India and Germany moved to significantly deepen their strategic and economic partnership as Prime Minister Narendra Modi and German Chancellor Friedrich Merz oversaw the signing of two key agreements covering critical minerals, semiconductors and defence industrial cooperation. The agreements mark a substantial step forward in bilateral relations between the two democracies.

Key Agreements Signed

Two major agreements were formalized during the joint statement event, demonstrating both countries' commitment to enhanced cooperation:

Prime Minister Modi emphasized that the expanding cooperation in defence and security reflected the "mutual trust and shared vision" between the two democracies. He thanked Chancellor Merz for simplifying defence trade procedures, which is expected to facilitate smoother bilateral defence transactions.

Renewable Energy and Technology Cooperation

Both leaders highlighted shared priorities in renewable energy sector development. Modi announced the creation of an India-Germany Centre of Excellence to further boost cooperation in renewable energy initiatives. This center will serve as a focal point for joint research and development activities between the two nations.

Chancellor Merz, who is in India for a two-day visit, emphasized that cooperation between India and Germany was vital in a world facing growing geopolitical and economic uncertainty, particularly from major global economies.

Bilateral Trade Milestone

The partnership has achieved significant economic momentum, with key trade statistics highlighting the relationship's strength:

Modi noted that "growing trade and investment ties have given new energy to our strategic partnership," emphasizing the economic foundation supporting broader cooperation.

Diplomatic Milestones and Cultural Exchange

The meeting occurs at a symbolic moment for bilateral relations. Modi highlighted that India and Germany will mark 75 years of diplomatic relations in 2026, while having completed 25 years of strategic partnership last year. These milestones reflect the depth of trust and ambition between the two sides.

During the visit, both leaders participated in cultural activities, attending a traditional kite festival and visiting the Sabarmati Ashram, where Mahatma Gandhi lived during India's freedom struggle. Modi hosted Merz in Ahmedabad, Gujarat, before the German leader's planned travel to Bengaluru, India's technology hub.

Strategic Context

Merz's India visit represents his first trip to Asia since taking office and comes two weeks ahead of a planned EU-India summit. The visit occurs as negotiations continue on a free trade agreement between India and the European Union. A German government spokesman noted that Merz choosing India for his first Asian trip "demonstrates how India, the world's largest democracy, is an important strategic partner for Germany."

Germany achieved remarkable renewable energy expansion in 2025, installing nearly 21 GW of new capacity to reach approximately 210 GW total, marking an 11% year-over-year increase. The preliminary figures from Bundesnetzagentur, Germany's Federal Network Agency, highlight the country's continued commitment to clean energy transition, with solar and wind power driving most of the growth.

Solar Power Dominates Capacity Additions

Solar installations led Germany's renewable energy expansion, contributing 16.4 GW of new capacity in 2025. While this represented strong growth, it fell slightly below the record installations achieved in 2024. The solar deployment showed a notable shift in installation patterns compared to the previous year.

Bavaria emerged as the leading state for solar installations, adding 4.5 GW in 2025. The country's total solar capacity now stands at 117 GW, though significant work remains to achieve the national target of 215 GW by 2030, requiring an average of 19.6 GW of new solar capacity annually.

A notable trend emerged in plug-in balcony solar installations, with approximately 430,000 new units installed in 2025. These installations accounted for 3.20% (0.5 GW) of newly installed solar capacity, up from 2.50% (0.4 GW) in 2024.

Wind Energy Shows Strong Performance

Onshore wind capacity demonstrated significant improvement, increasing by 4.6 GW in 2025 compared to 2.6 GW added in 2024. Westphalia led the onshore wind installations with 1.3 GW, contributing to the total onshore wind capacity of 68.1 GW by year-end.

Offshore wind capacity increased by 0.3 GW in 2025, slightly less than the previous year. The total installed offshore wind capacity across the North Sea and Baltic Sea now stands at 9.5 GW. Planning approvals for nearly 20.8 GW of onshore wind capacity indicate increased commissioning activity in coming years.

Biomass and Future Outlook

Biomass capacity additions totaled nearly 55 MW in 2025, bringing total installed biomass capacity to approximately 9.2 GW. While some projects were decommissioned during the year, new installations offset their capacity.

Bundesnetzagentur recently invited bids for 3.44 GW of onshore wind projects as part of the total 10 GW onshore wind capacity planned for 2026, distributed across four scheduled bidding rounds. The agency also awarded a combined 1.09 GW of capacity in recent auctions, with 813 MW allocated to biomass facilities and 281 MW to rooftop and noise-barrier solar projects.

Market Leadership and Progress

Klaus Müller, President of Bundesnetzagentur, emphasized solar power's leading role in capacity additions, stating that the total solar capacity of 117 GW demonstrates good progress toward expansion targets. The renewable energy sector's 11% year-over-year growth reflects Germany's sustained momentum in clean energy deployment across multiple technologies.

The country's renewable energy portfolio now encompasses diverse technologies, with solar power representing the largest segment at 117 GW, followed by onshore wind at 68.1 GW, offshore wind at 9.5 GW, and biomass at 9.2 GW.

Source: https://www.mercomindia.com/germany-adds-16-4-gw-of-solar-capacity-in-2025