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German Chancellor Angela Merkel and Prime Minister Narendra Modi have stressed on the importance of a balanced free trade agreement (FTA) between India and the European Union, and agreed to deepen efforts to restart negotiations on the Bilateral Trade and Investment Agreement (BTIA), while working together to restore the full-functioning of the World Trade Organisation (WTO).
"Both sides reiterated their strong support for a rules-based international trading system, with the WTO at its centre. Against this backdrop, all efforts should be made to restore the full functioning of the WTO dispute settlement system, and reform the WTO without undermining its fundamental principles such as Special and Differential Treatment, consensus-based decision making and development objectives,” according to a joint statement issued by the two countries following the bilateral meeting between the two leaders on Friday.
A win for India
Germany is one of India’s largest trading partners in the EU. India and the EU have been working on a free trade pact, formally called the BTIA, for over a decade now, but the talks have been falling apart from time to time due to differences over market access issues and opening up of the services sector.
On the sidelines of the German Chancellor’s visit, the two countries signed 22 MoUs and agreements in wide-ranging areas such as green urban mobility, artificial intelligence, education and smarts cities network.
The joint statement is significant for India, especially as certain members, including the US, are trying to strip India and other developing countries of the 'Special & Differential Treatment' status at the WTO. This allows poorer countries to have lower commitments for opening up markets compared to developed countries.
Deepening economic ties
Merkel, who is on a three-day visit to the country from October 31-November 2, attended a business forum and meeting to discuss ways to further foster partnerships. She also called on President Ram Nath Kovind.
"India and Germany will develop new possibilities of cooperation in e-mobility, fuel cell technology, smart cities, inland water ways, coastal management, cleaning of rivers and environmental protection," Modi said after the meeting. “I am very happy that far-reaching and strategic cooperation exist between India and Germany in every field, especially in new and advanced technology,” he said.
India also invited Germany to take advantage of opportunities in the field of defence production, especially in defence corridors in Uttar Pradesh and Tamil Nadu.
Both countries decided to intensify efforts for an early conclusion of an investment protection agreement between the EU, the EU Member States and India.
“India welcomed Germany’s decision to reinstate its policy to grant investment guarantees for eligible direct investments by German companies in India as a means to deepen bilateral economic ties,” the joint statement said.
The leaders agreed to promote a climate-friendly development of the Indian and German power markets in order to achieve the ambitious targets of the Indian government to provide 175 GW power from renewable energy until 2022 and 450 GW in later years and of the German government to provide 80 per cent of total power generation from renewable energy by 2050.
On Saturday, Merkel will meet business delegations from both countries and visit the Continental Automotive Components India at IMT Manesar, Gurgaon. She will also visit the metro station at Dwarka.
This is Merkel's fourth visit to India.
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