Germany is eyeing enhanced economic partnerships with India, drawn by the country’s youthful population and rapidly growing economy, making it a prime target for industrialized nations seeking to bolster trade relations.
However, navigating regulatory standards poses a significant hurdle, particularly concerning laws like the German Act on Corporate Due Diligence Obligations in Supply Chains. This legislation, aimed at preventing child and forced labour and ensuring fair wages and worker safety, presents challenges for potential partners, given India’s diverse industrial landscape, particularly among small and medium enterprises (SMEs).
Carl-Julius Cronenberg, spokesperson for the Free Democrats parliamentary group on Mittelstand (SMEs) and Free Trade, advocates for a more flexible approach in implementing such regulations. Following a two-day visit to India in early February, Cronenberg suggests that while human rights violations must be addressed, Indian industries may require tailored sustainability standards rather than strict adherence to European norms.
Amid negotiations for free trade agreements with the South American trade bloc and India, Cronenberg emphasizes the importance of considering how such legislation is perceived by potential trading partners. He believes imposing incompatible standards could hinder progress and suggests a more collaborative approach.
Cronenberg views India as a key market for European companies, highlighting opportunities for mutual growth. He sees potential for European expertise to complement India’s skilled workforce, particularly in areas like electronics manufacturing. A comprehensive free trade agreement, including provisions for foreign direct investment and geographical indications, could significantly boost trade between the two regions.
Beyond industrial partnerships, Cronenberg advocates for closer educational ties and the promotion of vocational training, aiming to strengthen ties between Germany and India. He also expresses optimism for expanded trade relations with other South Asian countries, emphasizing the potential for German involvement across the region.
However, Cronenberg stresses the need for streamlining bureaucratic processes in India to support the growth of SMEs. He also calls for measures to reduce overregulation, aligning with Germany’s social market economy model.
In addition to economic cooperation, Cronenberg sees opportunities for educational collaboration, particularly in applied sciences. He envisions India as a gateway to the broader South Asian market and hopes for increased German engagement across the subcontinent.