Supply Chains & Trade

Beyond $50 Billion: Trade, FTA, and the Architecture of Resilience

Bilateral trade between India and Germany exceeded $50 billion in 2024, accounting for over 25% of India’s total trade with the European Union. The EU-India Free Trade Agreement, concluded in January 2026 after years of negotiation, is expected to improve competitiveness for Indian exporters in textiles, pharmaceuticals, engineering goods, electronics, and services — while offering German firms enhanced access to India’s expanding market.

For Germany, the FTA reinforces its role as India’s principal EU trade partner and investment conduit. With the next India-Germany Inter-Governmental Consultations scheduled for later in 2026, bilateral initiatives and the FTA are converging into a coherent market-opening strategy. The India-Middle East-Europe Economic Corridor (IMEC), supported by both countries, promises to reduce trade costs and strengthen logistics connectivity.

The “China-plus-one” strategy is no longer theoretical — German companies are actively diversifying manufacturing and sourcing into India. But diversification is slower, costlier, and more complex than boardroom presentations suggest. GIF’s research tracks what is actually happening at the company level, where the frictions lie, and what policy interventions would accelerate the shift.

Research Agenda

• Question 1 How will the EU-India FTA change competitive dynamics for German companies in India — which sectors will see the largest tariff reductions, regulatory simplification, and market access improvements?
• Question 2 What does “China-plus-one” mean in practice for German manufacturers — which companies have successfully diversified into India, what did it cost, and what lessons can be generalised?
• Question 3 How can IMEC reduce trade costs and improve supply chain resilience for India-Germany commerce — and what infrastructure investments are needed to make it operationally significant by 2030?
• Question 4 What are the most significant non-tariff barriers to bilateral trade, and how should the IGC process address them in 2026–27?

Tagged Publications

• White Paper “EU-India FTA Year One: Sector-by-Sector Impact Assessment for German Business”
• Policy Brief “China-Plus-One in Practice: Lessons from German Manufacturers Who Diversified into India”
• Commentary “IMEC: Corridor of Ambition or Infrastructure Mirage?”
• Data Point Dashboard indicators: monthly bilateral trade volume by sector, German FDI into India (annual, by sector), FTA implementation milestones

Linked Events

• Policy Dialogue “EU-India FTA: Year One — Opportunities and Friction Points for German Exporters” — with trade policy officials, DIHK/IGCC representatives, and company export managers
• Roundtable Panel “Building Resilient Supply Chains: The Mittelstand’s India Strategy” — featuring German logistics and manufacturing companies with active India supply chains

Research Fellow