Datanomics: Ties with Germany to power India-EU relations ahead

The visit is significant in the wake of ongoing discussions to finalize the India-European Union FTA

On January 12, India and Germany inked 27 memoranda of understanding (MoUs) and a Joint Declaration of Intent, spanning across several sectors, during the visit of German Chancellor Friedrich Merz to India. Further, PM Narendra Modi said both India and Germany have decided to make their economic partnership ‘limitless’. The visit is significant in the wake of ongoing discussions to finalise the India-European Union (EU) FTA. 

Moreover, EU leaders are set to be the chief guests at India’s Republic Day this year, furthering the growing relationship between India and the EU.

 

India’s trade deficit highest in FY25 

The merchandise trade between the two countries reached its highest in FY25. However, the trade is skew­ed in favour of Germany, with India’s trade deficit at its peak in FY25. Germany’s share in India’s total exports in FY26 (Apr-Nov) was 2.56 per cent, while its share in India’s imports was 2.48 per cent. 

 

 

Indian citizens in Germany more than doubled in 2024 

Germany announced a visa-free transit facility for Indian passport holders transiting through the country. The number of Indian citizens more than doubled during 2017-24. 

 

India’s GDP inches closer to Germany

 

Germany’s economy (in nominal terms) has grown at a compou­nded annual growth rate (CAGR) of 3.72 per cent from 2001-25. Meanwhile, India’s gross dome­s­tic product will be nearly $4.1 trillion in FY26, growing at a CAGR of 8.85 per cent during the same time period, going closer to Germany.