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India
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Situation and cooperation
India has one of the world’s fastest growing economies. In some areas, such as information technology, pharmaceuticals, space and biotechnology, India is now a global leader. Yet despite the positive economic development of the last 15 years, India is still the country with the largest number of poor people in the world. More than 80 per cent of the population lives on less than 2.50 dollars a day, and almost 500 million people are classed as living in extreme poverty – indeed, one-third of the world's extreme poor live in India. Around one-fifth of all Indians are undernourished, and more than a third cannot read and write. The UNDP Human Development Index ranks India only 110th out of the 169 countries listed (HDI 2010).
In view of its strong economic growth and large population, India plays a pivotal role in the attainment of the Millennium Development Goals. Over the last 20 years, the rate of population growth has slowed dramatically, but India's population is still growing by about 15 million every year.
The Indian government has set itself ambitious development targets in its current five-year plan (2007-2012). They are geared to the goals set out in the Millennium Declaration. The slogan of the plan is "inclusive growth". The aim is not only to achieve annual GDP growth of more than 10 per cent by 2012 but also to ensure that far more people benefit from the country's positive economic development.
On the domestic front, the ethnically diverse country sees frequent conflicts between different ethnic groups and federal states. In the field of foreign policy, India has for decades been involved in conflicts with its neighbours, especially Pakistan and China. Although there has been considerable progress towards the normalisation of relationships in recent years, the South Asia region remains politically unstable, as recent developments in India’s neighbours, Pakistan and Sri Lanka, show.
The economic and social disparities within society, the disadvantaging of women, and development gaps between urban and rural areas as well as between individual states are key problems facing India. The human rights situation remains unsatisfactory in many areas. Bureaucracy, a lack of transparency, corruption and bad governance in some states continue to pose serious obstacles to development.
Agriculture – mainly geared towards self-sufficiency
Around two-thirds of the population live in rural areas and have so far derived little or no benefit from the economic growth achieved in recent years. More than 60 per cent of India's workforce is dependent on agriculture, but this accounts for a steadily decreasing share of gross domestic product – currently just 15 per cent. Indian agriculture is mainly geared towards self-sufficiency. In many regions, cultivated areas are shrinking, and more and more people are landless and no longer have access to farmland of their own.
Increasing soil degradation and climate change also harbour the potential for conflict. According to the Food and Agriculture Organization of the United Nations, one-third of India's land surface and 60 per cent of its farmland are already affected by soil erosion and desertification. Climate change is causing more serious fluctuations in temperature and precipitation. Droughts and floods will increase and, as a result, so will conflicts over scarce resources, i.e. water and land.
Under the five-year plan, the agricultural sector is set to grow by an average of 4 per cent per year, with efficiency increases to be achieved nationwide through improvements in cultivation and processing methods. In addition, new jobs are to be created in non-agricultural sectors in India’s rural regions, reducing urban-rural regional disparities in income, and universal access to education and medical care is to be provided.
The economy – on track for more growth
Since the start of economic liberalisation in 1990, economic growth has remained high and displays long-term stability. The export sector has grown by about 20 per cent per annum; in 2006 this figure was as high as 36 per cent. However, India has been affected by the global economic and financial crisis, albeit less severely than other comparable countries. The growth rate has weakened significantly, but has already recovered to around 7 per cent (2008/2009 financial year).
India is now a sought-after partner for the industrialised nations. However, the sub-continent's share of world trade is still very low. Nevertheless, the government recognises the opportunities that globalisation offers to many Indian companies. Increased encouragement is therefore to be given to external economic relations.
The environment – regional and global impacts
Rapid economic development and high consumption of raw materials are causing increasing environmental problems. Action is needed to combat the regional and global impacts. India has modern environmental legislation in place, but lacks the financial resources required to implement it, as well as clearly defined responsibilities and local expertise. The extent to which India can achieve growth in an energy-efficient and environmentally compatible manner will be crucially important both for India’s sustainable development and the global climate.
Development by its own efforts
India’s prospects of continuing its positive development are good. The country is making significant efforts of its own to drive forward its development. The financial contributions from bilateral and multilateral donors are minimal compared with India’s own investment, amounting to only around 0.2 per cent of Indian GDP. Know-how transfer is more important than financial contributions, for it enables development cooperation to exert a very substantial leveraging effect and thus achieve a great deal with relatively little input. India itself is now engaged in third countries and is increasingly becoming a donor rather than a recipient country.
Priority areas of German cooperation with India
Indo-German development cooperation is based on mutual trust and has been highly successful. Its aim is to make a contribution, via its joint programmes and initiatives, to poverty reduction in India, the solution of global problems, and the attainment of the Millennium Development Goals. To that end, the German government supports the Indian government's reform efforts.
Indo-German development cooperation has developed over the years from pure investment and technology transfer to a high-quality dialogue of equals. Both countries aim to work together on global structural policy.
The policies of the Indian government are largely in line with the German government's development policy vision. The goals of bilateral development cooperation also fit in well with the Indian government's current five-year plan.
In 2011, the German government pledged new funds totalling 50.5 million euros from the federal budget for development cooperation with India.
The following priorities have been agreed with the Indian government:
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Environment
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Energy
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Sustainable economic development
Environment
India faces massive challenges relating to urban and industrial environmental protection and the management of natural resources. The long-term and sustainable protection of soil, water resources and air and the conservation of biodiversity are issues of global significance. India and Germany are working together to achieve internationally agreed environmental goals.
In the field of natural resources management, positive experience has been gained in the past with water catchment area management programmes. In the future, this experience will be transferred to other projects being pursued by the government and other donors.
In the field of rural water supply and sanitation, the focus is on the local self-management of systems and their sustainable operation. Cooperation concentrates in particular on environmental protection in urban and industrial contexts. For example, the implementation of environmental legislation is to be improved. Attempts are also being made to solve the massive problems of urban conurbations relating to issues such as sanitation and waste management, control of air pollution, industrial environmental management and the financing of infrastructure measures.
A further challenge facing India is to develop strategies for adaptation to climate change. German development cooperation will support India in this context.
Germany is appreciated as an experienced and competent partner in the field of environmental protection. German environmental technology and the experience gained in Germany are very important for our Indian partners.
Energy
India's energy supply is inadequate to meet the demand arising from dynamic economic growth. Energy consumption is increasing unchecked. Some of the power generating plants are obsolete and the state utilities are operating at a loss, thus imposing a further burden on the national budget. Power stations are fired by low-grade coal and achieve a very poor level of efficiency. Under-supply of domestic electricity remains a serious problem: more than 40 per cent of Indian households – especially in rural regions – are not connected to an electricity supply.
India is already one of the largest carbon dioxide emitters in the world and is playing an increasingly important role in the international oil market. A stable, environmentally sound energy supply is a basic precondition for sustainable economic growth in India. The extent to which India pursues a climate-compatible, energy-efficient growth policy over the long term will be crucial for global climate protection as well.
Germany and India therefore set up a joint energy forum in 2006. The Indo-German Energy Forum is a basis for a wide-ranging exchange of information and intensive cooperation between the two countries on issues such as energy efficiency, renewables, emissions trading and the Clean Development Mechanism (CDM).
Improving efficiency in the generation, transmission and consumption of power is an important objective of Indo-German development cooperation. The use of renewables (hydropower, wind energy, solar energy and biomass) is seen as particularly important. Support is also provided for programmes that help reform the structures of the Indian energy sector.
Sustainable economic development
Most of the measures to promote sustainable economic development in India concentrate on the financial sector. The focus is on programmes to support micro credit, the reform of rural cooperative banks, and the development of financial and other promotional instruments for small and medium-sized enterprises.
The development of a social security system for the poor also forms part of cooperation measures. The priority is to find solutions that can be applied on a broad basis. It is particularly important, in this context, that measures should reach poor, disadvantaged groups such as untouchables and indigenous peoples.
Information
Publications
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Strategy for Development Cooperation with Global Development Partners
(PDF 543 KB, accessible) -
"Pro-Poor Growth" – a focal point of development policy
Special 146
(PDF 807 KB) -
Climate Change and Development: Setting development policy priorities
(PDF 611 KB, accessible) -
Sustainable Energy for Development
Strategies 154
(PDF 549 KB, accessible) -
Combating Desertification
Leaflet
(PDF 1 MB, accessible) -
Strengthening Social Protection Systems in Developing Countries and Emerging Economies
(PDF 388 KB, accessible)
