India, Germany to simplify defence trade: PM Modi

India and Germany will enhance defence trade with an eye on ‘co-production and co-development,’ said Prime Minister Narendra Modi on Monday (January 12, 2026), as the two sides signed an agreement to strengthen bilateral defence industrial cooperation.

Welcoming German Chancellor Friedrich Merz to India, Mr. Modi said India will launch a ‘consultation mechanism’ on increasing collaboration with Germany in the Indo-Pacific region. In his remarks, Chancellor Merz, who is on his first visit to Asia since assuming office in May 2025, said “rough winds” are blowing in world politics and that India and Germany should increase partnership to counter global trends of instability.

“The growing cooperation in defence and security is a symbol of our mutual trust and shared vision. I express my heartfelt gratitude to Chancellor Merz for simplifying the processes related to defence trade. We will also work on a roadmap to enhance cooperation between our defence industries, which will open up new opportunities for co-development and co-production,” said Prime Minister Modi in his remarks following talks with Chancellor Merz, when several agreements, including one on ‘Strengthening the Bilateral Defence Industrial Cooperation’, were signed. Apart from defence, the list of ‘outcomes’ included several other MoUs and Joint Declarations of Intent covering areas like recruitment of skilled professionals by Germany, sports, and higher education.

Mr. Modi pointed out that Chancellor Merz’s visit coincided with India and Germany marking 25 years of strategic partnership and 75 years of diplomatic relations. He showcased India-Germany partnership in third countries such as Ghana, Cameroon and Malawi, saying that these examples show that the two sides can work to support development in the Global South. The two teams also discussed multiple regional issues, including the conflicts in Ukraine and the Gaza Strip, with PM Modi reiterating India’s condemnation of terrorism. “India has always advocated for the peaceful resolution of all problems and disputes, and supports all efforts being made in this direction,” he said, announcing that a consultation mechanism with Germany will be launched for the Indo-Pacific region.

Mr. Modi said that bilateral trade between the two countries has crossed $50 billion, “infusing new energy” into the relationship.

Chancellor Merz urged India to partner with Germany in strengthening ‘global supply chains’. “Unfortunately, we are seeing a renaissance of protectionism,” said Mr. Merz, adding that protectionism hurts India-Germany trade ties. The comments from the visiting German leader about the rise in protectionism in global affairs came against the backdrop of a decline in India-U.S. trade relations that have been hit by the imposition of punitive tariffs on India by U.S. President Donald Trump.

Chancellor Merz did not talk about President Trump in his formal remarks, but later, talking to reporters, he mentioned that Germany does not impose tariffs on other countries, an indirect reference to the punitive tariffs that the U.S. has imposed on India.

“Countries like Germany and India have been focusing on principles of free trade and open markets, and we will continue to focus on these principles in future. We are experiencing that great powers are using supply chains and raw materials as instruments of power. Together we want to oppose this,” said Chancellor Merz, indicating the India-EU Free Trade Agreement could be concluded as early as the end of this month.

A Joint statement issued after bilateral talks said that the two leaders have “reiterated their support for the conclusion of the India-EU Free Trade Agreement as a key outcome of the upcoming EU-India Summit, which will facilitate trade flows and inject further momentum into German-India economic relations.”

The two sides reiterated their commitment to fight illegal immigration and aimed for full implementation of the provisions of the Migration and Mobility Partnership Agreement (MMPA) that was signed in December 2022. The agreement is aimed at stopping “irregular migration, human trafficking and document and visa fraud”, said the Joint Statement.”

It added that a ‘Joint Declaration of Intent’ signed on Monday (January 12) on the recruitment of healthcare professionals will address Germany’s demand for the sector.