German Chancellor Friedrich Merz is heading to New Delhi this weekend, accompanied by a large delegation, as Berlin intensifies efforts to deepen political, economic and strategic ties with India.

The visit follows a recent trip by Foreign Minister Johann Wadephul, underlining India’s growing importance in Germany’s foreign policy calculus.

Germany’s renewed focus on the world’s most populous country, with around 1.45 billion people, is driven by both economic pressures and geopolitical realignments.

While Germany has been mired in recession for nearly three years, the OECD projects India’s economy will grow significantly faster than China’s this year, DW.COM reports.

Trade between Germany and India has expanded steadily, reaching €29 billion ($33.7 billion) in 2024, although this remains modest compared with Germany’s trade volume with China, which stood at approximately €246 billion in the same year.

Germany is also increasingly turning to India to address its acute shortage of skilled workers. Indians now form the largest group of foreign students at German universities, with many specializing in science and engineering.

Major German companies have shifted research and development activities to India, reflecting the country’s growing role as a global hub for services and innovation.

Christian Wagner, an India specialist at the German Institute for International and Security Affairs (SWP), said India has evolved rapidly. “It began with call centers. Now it is research facilities. Many large German companies have outsourced their research institutes to India,” he noted, adding that India now functions as “the office of the global economy,” while China remains “the factory of the global economy.”

Merz has repeatedly warned that the liberal world order is under pressure, citing growing instability, overlapping crises and the return of war to Europe.

Without naming the United States directly, he has expressed concern about US tariff policies and potential shifts in Washington’s defense commitments toward Europe.

He has also spoken of increasing systemic rivalry with China and argued that the World Trade Organization is no longer functioning effectively, urging Europe to build a new rules-based trading system. In this context, Merz sees India as a key partner in diversifying supply chains and strengthening Germany’s competitiveness.

“For the sake of our security and competitiveness, diversifying raw material supply chains and trading networks must be a priority,” Merz told German ambassadors last year, announcing plans to strengthen strategic partnerships beyond the transatlantic sphere.

Despite the growing engagement, Germany’s relationship with India is complicated by New Delhi’s close ties with Moscow. Indian efforts to maintain strategic autonomy have frustrated Western attempts to draw the country into sanctions against Russia following the invasion of Ukraine.

India continues to purchase large volumes of Russian oil, some of which is refined and resold to Western markets, effectively circumventing EU sanctions.

According to Wagner, Merz is unlikely to change India’s position. “It is comparatively difficult to bring India to the West’s side. India will stick with its course of strategic autonomy and continue to maintain good relations with Russia,” he said.

Merz has previously supported imposing tariffs on countries that trade with Russia. In August 2025, US President Donald Trump raised tariffs on Indian goods to 50 percent, one of the highest rates applied to a US trading partner, over India’s continued purchase of Russian oil. Although US and Indian officials are now seeking to ease tensions, India remains firmly committed to its relationship with Russia.

Defense cooperation is another sensitive area. Around 60 to 70 percent of India’s military equipment is of Russian origin, and New Delhi is reportedly negotiating further deliveries of S-400 air defense systems from Moscow. Russia remains India’s largest arms supplier, followed by France.

In 2025, France secured a €6.6 billion deal to supply 26 Rafale fighter jets to India. Germany, by contrast, lags far behind in arms exports to the country. However, Berlin hopes to secure future contracts as India embarks on a major modernization of its armed forces, including potential orders for Airbus A400M transport aircraft and submarines from German shipyards.

Germany’s outreach to India reflects a strategic effort to reduce dependence on China, mitigate the impact of US tariffs, and secure new economic and security partnerships. However, India’s independent foreign policy, deep ties with Russia and emphasis on strategic autonomy mean that closer cooperation will not come without limits or complications.

As Merz arrives in New Delhi, both sides are expected to highlight strong bilateral relations in trade, technology and innovation, even as underlying geopolitical differences continue to shape the partnership.