Opinions

Supply chain cause, the Scholz effect


The importance of chancellor Olaf Scholz‘s two-day India visit, his first as head of government, and the first stand-alone visit to India by a German leader since 2011, should not be underestimated in the absence of big-ticket announcements. Talks focused on the building blocks to strengthen the partnership. At a time when Europe is reworking its supply chains, this is important.

Ukraine was, obviously, high on the agenda. Rather than view it as an effort by the Europeans to push India to take a clear stance against Russia, this must be viewed more as part of an effort to engage with India and the latter’s role as an honest broker. Scholz‘s engagement came even as China announced its peace plan for Ukraine. Germany‘s engagement with India on defence, particularly on jointly manufacturing advanced conventional submarines, in the context of reducing India’s dependence on Russia defence supplies, is part of the ongoing rearrangement of supply chains. Beyond the current geopolitical crisis, the Modi-Scholz meeting focused on taking forward the Partnership for Green and Sustainable Development finalised last year in Berlin, which provides a framework for an engagement in growth areas such as renewable energy, green hydrogen and biofuels. The possibilities of collaboration between Indian and German companies include manufacturing electrolysers for green hydrogen and in digital transformation, fintech, IT, telecom and diversification of supply chains.

Germany’s push, and Scholz’s personal commitment, to finalise the EU-India free trade agreement (FTA) and discussion on development projects in third countries indicate India’s growing footprint on the world stage. With closer ties with allies like Germany, India needs to leverage the moment.

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