China's Rival


NEW DELHI/BERLIN (Own report) - The German foreign minister will be visiting India for the next few days, to intensify cooperation with one of China's most important Asian rivals. The visit will be focused on the development of business relations, which, in spite of the ambitious targets set and pretentious accords reached, has lagged far behind business with Beijing. Berlin is interested, among other things, in a rapid conclusion of the EU Free Trade Agreement with India, expected to appreciably enhance trade. These plans have been heavily criticized, not least of all because this could jeopardize the inexpensive production of generic medicine, which could save hundreds of thousands of lives. Berlin is also particularly protective of its arms industry companies, seeking to increase their production profits, which, because of austerity measures at home, seek new markets abroad. India is now supposed to buy German tanks. Columnists in the German press are drawing up a critical interim balance sheet on the fruits born by the efforts to build up India to become China's Asian rival. They note that China's influence is growing "much stronger than India's."

Ambitious Goals

The German foreign minister's trip to India will be focused on the development of bilateral business relations. Even though Germany (with over US $3.5 billion in investments) is among the most significant foreign direct investors in India and was able to appreciably increase its trade volume (from around 5 billion Euros in 2003 to 13.1 billion Euros in 2009, with a surplus of approx. 3 billion Euros), it remains uncertain, whether the ambitious goals set, can be achieved: attain a trade volume of 20 billion Euros by 2012. Therefore, trade with India remains inferior to that with China. In the People's Republic, German companies are not only making record investments,[1] but trade is also steadily increasing, reaching, last year, in spite of the global economic crisis, a new record of around 92 billion Euros (seven times the trade volume with India.) Several pretentious accords between Berlin and New Delhi have done nothing to change that situation. In 2000, an "Agenda for the German-Indian Partnership" was concluded, then in 2006, a "Common German-Indian Declaration" and in 2007 a "Common Statement on the Further Development of a Strategic and Global Partnership Between Germany and India", all without coming even close to the intensity of economic contacts to China.

Advantages for Western Companies

One of the measures, Berlin hopes will aid in enhancing trade with New Delhi, is the planned Free Trade Agreement between the EU and India. German companies have been calling for such an agreement for years.[2] It has been in negotiation since 2007 and should be ready for signing in 2011 at the latest. There is a growing amount of protests against this planned agreement. For example, critics complain that the planned liberalization of regulations would lower working standards not only in industry, but also in the fishing and extractive industries; it would force many out of work. The smaller fishing companies would be no competition for the European fishing fleets. The planned liberalization of trade would provide advantages for European trading companies, but the small retailers would be unable to compete, threatening the existence of up to twelve million of them.[3] Massive protests are already growing louder against the German Metro Co., which has begun conquering the Indian market.[4] Also being criticized is the planned lowering of customs tariffs, which would lead to reduced state intake - with adverse effects on government social welfare spending. Critics also complain that it is no longer possible to protect weakened branches of the Indian economy against the onslaught of foreign companies.

Money More than Human Life

"Doctors Without Borders" has now initiated a campaign aimed also at the EU Free Trade Agreement with India. According to "Doctors Without Borders," the trade agreement threatens the production of generic medicine in India, because EU patent rights ("protection of intellectual property") are more respected than the protection of human life through inexpensive medicine. "We are buying 80% of our HIV/AIDS medicines in India," reports the organization. Today, this can keep 160,000 people alive. In 2008, international donors, including EU governments, bought even around 90% of their HIV/AIDS medicines from generic producers in India. The international president of "Doctors Without Borders" announced that he "would not remain silent, while the EU is in the process of shutting the doors to access to medicine".[5]

Tanks for India

Berlin would not only like to see New Delhi withdraw its protection of its domestic economy and cease the production of inexpensive medicine, but also buy German military hardware. The German Minister of the Economy, who had visited India at the end of September, had been accompanied by several representatives of the German arms industry. India wants to buy 126 fighter planes for its air force, at an estimated price of up to US $20 billion. The German/French EADS Corp. is competing for this contract also against strong competition in Sweden and Russia. ThyssenKrupp Marine Systems wants to sell its submarines to India, while the Krauss-Maffei Wegmann tank producers, are also looking to India for new sales, because over the next few years, the German Bundeswehr will probably have to reduce its buying of new weaponry, due to planned budget cuts. Therefore, German arms producers - already exporting 70 percent of their products - have reinforced their search around the world for new markets, not least of all because some of their traditional customers - particularly Spain and Greece - have cancelled because of financial difficulties. Now India is also being wooed to boost the weapons producers' profits with sales of German fighters and tanks.


From a strategic point of view, Berlin's striving to enhance its economic relations with India not only increases the profits of individual companies, but through its contacts to New Delhi, Berlin above all is strengthening its relations with one of the People's Republic of China's most important rivals. To secure global western hegemony, Western strategists love to pit India against Beijing by strengthening this traditional regional rival. A German daily columnist, assessing the interim results, wrote that New Delhi's recently held "Commonwealth Games" were shattering in comparison to Beijing's Olympic Games - with desolate planning and miserable implementation for this major event. The journal wrote in regards to the unrest in Kashmir, rebellions in north-eastern India and religious strife, that "in comparison to this backdrop of conflicts, China appears to be a haven of stability,"[6] in spite of the fact that India's "operations in Kashmir are no less heavy-handed" than China's in Tibet. Whereas both countries had a comparable gross national product in the 1980s, the Chinese is "four times larger" than India's today. Over the past twenty years, the poverty rate in China has declined from 60% to about 10% while India's has at best been halved. These are but a few examples.

Lagging Behind

This is not without grave political consequences, which, according to the newspaper's column, run counter to Western strategic plans: "China's regional influence is growing incomparably faster than India's."[7] This means that the West's most important regional ally is lagging behind its main rival.

[1] see also Deutschland gegen China (II)
[2] see also Mythos Multilateralismus
[3] EED, WEED (Hg.): Die Fesseln des EU-Indien-Freihandelsabkommens. Die indische Wirtschaft im Visier der Europäischen Union, Bonn/Berlin 2009
[4] see also Metro entwickeln
[5] "Europa - Hände weg von unseren Medikamenten!" Ärzte ohne Grenzen startet weltweite Kampagne gegen Beschränkung der Generikaproduktion; 07.10.2010
[6], [7] Demokraten und Meritokraten; Frankfurter Allgemeine Zeitung 13.10.2010