Revitalising Indo-German relations

By K. K. Katyal

INDIA'S RELATIONSHIP with Germany, like most others in the industrialised world, witnessed ups and downs, but is now set on a steady course. Reflective of this turn is the coming visit of the German Chancellor, Mr. Gerhard Shroeder - the first at that level after 1993. The new warmth evident at the political level could help promote economic cooperation but this task will require redoubled efforts by the private sector in the two countries, apart from the Governments, as part of their role as facilitators. No wonder, therefore, that the Chancellor, during his stay here, will devote considerable time and attention to discussions on economic issues. He will be accompanied by a group of top figures from the corporate world in Germany.

It is an exciting relationship, a blend of the traditional and the modern, of sweet and sour, worth expanding and worth building upon. The developments of the past three years have a moral - New Delhi would do well not to nurse suspicions about the positions taken by Berlin on sensitive matters and, likewise, Germany needs to appreciate the compulsions and priorities of India, engaged in the gigantic task of development through democratic processes. The tendency to make comparisons with China on economic matters does not do justice to the reality of India and unnecessarily works to its disadvantage. To say this is not to suggest that New Delhi is not to put its house in order or to ensure efficient and hassle-free implementation of whatever policy decisions it chooses to take, in keeping with its priorities.

Despite an overriding commonality, India's ties with individual developed countries have had differing characteristics. This is best illustrated by the reactions to Pokhran II in May 1998. France had no hesitation in coming to terms with a nuclear India and did not subscribe to the punitive approach adopted by others. However, it could not persuade itself to cooperate with India in the peaceful use of nuclear energy (for the establishment of nuclear reactors) because of its adherence to the dos and don'ts prescribed by the nuclear haves. Russia, on the other hand, had had strong reservations about New Delhi's nuclear weapons programme, but did not let that come in the way of fostering ties in defence and related areas, including nuclear power projects. The U.S. and Japan relaxed their tough stand in varying degrees - Washington is now willing to withdraw the sanctions imposed in the wake of Indian tests, while Tokyo is averse to making the bilateral relationship hostage to a single issue. Germany, too, took a hard line but has, over time, reversed it almost completely. This is evident from its decision to resume development assistance, in the form of soft loans. The factors that impeded the expansion of bilateral dealings are, thus, out of the way.

Think of what happened on May 10-11, 1998, when an Indian delegation that had gone to Bonn for talks on development assistance found its appointments abruptly cancelled because of the nuclear tests, and the present situation, with the Chancellor planning a visit here, and the extent and nature of the thaw in bilateral relations will be clear. Three years ago, Germany sought to keep the dealings with India to the minimum. That approach changed in early 2000, notably with the trip of the German Foreign Minister, Mr. Joschka Fischer, and the subsequent visits by his colleagues, holding charge of Defence and Finance. The decision to resume development aid was taken in February this year after talks between the Finance Minister, Mr.Yashwant Sinha, and the German Minister for Development Cooperation, Ms. Heidemarie, on the margins of a World Bank meeting in New York. Her Ministry had been opposed to relaxation of the embargo on soft loans on the plea that India had diverted huge sums to the weapons programme but, finally, accepted the advice of the foreign office. Also Germany gave up its earlier policy of opposing aid programmes for India by the World Bank and the IMF.

All this served to remove irritants in the bilateral field but did not obviate the need for concrete steps to strengthen ties, both in political and economic fields. Take the case of economic relations, which followed a zig-zag course in the last four years. German investments tripled in the first few years after the 1991 economic policy changes - and, for some six years, Germany retained its position among the top five Indian investors in India. The investments totalled Rs. 21 billions in 1997. The following year, there was a big decline, to Rs. 8.5 billions, and though 1999 witnessed a reversal of the negative trend (with Rs. 11.4 billions), there was an alarming drop to Rs. 6 millions last year. The reason? The global slowdown was not the whole or convincing explanation; it had something to do with the view of German investors of the Indian scene - perceived hesitations by New Delhi about the second phase of reforms, unhelpful role of the bureaucracy, apart from the impression of political instability. During the visit, towards the end of October, of the German Chancellor and the business leaders, ways have to be found to reverse the falling investment trend and enhance economic relationship.

As regards trade, there is a tendency to derive comfort from the reversal in 2000 of the decline of the preceding three years. In the process, it is forgotten that India, representing one-sixth of the mankind, accounts for 0.6 per cent of German investments abroad and the same measly percentage of Germany's foreign trade. True, the spurt in the early 1990s is not to be treated as a reference point - that was the result of two highly favourable developments, the unification of Germany and economic reforms and opening up by India. But, there is no mistaking the huge potential that could be realised. Information Technology could help contribute to this process, but not on a permanent basis.

An interesting dimension to the bilateral interaction during the Chancellor's visit will be provided by the talks between the German Interior Minister, Mr. Schily, and his counterpart, Mr. L. K. Advani, who first met in June in Germany. The subjects of discussion will include training of police personnel in matters related to human rights and restraint in handling protest rallies (the German side claims considerable experience because of its record, especially in dealing with protesters against nuclear power reactors). Germany will be interested in seeking India's help in controlling illegal immigration and the abuse of its laws, regulating the entry of foreigners of various categories. This has become necessary because of the new openings - introduction of green cards for information technology experts, apart from prescribed quotas for qualified jobs. Mr. Advani's concern on terrorism and organised crime and the need for closer coordination at the U.N., too, is certain to figure in discussions.

In the political field, the two sides are poised for constructive engagement, while expanding the area of agreement and reducing that of disagreement. They continue to differ on nuclear and security matters. Even though the negative post-Pokhran reactions are a thing of the past, Germany continues to be critical of India's nuclear programmes. The two sides do not hide their differences but, at the same time, emphasise their joint commitment to the goal of global disarmament and non- proliferation. In public discourse, they skirt such contentious issues.

Both India and Germany have made known their interest in permanent membership of an expanded U.N. Security Council and although they have not openly backed each other's candidature, pointers of indirect support have not been lacking. Mr. Fischer made some significant points during his visit here last year - that India was on its way to becoming ``one of the most important powers of the 21st century'' or that it was a ``force for regional stability'' - and praised New Delhi's restraint during the Kargil conflict. On his part, the External Affairs Minister, Mr. Jaswant Singh, spoke of ``natural partnership'' between the two countries. Among the current global issues, both India and Germany are against the scraping of the Kyoto package on global warming. They have identical views on the importance of a multi- polar world. However, the proposal to establish an International Criminal Court finds them on different sides of the fence - with Germany not sharing India's fears on sovereignty abridgement. In the present setting, the two sides could take disagreements in their stride, while focussing on steps to enhance cooperation.

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