Situation and cooperation

An Indian school girl in a slum in Delhi

India is a country of extreme contrasts. For all its booming metropolitan centres such as Mumbai, Delhi and Bangalore, more than 20 per cent of the country's population, i.e. around 280 million people, still live on the equivalent of less than 1.90 US dollars a day. Almost 15 per cent of the population in India is undernourished, and 38 per cent of children under the age of five suffer from stunted growth as a result of chronic undernourishment. The 2017 Global Hunger Index describes the situation in India as "serious".

Public spending on education and health is still insufficient to meet the needs of the entire population. The services offered are also often of poor quality. As a consequence of the poor educational services, about a quarter of the adult population is illiterate. There are also shortcomings in the country's infrastructure. For example, more than 260 million people in India live in homes with no electricity, around 790 million have no access to sanitation.

Although gender equality is enshrined in the constitution, girls and women are still seriously disadvantaged in Indian society. While their access to educational and health facilities has improved significantly, in many families there is still a bias towards the male members when it comes to the apportionment of food, medical care and education. Violence against women is widespread.


Pharma manufacturing in Bangalore, India

Over the past twenty years, India has seen stable economic growth. In 2016, the national economy expanded by 7.1 per cent, and for 2018 the International Monetary Fund (IMF) is expecting economic growth of 7.4 per cent. In some fields – for example, information technology, pharmaceutics, space flight and biotechnology – the country is now a global leader.

In the past few years, the Indian government has amended a number of laws. Among them were measures to open up the country to more investment from abroad, to simplify approval processes and to bail out state-owned banks. In 2016, the government decided to introduce a single value-added tax throughout India. Furthermore, in November 2016, the Indian government declared all banknotes in denominations of 500 and 1,000 rupees invalid, in a move to fight corruption and illicit earnings. As a consequence, some 85 per cent of the cash in circulation became worthless literally overnight.

Experts expect that these measures will be no more than a temporary brake on India's economic growth; in the medium and long term, the reforms are expected to have a beneficial effect. The World Bank's 2018 Doing Business Report, which assesses the business climate of 190 countries, now ranks India at number 100, up 30 places from the previous year.

What is needed to reduce poverty in India are a great many new jobs. So far, the size of some economic sectors is already reflected in their share of gross domestic product, but not yet in the number of jobs available in those sectors. Growth and prosperity are being generated primarily by the services sector, which accounts for 54 per cent of GDP. However, the services sector provides jobs for only around 30 per cent of the population.

According to government figures, only around five per cent of the working-age population has a professional qualification. There are still not enough vocational training places on offer for the up to 12 million young people entering the job market each year. Moreover, the places that are available are often of very poor quality.


Indian agriculture is mainly geared towards self-sufficiency. Due to population growth, cultivated areas are shrinking in many regions, and more and more people no longer have land of their own. Many smallholders are severely over-indebted.

Increasing soil degradation and the considerable impacts of climate change bring further potential for conflict. According to government figures, more than half of India’s land surface is affected by desertification or soil degradation. Existing model calculations for global climate change suggest increasing fluctuations in temperature and precipitation on the Indian subcontinent. If this were to happen, conflicts over scarce water and land resources could increase further in future.

The government has stated that it wants to reduce the income disparities that exist between people living in urban and in rural areas. Higher yields are to be produced in the agricultural sector by improving methods of cultivation and processing. In addition, in rural regions, new jobs are to be created in non-agricultural sectors.

Environmental degradation

People searching for recyclable goods at a rubbish dump in Puri, India

India's rapid economic development and its high consumption of raw materials are causing ever greater environmental problems. The air quality in India's conurbations is very poor indeed; the country's waterways are heavily polluted; and in many parts of the country there are no proper systems of waste disposal or wastewater management.

Although India does have modern environmental legislation, these laws are often not enforced because there is a lack of clearly defined responsibilities and financial resources as well as of competence at the local level. Whether and to what extent India manages to turn its economic growth into 'green growth' will have a considerable impact on the country's sustainable development and on the global climate.

Priority areas of German cooperation with India

German cooperation with global development partners such as India focuses less on local projects and more on programmes with a structural impact. These programmes build on India's own efforts and reform programmes. They demonstrate model solutions and qualify the participating partners to continue and expand the projects independently.

In 2017, Germany committed new funds of around 1.054 billion euros to India, as part of the two countries' development cooperation. Of this, over one billion euros was allocated to Financial cooperation and 22.5 million euros to Technical Cooperation. Most of the financial cooperation funds are being provided as a loan at near-market conditions.

The following priority areas were agreed:

  • Renewable energy and energy efficiency
  • Sustainable urban development
  • Environmental protection and resource conservation

Other German activities in India include measures being implemented under Germany's special "ONE WORLD – No Hunger" initiative, support for a Green Innovation Centre, and measures to protect the soil and to boost food and nutrition security.

Furthermore, Germany is actively supporting India in its efforts to set up a dual system of practice-oriented vocational education and training, in order to help create job opportunities for the younger population and improve the competitiveness of medium-sized businesses. Three different business sectors, each in a different location, have been selected to start off with: the automotive industry based in Aurangabad (in the State of Maharashtra); the electronics industry in Bangalore (in Karnataka); and the building trade specialising in energy-efficient construction techniques located in Bhiwadi (in Rajasthan).

Renewable energy and energy efficiency

Power lines in New Delhi, India

Energy consumption in India is increasing inexorably, yet most of the existing power generating plants are obsolete and inefficient. Moreover, they emit large amounts of greenhouse gases and other pollutants. India is already the third largest carbon dioxide emitter in the world, following China and the USA. By contrast, power supply in India – in particular in rural areas – falls well short of demand. This energy deficiency is also severely hampering economic development.

That is why Germany is supporting India in making its power supply more technically and economically efficient, and more socially and environmentally sustainable. The focus of development cooperation, therefore, is on promotion of renewable energies. At their government consultations in October 2015, Germany and India agreed to launch a solar energy partnership. Funding for the programme is one billion euros over a five-year period. Under the terms of the partnership, financial support is to go primarily to rooftop solar kits and off-grid electrification in rural areas. Specialists are to be trained up with the skills needed to fit and maintain such installations.

A sizeable loan provided by Germany is helping India to upgrade its network of transmission lines ('green energy corridors'), in order to improve the feed-in of power generated from renewable energy sources (such as solar, wind and hydropower) into the national grid.

Further important goals of development cooperation in this area are to improve energy efficiency, reduce power transmission losses, and reduce power consumption by businesses and private households.

Sustainable urban development

A worker on the construction site of the new metro in New Delhi, India

In 2016, Germany and India agreed to adopt sustainable urban development as a new priority area of their development cooperation work. Currently, around 30 per cent of India's population lives in urban areas; a quarter of this urban population are slum-dwellers, living in very poor conditions. It is estimated that, over the next 15 years, the proportion of urban dwellers will rise to more than 40 per cent of the total population. As a consequence, the Indian government has launched numerous urban development initiatives.

German development cooperation activities in urban areas are concerned with sanitation and wastewater management and with the management of household and industrial waste. Germany also provides advisory services in urban planning and governance to officials at national, state and local levels on matters such as spatial planning, social housing policies and slum modernisation. How to encourage climate-friendly mobility in urban areas is another focus of German involvement in India.

Environmental protection and resource conservation

It is a matter of national and global importance that India protect the quality of its soil, water and air, and that it conserve biodiversity on the Indian sub-continent. To date, however, the Indian government has made only limited progress towards mitigating environmental degradation and the impacts of climate change. Germany's support in this priority area focuses on two fields of action: climate change adaptation in rural areas, and conservation of natural resources and biodiversity.

The aim is to help India develop strategies for climate change adaptation and appropriate financing models. Both strategies and financing are to help ensure that farmers are able to increase their yields and continue to earn a living in the long term, even when climatic conditions change. Furthermore, the German government is also helping the Indian government to enhance the technical content of an employment programme for farm labourers, so that the projects implemented as part of the programme will have a sustained positive impact on the environment.

As regards the conservation of natural resources, the focus is on preserving India's forest, wetland, coastal and marine eco-systems, and their biological diversity, for the future. For example, Germany is supporting India's efforts to set up incentive schemes which will offer financial rewards for people to preserve their local eco-systems and utilise them in a sustainable manner.

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