Garmany’s Scholz pledges stronger trade with India to curb China dominance
“We need to take a different approach. One that I would like to call being open, without being naive,” says the German Chancellor
GERMAN Chancellor Olaf Scholz called for further diversification of the nation’s trade as he looks to reduce the economy’s dependence on China in favour of India.
“We must avoid one-sided dependencies, particularly in areas of strategic importance – critical raw materials and certain technologies, for instance,” Scholz said at the Asia-Pacific Conference of German Business, which he opened alongside Indian Prime Minister Narendra Modi in New Delhi on Friday (Oct 25).
“We need to take a different approach. One that I would like to call being open, without being naive,” Scholz said.
Germany is trying to cultivate India as a source of trade and geopolitical support as its deteriorating relations with China cast a pall over the country’s economic future. Scholz started on a three-day visit to India on Friday accompanied by a large delegation of ministers and executives as he seeks to forge a strategic partnership with Modi.
India offers trading partners like Germany policy stability, political continuity and abundant labour, Modi said at the conference, highlighting his party’s recent election win that brought him back to office for a third term.
“Today, India is the centre for diversification and de-risking,” he said. “India is becoming a hub for global trade and manufacturing.”
Scholz also referred to the need for “de-risking,” saying it doesn’t mean less trade or less openness. “For us, de-risking means diversification.”
Germany is pushing for the European Union and India to finalise their free trade agreement soon, he said, adding that “this could happen in months rather than years.”
Later on Friday, Scholz and Modi will chair a joint Cabinet meeting. The two sides are expected to sign agreements, including possibly on defence and labour supply. BLOOMBERG
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