint Working Groups. These fora facilitate engagements between heads of states, ministers and parliamentarians, alongside multilateral cooperation, security cooperation, investment protection, development cooperation, state-city partnerships, cultural integration, higher education, and other collaborations among members of the diaspora.

These are steps in the right direction. However, there are also significant differences between the two countries. For instance, India and Germany are quite disparate in the stage of their development. Germany’s gross domestic product per capita is 46,364 euros while India’s is 2,042 euros (2021, World Bank). This difference conflated with differences in size and population, suggest that the partnership between the two countries should be based on principles of equity. Such a partnership could be enabled through the complementarity that India offers in the sheer scale and size of opportunity for renewable energy industry and concomitant benefits for the environment.

The key challenge is that of high cost of transition on people and economy in the deployment of green energy. Therefore, while ensuring reliable, affordable, secure, clean, and green energy are common objectives for both countries, the partnership must be based on fair frameworks for trade, technology, and finance.

These were among the issues under consideration for a delegation from India that travelled to Germany in February 2023. The delegation, organized by the India office of the Friedrich-Ebert-Stiftung, comprised of a policy maker, energy transition experts, an energy-transition entrepreneur and a journalist. The delegation learned about Germany’s approach to managing its just transition to clean energy and the strategies that have been put in place to ensure energy security. The delegation explored ways in which India could learn from Germany's experiences and adapt them to its own context. To this effect, several meetings were organized to understand the transition process, at city level, state level and national level. The delegation's visit to Germany was seen as an important step in strengthening cooperation between India and Germany around just energy transition and climate change. The delegation hoped to build on the existing partnerships and collaborations between the two countries and explored new avenues for cooperation.

One area where India could greatly benefit from German expertise is the innovation in technology. This requires a partnership that encourages Indian industry to embark on greater R&D spending. R&D investment in India is just 2 per cent of profit on average, while in Germany it is 55 per cent. Recently, Naushad Forbes, chairman of Fords Marshall and past president of the Confederation of Indian Industries laid out a roadmap of how that could be done in India. This, he describes, as a journey from OEMs (original equipment manufacturer) to ODM (own design and manufacture) to OBM (own brand manufacture).

Recently, both countries have also signed a Migration and Mobility Agreement for enhanced ease of mobility between the two countries. The Agreement, hailed as a milestone for an intensified German-Indian partnership, is aimed at welcoming qualified young Indians to gain professional and practical experience in Germany while resolutely fighting against irregular migration.  In the current context, the contours of a mutually beneficial relationship between the two countries can also be based on a cleaner, greener, and more secure future.

Towards this endeavour, the following three steps could be the key, as learned during the delegation visit: 

► First, India and Germany could work on creating a knowledge-sharing platform on Just Transition. Ideas such as Coal Commission and representation of labour unions in the board of utilities are useful examples of institutional calibration that Germany can offer. India has made policy announcements incorporating Just Transition phraseology in practice. For instance, the Ministry of Coal, Government of India, has recently announced that it will have a Just Transition division, which will draft sustainable coal mine closure plans for areas economically dependent on coal.

Similarly, the Ministry of Power has also shown keen interest towards preparing different approaches for the repurposing of power plants as well as the development of alternative economic and employment options. Jharkhand has emerged as the first state to have formulated a formal approach to Just Transition. The German experience can come in handy in that it reinforces the need for careful planning through social dialogue; but more importantly the German experience underscores the point that the process is unavoidable and enduring but one that must be robust for deep and lasting outcomes.

► Second, in wake of uncertainty over gas, Germany is stepping up R&D on new technologies such as Green Hydrogen. In this regard, cooperation between Indian and German research institutions can enable greater exchange on technology and techno-commercial aspects.  -

► Third, India and Germany should conduct exchange of bureaucrats and technocrats who are closely involved in policy making on emerging technology. Such exercises must be structured with the knowledge support of German and Indian think tanks who are engaged in geo-political and technical research. The effect of such endeavours will contribute to the global good. Therefore, greater exchange between respective universities, governments, businesses, and people must ensue. Deepening the lines of dialogue between the two countries will be the key.

The views expressed in this article are not necessarily those of FES.