New Delhi: India and Germany on Monday agreed to resume talks towards a free trade agreement between Asia’s third-largest economy and the European Union as the two nations signed agreements on fast tracking German investments into India and concessional loans worth €1 billion for solar power generation.

A joint statement issued after German Chancellor Angela Merkel met Prime Minister Narendra Modi in New Delhi for the third inter-governmental consultations spoke of how the two sides had “underlined their strong commitment to the European Union-India Broad Based Trade and Investment Agreement and committed to bring about a resumption of the negotiations as soon as possible".

This was corroborated by foreign secretary S. Jaishankar, who told reporters that “there was an understanding that we go forward with the negotiations" after plans to resume the dialogue fell apart in August over a ban on exports of generic drugs to the European Union.

Jaishankar said EU restrictions on more than 700 generic drugs were unfair. “It’s our hope that this matter would be looked at fairly and sensibly and would hopefully not be an impediment to the free trade deal," he said.

Merkel arrived in New Delhi late Sunday for talks with Modi on Monday. She is to visit Bengaluru on Tuesday. Her visit comes as India is looking for foreign technology and aid to boost economic growth and provide jobs for the approximately 12 million people who enter the labour force every year.

While Germany holds inter-governmental consultations with China, Brazil and Israel besides India, India holds such discussions only with Germany.

Europe’s largest economy is looking to expand its presence in India to compensate for the global slowdown. Merkel’s delegation to India included the chiefs of companies such as Siemens AG, Airbus, E.ON and Thyssenkrupp.

In his comments, Modi talked about the synergies between the two economies.

India viewed Germany as a “natural partner in achieving our vision of India’s economic transformation. German strengths and India’s priorities are aligned," Modi said. “German engineering and Indian IT skills can create the next generation industry that will be more efficient, economical and environment friendly."

German cooperation and assistance in many of India’s flagship programmes such as the smart cities, Clean Ganga and waste management “have taken a concrete shape", the Prime Minister said. According to Jaishankar, the two sides discussed German participation in the Make in India programme with reference to German participation in the defence sector.

Referring to Germany’s reputation as a world leader in green and renewable energy, Modi said this “is an area where we have convergence of views, and rapidly growing cooperation... I place great value on Germany’s assistance of over €1 billion for India’s Green Energy Corridor and a new assistance package of over €1 billion for solar projects in India. We also intend to deepen research cooperation in clean and renewable energy, and energy efficiency."

The two were part of the 18 agreements signed and dovetail with efforts to bind India into a global debate that will culminate in an international climate change conference hosted by Paris in December.

Merkel said Germany “understood, Prime Minister, that climate protection needs to be embraced by the people, who also have to reap a benefit".

In a separate joint statement devoted to climate change cooperation, both sides agreed to develop and implement solutions that strengthen climate friendly urban development.

Germany welcomed India’s submission of the intended nationally determined contribution (INDCs) announced on 2 October seen as crucial to reach a new climate regime at Paris summit. Germany appreciated India’s target of 175 gigawatts of renewable energy by 2022.

The leaders launched an Indo-German Working Group on Climate Change under the Indo-German Environment Forum for regular exchanges on climate policy, the joint statement said. They also agreed to forge an Indo-German Climate and Renewable Alliance to increase cooperation in next generation solar technology, renewable energy storage, climate-friendly space cooling technologies, super-efficient appliances and buildings, zero emission passenger and freight vehicles, energy-efficient rail and water infrastructure and off shore wind.

Among the agreements concluded was one to fast-track business approvals, providing German firms with a single point of contact to help them get business proposals cleared fast. This would be operationalised by March.

Both countries decided to extend the Indo-German Science and Technology Center beyond 2017 with increased funding from 2 million euro to 4 million euro every year. This agreement supports “industrially relevant R&D projects that have potential to generate novel technologies and new intellectual property," a government statement said.

Another pact on security and counter terrorism enables armed sky marshals to be on flights between the two countries. Junior home minister Kiren Rijiju said that according to the agreement signed with his German counterpart Gunter Krings, “carriage of in-flights security officers will start within a short time frame."

As part of the security agreement the two countries have agreed to intelligence sharing on terror operatives and a meeting of the Joint Working Group on Counter Terrorism between the two countries will be held early next year. Rijiju and Krings also discussed the potential threat posed by terror outfit Islamic State or ISIS and ways to co-operate and counter it..

In the area of skill development, the joint statement welcomed the cooperation in vocational training and skills development. Modi “commended German companies in India which incorporate skills development programmes in their business strategy and thereby contribute to the development of their own enterprises" and the human capital base of India, it said.

A pact in railway modernization and expansion is expected to open up commercial opportunities for German companies in high speed rail, station re-development and rolling stock manufacturing, it said.

Yet another pact agreed to promote German as a foreign language in India while promoting modern Indian languages in Germany.

Mayank Aggarwal, Rajnish Sharma and Nikita Mehta contributed to this report.

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