Germany Invites India to G-7 in Bid to Isolate Russia’s Putin

(Bloomberg) --

German Chancellor Olaf Scholz invited Indian Prime Minister Narendra Modi to a Group of Seven leaders' summit next month as a special guest, part of an effort to forge a broader international alliance against Russia.

Germany -- which currently holds the rotating G-7 presidency -- will also welcome the leaders of Indonesia, South Africa and Senegal to the gathering in the Bavarian Alps June 26 to June 28, Scholz's chief spokesman, Steffen Hebestreit, said Monday at a regular news conference in Berlin, confirming a Bloomberg report published Sunday.

Scholz hosted Modi for talks in Berlin Monday and they presided over a joint German-Indian cabinet meeting before signing a declaration on cooperation in “Green and Sustainable Development” and making statements to reporters.

“Hopefully we'll very soon be able to welcome you to Germany again,” Scholz said. “We are ready to continue close cooperation on global issues with India, and -- this is the key -- to expand it,” he added. Modi did not immediately confirm he would attend the G-7, and did not mention the invitation in his statement.

The two leaders, who did not take questions, also announced that Germany had pledged as much as 10 billion euros ($10.5 billion) in aid to help India achieve its sustainable development goals and promote German-Indian research and development.

Despite concerns over Modi's reluctance to condemn Russia's invasion of Ukraine and a recent jump in India's fossil-fuel imports from Russia, Scholz decided the G-7 should court India, according to people familiar with the matter.

Given the nation's growing population and long democratic tradition, Germany sees the country as a potentially valuable partner in efforts to isolate Russia, said the people, who asked not to be identified because the discussions are confidential.

The war in Ukraine “underlines the importance of a rules-based world order to all of us once again,” Scholz told reporters. “We agree that borders must not be moved by force and that the inviolability of borders and the integrity and sovereignty of nations must not be questioned.”

Scholz and Modi also discussed how to further ease immigration rules for skilled workers from India to tackle labor shortages in Europe's largest economy, and how to accelerate technology transfer to India in the push to reduce climate-damaging carbon emissions.

In the medium term, Germany also wants European defense companies to offer India an alternative to Russian weapons deliveries.

German business is skeptical about dealmaking with India. The country's neutral stance on Russia complicates Scholz's efforts to strengthen economic and political ties, said Wolfgang Niedermark, board member of Germany's powerful BDI industry association.

“The West must reckon that India will not align itself with any camp in an increasingly bipolar world order,” he said Monday in an emailed statement, adding that the EU and Germany should make offers to India without betraying their own interests.

Germany and India should both reduce dependencies on Russia. “This applies to European energy imports as well as to Russian-Indian military cooperation,” Niedermark said.

Following Russia's invasion of Ukraine, Scholz is looking to deepen connections with other democratic countries. That's why the 63-year-old Social Democrat picked Japan for his first trip to Asia as chancellor last week, instead of following recent tradition and traveling to China with a business delegation.

India was among the more than 50 countries that abstained from a United Nations vote to suspend Russia from the UN Human Rights Council in April. It hasn't imposed sanctions on Moscow over the war in Ukraine and is instead is boosting energy imports. India is also a significant buyer of Russian weapons.

Germany and its G-7 allies, including the U.S., U.K., France, Italy, Japan and Canada, have imposed sweeping sanctions on Russia, but few other countries have joined those efforts –- and many governments in Latin America, Africa, Asia and the Middle East remain reluctant to do so.

The seven governments have been coordinating efforts to engage key countries, and India is high on that list. The EU last month relaunched trade negotiations in the hope of providing it with a viable alternative to diversify away from Russia.