Motorbike Taxis in Delhi

India An important partner in international cooperation

India, with its more than 1.4 billion inhabitants, is now the most populous country on Earth, and the world's fifth-largest economy. It is among the countries with the highest greenhouse gas emissions. India thus has a key role to play in finding solutions to global development issues. The global Sustainable Development Goals of the 2030 Agenda and the goals of the Paris Agreement can only be achieved by working in partnership with India.

In order to expand their cooperation on these global issues, Germany and India concluded a Green and Sustainable Development Partnership in May 2022. The Federal Ministry for Economic Cooperation and Development (BMZ) had a major role in shaping this Partnership, which guides its entire development cooperation with India.

India is a country of extreme contrasts. On the one hand there is a booming digital economy, an ambitious space programme, a growing renewable energy sector and forward-looking models for climate-smart smallholder agroecology. On the other hand, India has the world's highest number of people living in extreme poverty, antiquated industrial plants, the third-highest emissions of greenhouse gases after China and the US, and a very resource-intensive industrialised agricultural sector.


Challenges

Straight to
Informal housing settlement in Kolkata, India

According to the 2022 Global Multidimensional Poverty Index (External link) (MPI), the incidence of poverty in India fell from 55 per cent in 2005 to about 16 per cent in 2021. The MPI is published jointly by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI). It measures poverty based on various indicators relating to education, health and living standards. According to the MPI, there was a strong improvement in the living conditions of more than 400 million Indians during the aforementioned period.

However, although the number of people who count as middle or upper class is growing, there were still approximately 180 million people in 2022 who had to get by on the equivalent of less than 2.15 US dollars a day. The COVID-19 pandemic and its consequences have caused a renewed increase in unemployment and poverty, especially among disadvantaged groups.

Reducing poverty and social inequality along with dealing with the consequences of climate change and protecting natural resources are the biggest challenges for the country's policymakers, economy and society.

German development cooperation with India

India’s Prime Minister Narendra Modi and Federal Chancellor Olaf Scholz pictured on 2 May 2022 after signing the joint declaration between the Federal Republic of Germany and the Republic of India for a Partnership for Green and Sustainable Development.
India’s Prime Minister Narendra Modi and Federal Chancellor Olaf Scholz pictured on 2 May 2022 after signing the joint declaration between the Federal Republic of Germany and the Republic of India for a Partnership for Green and Sustainable Development.

India is one of the BMZ's “global partners”. The two countries have a substantial portfolio of joint development cooperation activities based on strong mutual trust that they are carrying out with great success. This cooperation is embedded in a challenging dialogue between equal partners.

With the Green and Sustainable Development Partnership that was signed by Prime Minister Narendra Modi and Federal Chancellor Olaf Scholz on 2 May 2022, Indo-German cooperation has been placed within a broader framework and has been systematically aligned with the United Nations 2030 Agenda and the Paris Agreement.

The Partnership is intended to strengthen bilateral cooperation in line with the climate goals and the Sustainable Development Goals, and to help broaden cooperation with multilateral players, academia, the private sector and civil society. Germany is planning to provide at least ten billion euros for this in the period up to 2030.

The BMZ has been the lead German ministry in driving this partnership forward together with the German Environment Ministry and is supporting India with more than one billion euros a year. Over 90 per cent of all BMZ projects in India contribute towards climate change mitigation or adaptation and resilience.

The German government wants to assist India, in particular, in accelerating the expansion of renewable energy, improving energy efficiency and achieving a just coal phase-out.

Support for India's reform efforts

For its cooperation with global development partners like India, the focus of the BMZ is on programmes with a structural impact. These programmes and projects build on India's own efforts and reform programmes; they are carried out, wherever possible, in cooperation with the EU or other EU member states, the G7 or multilateral partners. They provide model solutions, help to build capacity, and thus enable the participating partners to carry on with the projects on their own and expand them.

At the government negotiations in November 2022, Germany made a commitment to India for funding worth about one billion euros. Most of this amount, namely 0.9 billion euros, is intended for Financial Cooperation. Most of this funding will be provided as loans from KfW Development Bank at reduced rates, to be paid back with interest by India.

The following priority areas have been agreed by the two governments for their programme of collaboration:

  • Renewable energy, energy efficiency
  • Sustainable urban development and climate-friendly mobility
  • Climate resilience, agroecology and conservation of natural resources
A solar engineer checks a solar-powered street lamp.

Priority area Renewable energy and energy efficiency Fostering the energy transition in India Internal link

India has announced the ambitious goal of significantly expanding the use of renewable energy and generating half of its power from renewable sources by 2030. Germany is supporting India in making its power supply more technically and economically efficient, and more socially and environmentally sustainable.

Commuters in Mumbai's subway, India

Priority area Sustainable urban development Increasing quality of life in cities, promoting climate-friendly mobility Internal link

According to estimates, India's urban population will grow by about 400 million by 2050. But the cities are already unable to provide enough additional infrastructure to keep pace with these growing numbers. That is why Germany is supporting programmes for sustainable urban development and climate-friendly urban mobility that the Indian government is carrying out nationwide.

Mangrove forest in India

Priority area Climate resilience, agroecology and conservation of natural resources Preserving ecosystem services, ensuring food security, adapting to climate change Internal link

Germany's development cooperation with India focuses on mapping and analysing environmental change and climate risks, developing adaptation strategies and local development plans, devising innovative financing and protection models, and fighting poverty, hunger and inequality through agroecology.

Current situation

Political situation
Construction workers at a building site in the Indian capital New Delhi
Social situation
Informal housing settlement in Kolkata, India
Economic situation
Environmental situation
With scarce and erratic rainfall, and frequent droughts in the region, a pastoralist community of Rajasthan, Raikas follow the practice of moving their flocks and herds in search of water and forage.

As at: 06/06/2023