As German Chancellor Angela Merkel set off for her brief but intense trip to India earlier this month, the German conservative daily Die Welt ran a piece questioning her decision to travel to India while Germany was contending with the refugee crisis.

Estimates of the number of refugees arriving in the country have been rising rapidly and now around 1.5 million are expected to arrive in the country in 2015 alone, reflecting in part the far more welcoming stance adopted by Germany, compared to many of its European neighbours.

While the German economy has generated enough of a general government surplus to contend with the expected financial pressures placed on the country as a result of the crisis, it’s taken a political toll on Merkel herself with rebellion from even within her own ranks.

The leader of the state of Bavaria Horst Seehofer, a member of Merkel’s coalition partner CSU has threatened to take legal steps to ensure the state is able to restrict the number of asylum seekers arriving, while Foreign Minister Wolfgang Schaeuble has warned about limits to the country’s ability to integrate thousands of refugees.

Mixed response

Public opinion has also been mixed with a number of recent polls showing support for Merkel’s open door policy (that had been overwhelmingly positive) inching down. Combine that with the Volkswagen scandal rocking the country, and the extent to which the government was aware of its approach to emissions, and the ongoing crisis in Ukraine, and there’s little wonder that the trip to India received limited public and media interest.

In that context it’s rather remarkable that just two of the ministers (defence, and economy and energy) set to go on the trip to India pulled out, reflecting the significance accorded to the trip by the Chancellor and the German government.

A willingness to look beyond short-term crises, and ensuring that foreign policy remains aligned with economic and business interests, has long been a hallmark of German foreign policy, says Carsten Nickel, a senior analyst at Teneo Intelligence.

Nickel argues that the German tradition of sending large Chancellor-led business delegations to markets of particular significance has been one that many other nations (Britain included) have since modelled their approach on. “Germany has traditionally seen itself as a commercial power over the last 50 years… with smaller political ambitions,” he says. From that perspective there was certainly much achieved during the visit — with 18 MoUs on a range of topics from aviation security to manufacturing and disaster management.

Much to gain

Germany is also providing around 2 billion euros towards clean energy projects — a sector that Germany is keen to develop its global industrial reach in, as it meets its own ambitious domestic targets of generating around 35 per cent of its power from renewable sources by 2020.

There were also deals to boost cooperation on higher education and vocational skills training — which will be of particular importance to Germany as its companies develop their businesses in India, not to mention the skills and demographic deficit Germany is facing at home.

Most significant of all, from the German perspective was the government’s commitment to fast track approvals for German companies wishing to operate in India — while there are already some 1,600 German companies operating in India, there has been considerable caution about entering the market and concerns about bureaucracy and red tape — voiced by some members of the delegation ahead of the trip.

Still, the trip contrasts with the grand deals struck between India and other countries. “The German approach is incremental… the deals in vocational training or higher education, may not be the mega deals or big investment stories when China or Japan visit but these are incremental steps and they may be more sustainable in terms of relations between the two countries,” says Clemens Spiess, Programme Officer India, for the Robert Bosch Stiftung in Stuttgart.

However, the question will be whether it combined with Prime Minister Narendra Modi’s visit to Germany earlier this year will add further momentum to a relationship that has stalled — on the economic level at least — in recent years. Though Germany is India’s largest trading partner in Europe and seventh globally, India is just Germany’s 25th, from 17.4 billion euros in 2012, bilateral trade was just under €16 billion last year.

For stronger ties

While Germany is eager to establish itself as India’s foremost partner in Europe, several challenges lie in its way, argues Spiess, particularly given the lack of wider joint foreign policy commitments.

While there are no major contentious issues that divide the two (in the case of Britain for example, its stance on Kashmir that has long been a bone of contention with India), both share the ambition of becoming UN Security Council members. The trip to India included some discussions on the situation in Afghanistan, it was a far cry from the US India Civil Nuclear Agreement.

“Its clear that Germany and the EU are definitely not taken by India as serious security actors. It’s also because Germany and the EU don’t have a clear strategy for India and with Asia in general,” says Spiess. “Germany needs to develop a comprehensive and complete India and Asia strategy, but that has to happen and as long as there is muddling through the strategic partnership will not take off.”

For now at least though, both countries seem to content to keep things ticking over at the bilateral level. Interestingly during the visit, there was little discussion of the Free Trade Agreement, progress on which has stalled since the EU generic drug ban, and India’s review of the terms of existing trade agreements.

In Germany too, there is less public support for sweeping trade deals — most notably the Transatlantic Trade and Investment Partnership being forged with the US. Thousands gathered in Berlin for the largest of several rallies held across Europe to protest the deal last weekend.

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