India and Germany eye defence industry boost to ties
Merz said Berlin also wants a closer security partnership with New Delhi, including deeper "cooperation between our defence industries" to cut India's traditional dependence on Russia for military hardware.
Merz began his two-day India visit -- his first to Asia since taking office in May -- two weeks ahead of an EU-India summit and as India and the European bloc are working on a free trade agreement.
Both countries announced several agreements and joint declarations after the leaders' meeting with an aim to boost their $50 billion trade.
The announcements included strengthening defence industry cooperation and on semiconductors and critical minerals.
The two countries "are working together on secure, trusted, and resilient supply chains and our MoUs on these issues will strengthen our partnership", Modi said.
"Closer cooperation in security and defence shows mutual trust and shared views," Modi added.
"We will work on a roadmap to increase defence industrial cooperation, which will open new opportunities for co-development and co-production."
The meeting between the Indian and German leaders comes at a time when both are facing economic and security challenges from the world's two biggest economies, China and the United States.
Merz said Berlin was "committed to an international order in which we can live freely and securely, because the world is currently undergoing a process of realignment".
"It is increasingly characterised by great power politics and thinking in terms of spheres of influence, which is why we must join forces to weather these rough winds," he added.
"That is why we also want to move closer together in terms of security policy, such as conducting joint exercises between our air forces and navies for security in the Indo-Pacific."
Recent actions and statements by US President Donald Trump including arbitrary trade tariffs have played a key role in upending global alliances and regional geopolitics, with New Delhi still negotiating a trade deal with Washington.
'Strategic importance'
"It is of particular strategic importance that we deepen cooperation between our defence industries. This strengthens both sides and also helps to make India less dependent on Russia, for example," said Merz.
New Delhi, which has relied on Moscow for decades for its key military hardware, has tried to cut its dependence on Russia in recent years by diversifying imports and pushing its own domestic manufacturing base.
India today counts France, Israel and the United States as its key military suppliers besides Russia.
Berlin and New Delhi have also been negotiating a potential deal for Germany's Thyssenkrupp Marine Systems to build six submarines for the Indian Navy in partnership with Indian state-run Mazagon Dock Shipbuilders.
While still being negotiated, that deal would allow India to replace its ageing fleet of Russian-built submarines and likely include technology transfer provisions to help its domestic defence industry.
In defence, the two sides are also exploring other areas of convergence as New Delhi pumps billions of dollars to upgrade its naval fleet and air force in the next few years.
Merz will wrap up his visit with a trip to the southern technology hub of Bengaluru on Tuesday.