EU–India FTA in Focus: What’s on the Agenda as German Chancellor Friedrich Merz Meets PM Modi
German Chancellor Friedrich Merz is in India on a crucial visit that could shape the future of trade, defence, and strategic cooperation between India, Germany, and the European Union. His meeting with Prime Minister Narendra Modi comes at a time when global politics is increasingly uncertain and major economies are reassessing alliances, supply chains, and security priorities.
With the EU–India free trade agreement negotiations gaining momentum and geopolitical tensions rising across the world, Merz’s visit is being closely watched by policymakers and businesses alike.
Why This Visit Matters Right Now
A World in Flux
India and Germany are navigating a rapidly changing global landscape. Relations between the world’s major powers, especially the United States and China, are under strain. Europe is dealing with economic pressures and security concerns, while India faces trade barriers and shifting geopolitical alignments.
In this context, stronger cooperation between India and Germany, the European Union’s largest economy, is seen as both timely and strategic.
Meeting PM Modi: A Symbolic and Strategic Moment
Celebrating Long-Standing Ties
According to India’s Ministry of External Affairs, Friedrich Merz will meet Prime Minister Narendra Modi in Ahmedabad. The meeting coincides with two major milestones: 75 years of diplomatic relations between India and Germany, and 25 years of their strategic partnership.
Officials say the visit is expected to give fresh momentum to bilateral ties, especially in areas like trade, technology, defence, and sustainable development.
EU–India Free Trade Agreement Takes Centre Stage
A Deal Beyond Tariffs
One of the biggest talking points during Merz’s visit is the long-pending EU–India free trade agreement. Negotiations are picking up pace ahead of an upcoming EU–India summit later this month.
India’s commerce ministry has described the proposed agreement as more than just a trade deal. It aims to reflect modern economic realities, covering not only tariffs but also supply chains, technology cooperation, sustainability, and investment protection.
For both sides, the deal is seen as a way to reduce dependence on volatile global markets and strengthen economic resilience.
Economic Pressures from the US and China
Shared Concerns, Shared Opportunities
Germany and India are both feeling the impact of strained relations with major global players. Europe has been unsettled by recent signals from the United States, including aggressive foreign policy postures and trade uncertainty.
India, on the other hand, continues to face high tariff barriers in the US market. These pressures are pushing New Delhi and Berlin to look more closely at each other as reliable long-term partners.
Merz’s visit is seen as a chance to align strategies in response to these shared challenges.
Defence and Security Cooperation in Spotlight
Submarines and Strategic Technology
Defence cooperation is another major item on the agenda. India and Germany are reportedly in advanced discussions over a massive submarine manufacturing deal that could be worth more than $8 billion.
The proposed agreement involves German firm Thyssenkrupp Marine Systems and India’s Mazagon Dock Shipbuilders, with a strong focus on technology transfer and domestic production.
If finalised, it would be the largest defence deal India has ever signed and could significantly reduce India’s reliance on Russian military equipment.
Critical Minerals and Supply Chains
Reducing Dependence on China
Germany is keen to improve access to India’s critical minerals, including rare earth elements that are vital for semiconductors, electric vehicles, and renewable energy technologies.
Berlin is working to reduce its dependence on China for these materials, and India is emerging as a key alternative partner. During the visit, both countries are expected to sign a memorandum of understanding to strengthen cooperation in this area.
This partnership could play an important role in building more secure and diversified global supply chains.
Semiconductors and Advanced Manufacturing
Building the Future Economy
Business collaboration in high-tech sectors such as semiconductors is also expected to feature prominently. India is pushing hard to become a global manufacturing hub, while Germany is looking for stable partners to support its industrial base.
Several agreements related to semiconductor development, clean energy, and industrial innovation are likely to be discussed during Merz’s meetings with Indian leaders.
Labour Mobility and Healthcare Professionals
Addressing Germany’s Skill Shortage
Germany is facing labour shortages across multiple industries, including healthcare. As part of this visit, both sides are expected to sign an agreement to make it easier for Indian healthcare professionals to work in Germany.
This move could benefit both countries. Germany would gain access to skilled workers, while Indian professionals would find new opportunities in one of Europe’s strongest economies.
Strong Business Presence
CEOs and the Mittelstand in India
Merz is travelling with a large delegation of German business leaders, including top executives from Siemens, DHL Group, Infineon Technologies, Uniper, and Airbus Defence and Space.
The delegation also includes representatives from Germany’s Mittelstand, the network of small and mid-sized manufacturing companies that form the backbone of the German economy. Many of these firms are under pressure at home and see India as a key growth market.
Their presence highlights the strong commercial focus of the visit.
Pharmaceuticals and Industrial Collaboration
Expanding Cooperation Beyond Trade
Pharmaceuticals are another sector where both countries aim to deepen cooperation. Senior executives from major German pharma companies are part of the delegation, signalling interest in joint research, manufacturing, and market access.
Industrial cooperation between defence companies is also expected to grow, reflecting the broader push for strategic autonomy and technological collaboration.
Merz’s India Itinerary
From New Delhi to Bengaluru
After meetings in Ahmedabad and New Delhi, Merz is scheduled to visit Bengaluru, India’s technology and innovation hub. There, he will tour a Bosch facility, underlining the importance of industrial and technological collaboration.
Bengaluru’s role as a centre for engineering, software, and advanced manufacturing makes it a natural stop on a visit focused on future-oriented partnerships.
India–Germany Relations at a Glance
A Strong Economic Partnership
Germany and India are the world’s third- and fifth-largest economies respectively. Their economic relationship is already robust, with nearly $50 billion in bilateral trade.
More than 2,000 German companies operate in India, while over 700 Indian companies have investments in Germany. For India, Germany is its most important trading partner within the European Union.
As the fastest-growing economy in the G20, India plays a key role in Germany’s Indo-Pacific strategy.
What to Watch
A Visit with Long-Term Impact
While it remains unclear which agreements will be formally announced during Merz’s visit, the direction is clear. Both countries are pushing for deeper economic integration, stronger security ties, and closer coordination on global challenges.
The outcome of the EU–India free trade talks, progress on defence cooperation, and new agreements on critical minerals and labour mobility could shape the partnership for years to come.
In an increasingly divided world, the Merz–Modi meeting signals a shared intent to build stable, forward-looking alliances.
