Amid Germany’s pressing need for skilled labour, upcoming talks between Prime Minister Narendra Modi and Chancellor Olaf Scholz are expected to concentrate on two major topics: the movement of Indian talent to Germany and the long-discussed India-EU Free Trade Agreement (FTA). With Germany facing a workforce shortage, these discussions which will take place in New Delhi on Friday (Oct 25, 2024) are seen as a critical step in addressing both nations’ economic and trade priorities.
India-EU Free Trade Agreement: A Key Focus
Germany, India’s largest trading partner within the European Union, has been a strong advocate for the India-EU FTA, which has been under negotiation since 2007. Jürgen Ratzinger, Managing Director of International Business at the Frankfurt Chamber of Commerce and Industry, emphasized the importance of the deal, stating, “The business community is strongly favouring the India-EU trade agreement. India is an important trading partner and the potential is huge. We want to tap into that growth story from India.”
According to information in the public domain, in 2023-24, two-way trade between India and Germany reached $26.48 billion. However, the FTA, once finalized, could significantly boost trade between India and the EU, removing barriers for businesses and simplifying regulations, especially for small and medium-sized enterprises (SMEs). Ratzinger expressed the need for clear, easier rules, saying, “This should be high on the agenda of the talks to get rid of the things in question and [that] are still not resolved.”
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The FTA is expected to facilitate deeper cooperation in various sectors, particularly innovation, research, and development. Ratzinger noted, “Cooperation in innovative sectors should be given focus. Both leaders are going to talk about the movement of talent across the borders. That’s very important.” These discussions will likely lead to smoother collaboration, benefiting industries on both sides.
Addressing Germany’s Skilled Labor Shortage
Germany is also facing a critical shortage of skilled labour, worsened by an aging population and a declining birth rate. Frank Burgdörfer, Managing Director of the Berlin-based policy firm Polyspektiv, highlighted the scale of the problem: “Without migration, we won’t be able to stabilise our population. We are having more deaths than births.” The lack of skilled workers has hit several sectors, including healthcare, logistics, engineering, and technology, particularly in eastern Germany, where around 40% of businesses report shortages of qualified staff.
As a result, Germany is actively seeking skilled labour from India, with an emphasis on filling roles in sectors such as nursing, engineering, and science. However, Burgdörfer noted that while migration is essential, it comes with challenges. High-level certification in the German language and integration into German society are crucial prerequisites for those aiming to work in the country. “In order to migrate to Germany, it is imperative to have high-level certification in the German language,” he said.
The Goethe-Institut offers specialized language programs for migrant workers.
Increasing Indian Investment in Germany
In addition to labour mobility, investment opportunities are also on the rise. Indian companies have been steadily expanding their presence in Germany, particularly in Frankfurt, a major financial hub. Ratzinger acknowledged this trend, noting, “Indian companies are increasingly migrating to Germany, exploring investment opportunities.” The talks are expected to strengthen this investment flow, helping businesses capitalize on new market opportunities.
However, hurdles remain. Language barriers, visa processes, and administrative challenges complicate the process of setting up operations in Germany. Ratzinger stressed the importance of simplifying these procedures, particularly for SMEs, by creating “easy and simple rules to do business.” This will allow more Indian companies to enter the German market with greater ease.
A Partnership for Mutual Benefit
The upcoming talks between India and Germany are poised to advance both countries’ economic interests. With the India-EU FTA nearing resolution and Germany’s urgent need for skilled labour, the discussions between Modi and Scholz could pave the way for closer cooperation. Both nations have much to gain from this partnership: Germany seeks to fill its labour gap, while India stands to benefit from increased trade and investment with the EU.
By addressing these critical issues, the talks aim to chart a course for mutual growth and strengthen economic ties between India and Germany in the years to come.
Disclaimer: Visit for this story was sponsored by the Federal Republic of Germany: Migration and Innovation
From: financialexpress
Financial News
