Saturday, April 26, 2025

Mission to Berlin

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Prime Minister Manmohan Singh is on a global odyssey when Delhi burns. But he is an achiever. India and Germany have agreed to conclude the Free Trade Agreement this year. Manmohan Singh and German Chancellor Angela Merkel have underlined their strong commitment to a successful outcome of the EU-India negotiations for a balanced FTA. It is expected to generate jobs and growth in both countries. Singh has pressed Germany to provide a strong political thrust to the Bilateral Investment and Trade Agreement with the European block. Merkel has pressed for an increase in the foreign equity cap in India’s insurance sector and reduction in tariff on import of automobiles from Europe. The BJP is unhappy that Singh has committed himself without consulting the Opposition. It fears that FTA would swamp the Indian market with dairy, poultry, sugar, wheat, confectionery, oil seeds, fishery and plantation products from the EU. It will compromise India’s agricultural sovereignty and food security, the BJP feels.

The joint statement also includes defence collaboration and cooperation in climate change, science and technology and education. India will be under pressure to join the export control regime. Singh is anxious to wrap up the deal before the parliamentary elections in 2014. Cooperation in higher education, research and technology is welcome. To what extent German FDI will strengthen Indian economy is however open to question. It will be a damper on agriculture which sustains 70% of India’s population. Beefing up Indian manufacturing with German hi-tech may be flawed by structural lacunae in Indian economy. Increase in the foreign equity cap in insurance will cause a furore in the Opposition benches in parliament. Hiking growth alone is not the way to eradicate poverty, corruption and the current account deficit in the nation’s economy.

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