German Chancellor Friedrich Merz is currently in India on an official visit aimed at strengthening economic and security ties between the two nations. This visit, which began on January 12, 2026, marks Merz's first trip to Asia since assuming office last May and underscores India's growing importance as a strategic partner for Germany.
The primary objective of the visit is to deepen economic relations with India, a nation of 1.4 billion people that represents significant opportunities for German exporters. Bilateral trade between India and Germany has reached nearly 50 billion euros. With sales in China slumping and German firms facing increasing competition from Chinese rivals, Germany is actively seeking new growth markets. Florian Wenke of Germany Trade & Invest stated that "German foreign trade is looking for growth markets, and India is precisely that".
Merz's visit also aims to advance discussions on the long-pending EU-India Free Trade Agreement (FTA). Jan Noether, head of the Indo-German Chamber of Commerce, believes the timing of the visit is "absolutely ideal," especially with an EU-India free trade agreement appearing within reach. Both countries see mutual benefit in an India-EU FTA and Investment Protection Agreement. Negotiations are progressing, with the next round of discussions scheduled for March in Brussels. The EU and India aim to finalize the FTA by the end of 2025.
In addition to trade, discussions will focus on the recruitment of skilled labor from India, particularly in the IT and healthcare sectors, to address Germany's chronic labor shortage. Germany also intends to increase visa availability for skilled workers from India.
The visit includes a diverse agenda, with Prime Minister Narendra Modi hosting Chancellor Merz in Ahmedabad, Gujarat, where they will attend a kite festival and visit the Sabarmati Ashram. Merz will also travel to Bengaluru, a major technology hub. The leaders are expected to engage with business and industry leaders to exchange views on regional and global issues. Discussions will cover cooperation in trade and investment, technology, education, skilling and mobility, defense and security, science, innovation and research, and green and sustainable development.
Germany considers India a "partner of choice, not convenience". India offers potential growth markets for German green energy technology and defense exports and is interested in broader partnerships to diversify its dependencies. Germany is India's largest trading partner in the European Union, with bilateral trade crossing $26 billion in 2024. German foreign direct investment in India has exceeded $14 billion, spanning various sectors, including automobiles, engineering, chemicals, and clean technology. There are over 1,800 German companies operating in India, employing several hundred thousand people.
Germany is the 9th largest foreign direct investor in India, with cumulative FDI of $15.11 billion from April 2000 to March 2025. German investments in India in FY 2024-25 were $469 million. Recent German investments include a €571 million investment by Deutsche Bank in November 2024 and a €338 million investment by Schneider Electric in February 2025.
The visit occurs against a backdrop of rising geopolitical tensions, with discussions expected to cover global challenges and shared strategic interests. It also reinforces the idea that strategic autonomy remains viable, even in an era of hardened blocs.
