Prime Minister Narendra Modi and German Chancellor Angela Merkel. (PTI Photo)
Prime Minister Narendra Modi on Monday hailed Germany as a "natural partner" of India after signing deals with Chancellor Angela Merkel on clean energy and speeding up the European powerhouse's investment in Asia's third largest economy.
Briefly leaving behind a refugee crisis in Europe, Ms Merkel and her ministers signed 18 deals with India, including on renewable energy and fast-tracking approvals for German companies to operate in the country.
"We see Germany as a natural partner in achieving our vision of India's economic transformation. German strengths and India's priorities are aligned," PM Modi said after a three-hour meeting with Ms Merkel, who arrived in the capital on Sunday.
Foreign companies have long pointed to taxation, corruption and other obstacles to doing business in India. But many have welcomed PM Modi's efforts to make it a faster and more reliable place to invest.
The two countries signed agreements worth $2.25 billion on German investment in developing India's clean energy corridors and solar energy industry, ahead of the crucial UN climate change talks to be held in Paris in December.
"Energy cooperation is very much in the foreground, particularly exploring and developing rural areas is very much on our agenda," Ms Merkel said, standing alongside PM Modi.
India, the world's third largest emitter of greenhouse gases, has pledged to generate 40% of its electricity from renewable sources within 15 years as part of its action plan for the upcoming talks in Paris.
Fast-track deal
Germany is already India's most important trading partner in Europe. Trade was worth nearly $17.9 billion in 2014 -- mostly chemicals, machine tools, electrical goods and textiles.
But Ms Merkel's Foreign Minister Frank-Walter Steinmeier said German companies were concerned about "too much red tape, infrastructure hurdles, corruption, lack of skilled labour (and) tax disputes" in India.
Ms Merkel welcomed the fast-track approval agreement signed on Monday, which will ensure German companies have a single point of contact with the Indian government, to avoid the layers of bureaucracy.
The leaders also discussed resuming stalled India-EU Free Trade Agreement negotiations -- a market-opening pact to boost bilateral commerce on which talks began in 2007.
"There was an understanding that we would go forward with the negotiations," Indian Foreign Secretary S Jaishankar told reporters.
A stumbling block to talks progressing was the EU's "unwarranted" decision to suspend from sale about 700 Indian drugs, he said, adding that India wanted the EU to look at the issue "fairly and sensibly".
Among the deals signed on Monday, Germany agreed to lend India some of the vocational education expertise that has turned it into an engineering giant, with skilled workers crucial for PM Modi's "Make in India" campaign.
Ms Merkel and her delegation of cabinet ministers and German business leaders will resume talks with Modi on Tuesday when they attend a business forum in the southern technology hub of Bangalore. The German leader leaves later the same day.