Context: Germany recently announced new commitments worth more than €1.2 billion, or Rs 10,025 crore, to India to support its fight against climate change.

Key Points

  • A statement released by Germany said, 
    • The focus of the financial commitment to India will be to tackle climate change and assist in the country’s ongoing energy transition.
    • Try to work together with India and help with climate change, renewable energy and similar projects, which also helps in working towards our own goals we promised at COP26 in Glasgow.
  • The Intergovernmental Panel on Climate Change (IPCC) released earlier this year found that both India and Germany will suffer more extreme events due to climate change. 
  • Both countries together account for nearly 9 per cent of global greenhouse gas.
  • At COP26, India and Germany agreed to phase down unabated coal power. Germany will exit coal by 2038, possibly much earlier. 
  • And India has just joined a multilateral Coal Transition Programme funded by the Climate Investments Funds and supported by Germany. 
  • Very concretely, India has already identified 50 gigawatts of coal plants for retirement by 2027.

Current Germany-India in energy sector

  • Germany is already working with India in the focal areas of Energy (€5.08 bn), Sustainable Urban Development (€3.16 bn), Management of Natural Resources and Agriculture (€435 mn) and other activities, particularly vocational training, health and social protection (€568 mn).

New Commitments

  • In its new commitments, Germany has allotted €713 million for energy, €409 million for urban development and €90 million for agroecology and natural resources.
  • These projects will include supporting India’s targets to expand solar power generation.

Related Facts

India’s bilateral relationship with Germany

Since the inauguration of the India-Germany strategic partnership in 2001, relations have grown in a robust manner. 

  • India is one of the few countries with which Germany holds Cabinet-level Intergovernmental Consultations (IGC).  The IGC is a unique broad-format dialogue chaired by both leaders with members of Cabinet from the two sides holding initial discussions in their respective areas of responsibility.
  • They signal growing political engagement and economic partnership that has led to strong institutionalised arrangements to discuss bilateral and global issues.
  • Although trade and investment have been at the heart of the bilateral engagement, the IGC has expanded its scope to artificial intelligence and digital transformation, and pushed forward the ‘Make in India Mittelstand’ programme. 
  • Other areas of cooperation include science and technology, sustainable energy, smart cities, and circular economies.

Significance of Indo-German relations

  • Tackling slowdown: As both countries are together reeling under slowdown, both can find ways to further collaborate and converge to find sustainable and effective solutions. 
  • India stands to gain from Germany as Germany is an economic powerhouse just as Germany stands to gain because she is a promising market that is growing and developing
  • High end manufacturing: Germany is famous for internationally acclaimed high-end brands like Daimler, Siemens etc.. India is an obvious choice for German companies due to the availability of potential markets and talent pools.
  • Renewable sector
    • India and Germany have signed an agreement on technical cooperation under the Indo-German Energy Programme – Green Energy Corridors (IGEN-GEC).
    • Germany also provides a loan of 7 million euro for training activities in the photovoltaic solar rooftop sector.
  • Post Brexit scenario: The kind of Europe that emerges post Brexit is critical for India. Thus, we need to have a very good economic relationship with Germany as well as France in the post Brexit era.
  • Germany's role in reviving the India-EU free trade talks
    • India has made a special appeal to Merkel to take the lead in this context. 
    • India had called off talks when the EU banned 700 Indian pharma companies from exporting to the EU because one company was found wanting on quality standards.

Read more about the Glasgow Climate Pact

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