India An important partner in international cooperation

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Current situation

According to the 2021 Global Multidimensional Poverty Index (External link) (MPI), the percentage of the population in India living below the poverty line fell from 55 per cent in 2006 to 28 per cent in 2016. 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 270 million Indians during the aforementioned period.

However, although the number of people who count as middle or upper class is growing, there are still more than 175 million people who must get by on the equivalent of less than 1.90 US dollars a day. The COVID-19 pandemic and its socio-economic consequences have caused a renewed increase in unemployment and poverty within marginalised groups.

Reducing poverty and social inequality along with protecting the climate and natural resources are the biggest challenges for the country’s politicians, and for its economy and for Indian society.

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India is one of the BMZ’s “global partners”. A substantial portfolio of joint development cooperation activities solidly rooted in mutual trust and respect, and embedded in a challenging dialogue between equal partners, is being successfully carried out.

With the Partnership for Green and Sustainable Development 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 consistently aligned with the sustainability agenda of the United Nations.

Realising climate and sustainability goals is at the heart of this cooperation. The Partnership is intended to strengthen bilateral cooperation between the two countries in line with the envisaged goals and also be a vehicle for expanding cooperation with multilateral players, the scientific community, the private sector and civil society. Germany is planning to invest at least ten billion euros for this in the period up to 2030.

The Development Ministry (BMZ) has been the lead German ministry in driving this umbrella initiative forward and is supporting India with more than one billion euros a year. Over 90 per cent of the BMZ projects in India involve helping to save greenhouse gas emissions or supporting adaptation to climate change.

In this connection, the German government is currently engaged, together with the US, in negotiations for a G7-India Just Energy Transition Partnership (JETP). The aim is for this Partnership to support India in accelerating the expansion of renewable energy, improving energy efficiency and achieving a just coal phase-out.

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 and the participating partners are able afterwards to carry on with the projects on their own and extend them.

At the government negotiations in November 2021, Germany made a commitment to India for funding worth some 1.3 billion euros. Most of this amount, namely 1.2 billion euros, is intended for Financial Cooperation. Most of this funding will be provided as loans from KfW Development Bank at preferential 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
• Environmental and resource protection (with a focus on agro-ecology)

The COVID-19 pandemic has had major impacts on India’s economy and its public health system. The BMZ has been supporting India’s efforts to overcome the crisis with numerous significant measures. Additional funding has been provided in particular for social protection and food supplies (that alone has reached at least 320 million people in need of support), for procuring medical equipment to improve the oxygen supply situation and increase testing capacities, and for training medical personnel, especially in the poor and structurally weak northern regions of India. In addition, measures for developing medicinal cooling chains (refrigerators and freezers) have been implemented with a view to supporting the distribution of COVID-19 vaccines.