India-Germany trade can surge 10-fold, says Piyush Goyal

Berlin: India-Germany bilateral trade can increase to 310 billion from around 31 billion at present if they focused on co-creating and leveraging complementary strengths, commerce and industry minister Piyush Goyal said on Thursday, while German economic affairs and energy minister Katherina Reiche called for cutting red tape and working on joint projects.

Reiche said the bilateral trade could be doubled. Addressing India-Germany Business Roundtable here, Goyal said the India-EU free trade agreement (FTA) is expected to be signed by the end of this year and should become operational within the next 4-5 months. He did not specify a timeline for achieving a 10-fold jump in bilateral trade, leaving it to businesses to determine the roadmap.

Germany is India's top trading partner in Europe and there are more than 2,000 German companies in India, he noted. German manufacturing, precision engineering, nuclear science and commitment to quality coupled with India's push to upgrade infrastructure, "our digital capabilities and our youthful, skilled, and talented people can together shape an outstanding future," Goyal said. The two countries can bring resilience to their supply chains and have transformational impact on each other's economies. "We can even help you grow faster than the 1.9% you are expecting this year," he said. The minister also called for cooperation in strengthening economic security without compromising openness, creating industrial opportunities through the green transition and using emerging technologies to drive growth while maintaining trust.

"Trust is the hardest currency in commerce today," he said, stating India and Germany should move beyond products merely being "Made in India" or "Made in Germany" towards goods and technologies "co-created" by both countries. He called for closer links in trade, investment, manufacturing, research and academia. Goyal also inaugurated the India Centre of German Council on Foreign Relations (DGAP). The centre could play a key role in strengthening bilateral understanding and shaping the future of the partnership by providing a platform for Indian perspectives in Berlin and helping Indian stakeholders better understand Germany and Europe, he said.

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Bilateral meet

Earlier in the day, Goyal held a bilateral meeting with Reiche, where they discussed issues related to AI, semiconductors and energy, among others. "Discussed opportunities in AI, semiconductors, advanced manufacturing, critical minerals, green hydrogen, renewable energy, energy storage, and resilient supply chains, as well as increased investment in India's industrial and digital ecosystems," Goyal said in a social media post.

"We also exchanged views on how the India-EU FTA will prove to be a game-changer that would help businesses in both India and Germany realise their full potential," he said.

FTA progress

Reiche said it took 20 years to finalise the India-EU FTA, which is touted as the "mother of all deals" but it is based on rules and common gains. The EU expects up to 4-billion savings in duties on European exports to India. "Our businesses can actually use this FTA...With the FTA, we have a strong foundation," she said, adding that Indian entrepreneurs are "more than welcome" in Germany.

Goyal said the agreement had been finalised after years of negotiations, with the final points concluded in January this year. He expressed confidence that it would move towards signing rapidly following the necessary parliamentary processes. He urged businesses to begin preparations ahead of the agreement's implementation by identifying customers, investors and collaborators, exchanging information on quality requirements and pricing, and preparing to expand trade and investment.

"The agreement really got finalised in the last 13 months," Goyal said. He said there is no dissent from any of the EU countries or India. "Everybody also accepted the language, which would otherwise be quite a constraint to get so many different language translations and the legal benefits. But the sense of urgency, the mutual commitment to make this happen, was remarkable," the minister said.