German Chancellor Friedrich Merz has emphasised the critical need for an India-EU Free Trade Agreement to unlock the full potential of economic ties between India and Germany.

Speaking during a joint press conference in Gandhinagar, Gujarat, alongside Prime Minister Narendra Modi, Merz described India as a "desired partner" and a "partner of choice" for Berlin. This statement underscores the strategic importance Berlin places on its relationship with New Delhi amid evolving global dynamics.

Merz highlighted that concluding FTA negotiations between India and the European Union remains essential for maximising bilateral economic relations. He noted the burgeoning opportunities in trade, investment, and industrial collaboration that such an agreement would facilitate.

The Chancellor's remarks reflect Germany's keen interest in deepening economic engagement with India, a fast-growing economy pivotal to Europe's diversification strategies.

The press conference took place against the backdrop of significant geopolitical shifts. Merz observed that the international order is undergoing profound changes, characterised by great power politics and the resurgence of spheres of influence. He urged nations to brace against these "rough winds," positioning India-Germany ties as a stabilising force in an uncertain world.

Defence cooperation emerged as a key pillar of the discussions. Both leaders witnessed the signing of a Memorandum of Understanding aimed at enhancing collaboration in defence industry development, production, innovation, and global supply chains. Merz stressed the strategic significance of this partnership, particularly in light of escalating global tensions.

The MoU is poised to foster joint ventures in advanced defence technologies, leveraging India's indigenous manufacturing capabilities and Germany's engineering prowess. This aligns with India's push for self-reliance under initiatives like Atmanirbhar Bharat, while supporting Germany's goals for resilient supply chains. Such cooperation could extend to areas like aerospace, electronics, and next-generation weaponry.

Merz expressed ambitions to elevate India-Germany relations to a "new level." He thanked Prime Minister Modi for hosting him in Gujarat, Modi's home state, viewing it as a gesture of deep friendship and strong bilateral bonds. This personal touch highlights the warmth in high-level interactions driving the partnership forward.

The visit marks Chancellor Merz's first official trip to India since assuming office, coinciding with milestones in diplomatic history. It celebrates 75 years of India-Germany diplomatic relations and 25 years of their Strategic Partnership. These anniversaries provide a timely platform to reaffirm shared visions on economic resilience, security, and global governance.

Merz's itinerary reflects the multifaceted nature of ties. On 13 January, he is scheduled to visit Bosch, a cornerstone of German industry in India, followed by Nano Science and Engineering at CeNSE. These stops symbolise the fusion of industrial heritage with cutting-edge research, areas where both nations excel.

India-Germany economic relations have grown robustly in recent years. Bilateral trade exceeded €20 billion in 2025, with Germany as India's largest trading partner in the EU. Investments from German firms like Siemens, Bayer, and Volkswagen have bolstered sectors such as automotive, renewables, and pharmaceuticals.

The proposed India-EU FTA could supercharge this momentum. Negotiations, relaunched in 2022, aim to eliminate tariffs on over 90 per cent of goods and enhance services trade. For Germany, it offers access to India's vast market; for India, it means technology transfers and premium exports.

Defence ties, though nascent, hold immense promise. Past collaborations include submarine projects and joint exercises. The new MoU builds on a 2024 defence pact, potentially opening doors for co-development of systems like fighter jets or missile tech—areas of mutual interest given regional threats.

Geopolitically, the partnership countersbalance influences from China and Russia. Both nations share concerns over Indo-Pacific stability and supply chain vulnerabilities exposed by the Ukraine conflict. Aligning on these fronts strengthens their roles in forums like the Quad and G20.

Merz's visit builds on frequent high-level exchanges. Recent summits have yielded deals in green hydrogen, semiconductors, and AI. Gujarat, a hub for manufacturing, exemplifies India's appeal, with its vibrant ecosystem drawing German investments.

Challenges persist, including non-tariff barriers and regulatory divergences in the FTA talks. Yet, political will from leaders like Merz and Modi signals progress. Successful conclusion could set a template for India's FTAs with the UK and others.

Looking ahead, the partnership eyes emerging domains like space and quantum tech. India's Gaganyaan and Germany's satellite programmes could intersect, much like their defence synergies. This forward-looking approach positions both as pillars of a multipolar order.

Chancellor Merz's pronouncements in Gandhinagar herald a transformative phase for India-Germany relations. By prioritising the India-EU FTA and defence MoU, both nations are forging a resilient alliance amid global flux, promising mutual prosperity and security.

Based On ANI Report