Chapter 1

Geography Of India
National name: Bharat
Principal languages: Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi
7%, Tamil 5.9%, Urdu 5%, Gujarati 4.5%, Kannada 3.7%, Malayalam
3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other
5.9% note: English enjoys the status of subsidiary official language but is
the most important language for national, political, and commercial
communication; Hindi is the most widely spoken language and primary
tongue of 41% of the people; there are 14 other official languages:
Bengali, Telugu, Marathi, Tamil, Urdu, Gujarati, Malayalam, Kannada,
Oriya, Punjabi, Assamese, Kashmiri, Sindhi, and Sanskrit; Hindustani is
a popular variant of Hindi/Urdu spoken widely throughout northern India
but is not an official language (2001 census)
Ethnicity/race: Indo-Aryan 72%, Dravidian 25%, Mongoloid and other
3% (2000)
Religions: Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%,
other 1.8%, unspecified 0.1% (2001)
National Holiday: Republic Day, January 26
Literacy rate: 62.8% (2006 est.)
Economic summary: GDP/PPP (2013 est.): $4.99 trillion; per capita
$4,000. Real
growth
rate: 3.2%. Inflation: 9.6%. Unemployment: 8.8%. Arable
land: 47.87%. Agriculture: rice, wheat, oilseed, cotton, jute, tea,
sugarcane, potatoes; cattle, water buffalo, sheep, goats, poultry;
fish. Labor force: 487.6 million; agriculture 49%, services 31%, industry
20% (2013). Industries: textiles, chemicals, food processing, steel,
transportation equipment, cement, mining, petroleum, machinery,
software, pharmaceuticals. Natural resources: coal (fourth-largest
reserves in the world), iron ore, manganese, mica, bauxite, titanium ore,
chromite, natural gas, diamonds, petroleum, limestone, arable
land. Exports: $313.2 billion (2013 est.): petroleum products, precious
stones,
machinery,
iron
and
steel,
chemicals,
vehicles,
1

apparel. Imports: $467.5 billion (2013 est.): CRUDE OIL , machinery,

gems, fertilizer, chemicals. Major TRADING partners: U.S., UAE,
China, Saudi Arabia, Switzerland, Singapore, Hong Kong (2012)
Member of Commonwealth of Nations
Communications: Telephones: main lines in use: 31.08 million (2012);
mobile cellular: 893.862 million (2013). Broadcast media: Doordarshan,
India's public TV network, operates about 20 national, regional, and local
services; large number of privately-owned TV stations are distributed by
cable and satellite service providers; government controls AM radio with
All India Radio operating domestic and external networks; news
broadcasts via radio are limited to the All India Radio Network; since
2000, privately-owned FM stations are permitted but limited to
broadcasting entertainment and educational content (2007). Internet
hosts: 6.746 million (2012). Internet users: 61.338 million (2009).
Transportation: Railways: total: 63,974 km (18,927 km electrified)
(2010). Roadways: total: 4,689,842 km (2013). Waterways: 14,500 km;
note: 5,200 km on major rivers and 485 km on canals suitable for
mechanized vessels (2012). Ports and harbors: Chennai, Jawaharal
Nehru, Kandla, Kolkata (Calcutta), Mumbai (Bombay), Sikka,
Vishakhapatnam. Airports: 346 (2013).

Chapter 2

Geography of Germany
Geography of Germany
National name: Bundesrepublik Deutschland
Current government officials
Language: German
Ethnicity/race: German 91.5%, Turkish 2.4%, Italian 0.7%, Greek 0.4%,
Polish 0.4%, other 4.6%
Religions: Protestant 34%, Roman Catholic 34%, Islam 4%, Unaffiliated
or other 28%
National Holiday: Unity Day, October 3
Literacy rate: 99% (2003 est.)
Economic summary GDP/PPP (2013 est.): $3.227 trillion; per capita
$39,500. Real growth
rate: 0.5%. Inflation: 1.6%. Unemployment: 6%. Arable
land: 33.25%. Agriculture: potatoes, wheat, barley, sugar beets, fruit,
cabbages; cattle, pigs, poultry. Labor force: 44.2 million; industry
24.6%, agriculture 1.6%, services 73.8% (2011). Industries: among the
world's largest and most technologically advanced producers of iron,
steel, coal, cement, chemicals, machinery, vehicles, machine tools,
electronics, food and beverages, shipbuilding, textiles. Natural
resources: iron ore, coal, potash, timber, lignite, uranium, copper,
natural gas, salt, nickel, arable land. Exports: $1.493 trillion (2013 est.):
machinery, vehicles, chemicals, metals and manufactures, foodstuffs,
textiles. Imports: $1.233 trillion (2013 est.): machinery, vehicles,
chemicals, foodstuffs, textiles, metals. Major TRADING
partners: France, U.S., UK, Italy, Netherlands, Belgium, Austria, Spain,
China, Switzerland, Poland (2013).
Communications: Telephones: main lines in use: 50.7 million (2012);
mobile cellular: 107.7 million (2012). Broadcast media: a mixture of
publicly-operated and privately-owned TV and radio stations; national
and regional public broadcasters compete with nearly 400 privately3

owned national and regional TV stations; more than 90% of households

have cable or satellite TV; hundreds of radio stations including multiple
national radio networks, regional radio networks, and a large number of
local radio stations (2008) Internet hosts: 20.043 million
(2012). Internet users: 65.125 million (2009).
Transportation: Railways: total: 41,981 km (2012). Highways: total:
644,480 km (2012). Waterways: 7,467 km (2012); note: Rhine River
carries most goods; Main-Danube Canal links North Sea and Black
Sea. Ports and harbors: Bremen, Bremerhaven, Brunsbuttel, Duisburg,
Frankfurt, Hamburg, Karlsruhe, Mainz, Rostock,
Wilhemshaven. Airports: 539 (2013).

CHAPTER 3

ECONOMY OF INDIA
The economy of India is the tenth-largest in the world by nominal
GDP and

the third-largest by

purchasing

power

parity (PPP). The

country is one of the G-20 major economies, a member of BRICS and a

developing economy that is among the top 20 global traders according
to the WTO. India was the 19th-largest merchandise and the 6th largest
services exporter in the world in 2013; it imported a total of $616.7 billion
worth of merchandise and services in 2013, as the 12th-largest
merchandise and 7th largest services importer.[29] India's economic
growth slowed to 4.7% for the 201314 fiscal years, in contrast to higher
economic growth rates in 2000s. [30] IMF projects India's GDP to grow at
5.4% over 2014-15. Agriculture sector is the largest employer in India's
economy but contributes a declining share of its GDP (13.7% in 201213). Its manufacturing industry has held a constant share of its economic
contribution, while the fastest-growing part of the economy has been its
services sector - which includes construction, telecom, software and
information technologies, infrastructure, tourism, education, health
care, travel, trade, banking and others components of its economy.

The post independence-era Indian economy (from 1947 to 1991)

was

a mixed

economy with

an

inward-looking,

centrally

planned, interventionist policies and import-substituting economic model

that failed to take advantage of the post-war expansion of trade and that
nationalized many sectors of its economy. India's share of global trade
fell from 1.3% in 1953 to 0.5% in 1983. [33] This model contributed to
widespread inefficiencies and corruption, and it was poorly implemented.
After a fiscal crisis in 1991, India has increasingly adopted freemarket principles and liberalised its economy to international trade.
These reforms were started by former Finance minister Manmohan
Singh under the Prime Ministership of P.V.Narasimha Rao. They
eliminated much of Licence Raj, a pre- and post-British era mechanism
of strict government controls on setting up new industry. Following these
economic reforms, and a strong focus on developing national
infrastructure such as the Golden Quadrilateral project by former Prime
Minister Atal Bihari Vajpayee, the country's economic growth progressed
at a rapid pace, with relatively large increases in per-capita
incomes. The south western state of Maharashtra contributes the
highest towards India's GDP among all states, while Bihar is among its

poorest states in terms of GNI per capita. Mumbai is known as the trade
and financial capital of India.

Global trade relations

Until the liberalisation of 1991, India was largely and intentionally
isolated from the world markets, to protect its economy and to achieve
self-reliance. Foreign trade was subject to import tariffs, export taxes and
quantitative restrictions, while foreign direct investment (FDI) was
restricted by upper-limit equity participation, restrictions on technology
transfer, export obligations and government approvals; these approvals
were needed for nearly 60% of new FDI in the industrial sector. The
restrictions ensured that FDI averaged only around $200 million annually
between 1985 and 1991; a large percentage of the capital flows
consisted of foreign aid, commercial borrowing and deposits of nonresident Indians. India's exports were stagnant for the first 15 years after
independence, due to general neglect of trade policy by the government
of that period. Imports in the same period, due to industrialisation being
nascent, consisted predominantly of machinery, raw materials and
consumer goods.

India is a founding-member of General Agreement on Tariffs and

Trade (GATT) since 1947 and its successor, the WTO. While
participating actively in its general council meetings, India has been
crucial in voicing the concerns of the developing world. For instance,
India has continued its opposition to the inclusion of such matters as
labour and environment issues and other non-tariff barriers to trade into
the WTO policies.
Country
GERMANY
UAE
SAUDI ARABIA
USA
SWITZERLAND
IRAQ
QATAR
KUWAIT
GERMANY
INDONESIA

Country
USA
UAE
SINGAPORE
GERMANY
HONG KONG
SAUDI ARAB
NETHERLANDS
UK
GERMANY

Top ten exporters to India

2012-2013 (Apr%Share (2012-2013
Sep)
(Apr- Sep)
28025.57
11.92
19622.81
8.35
16094.83
6.85
12208.05
5.19
10779.45
4.59
9803.79
4.17
8144.45
3.47
8134.73
3.46
7154.41
3.04
6944.86
2.95
Top ten importers from India
2012-2013 (Apr%Share (2012-2013
Sep)
(Apr- Sep)
19704.05
13.87
18601.71
13.09
6652.77
4.68
6417.32
4.52
6137.9
4.32
4636.29
3.26
4458.24
3.14
4112.26
2.89
3491.77
2.46
8

BRAZIL

3042.64

2.14

Chapter 4

Economy Of Germany

Germany is the largest national economy in Europe, the fourthlargest by nominal GDP in the world, and fifth by GDP (PPP). Since the
age of industrialisation and beyond, the country has been a driver,
innovator, and beneficiary of an ever more globalised economy.
Germany's economic policy is based on the concept of the social market
economy. The country is a founding member of the European Union and
the Euro zone. Germany is the third largest exporter in the world with
$1.516 trillion exported in 2012. Exports account for more than one-third
of national output. In 2013, Germany recorded the highest trade surplus
in the world worth $270 billion, making it the biggest capital exporter
globally.
Germany is the largest producer of lignite in the world. Germany is
also rich in timber, iron ore, potash, salt, uranium, nickel, copper and
natural gas. Energy in Germany is sourced predominantly by fossil fuels,
followed by nuclear power, and by renewable energy like biomass (wood
and bio fuels), wind, hydro and solar.
10

The service sector contributes around 70% of the total GDP,

industry 29.1%, and agriculture 0.9%. Most of the country's products are
in engineering, especially in automobiles, machinery, metals, and
chemical goods. Germany is the leading producer of wind turbines and
solar power technology in the world. Combination of service-oriented
manufacturing, R&D spending, links between industry and academia,
international cooperation and the Mittelstand contribute to the overall
competitiveness of the economy of Germany.
Germany is the world's top location for trade fairs. Around two
thirds of the world's leading trade fairs take place in Germany. The
largest annual international trade fairs and congresses are held in
several German cities such as Hanover, Munich, Frankfurt and Berlin.
Germany as a federation is a polycentric country and does not have a
single economic center. The stock exchange is located in Frankfurt am
Main, the largest Media company (Bertelsmann AG) is headquartered
in Gtersloh;

the

largest

car

manufacturers

are

in Wolfsburg, Stuttgart and Mnchen.

Germany is an advocate of closer European economic and political
integration. Its commercial policies are increasingly determined by

11

agreements among European Union (EU) members and EU single

market legislation. Germany introduced the common European currency,
the euro on 1 January 1999. Its monetary policy is set by theEuropean
Central Bank in Frankfurt.
The southern states ("Bundeslnder"), especially Bayern, BadenWrttemberg and Hessen, are economically stronger than the northern
states. One of Germany's traditionally strongest (and at the same time
oldest)

economic

regions

is

the Ruhr

area in

the

west,

between Bonn and Dortmund. 27 of the country's 100 largest companies

are located there. In recent years, however, the area, whose economy is
based on natural resources and heavy industry, has seen a substantial
rise in unemployment (2010: 8.7%).
The economy of Bayern and Baden-Wrttemberg, the states with
the lowest number of unemployed people (2010: 4.5%, 4.9%), on the
other hand, is based on high-value products. Important sectors are
automobiles, electronics, aerospace and biomedicine, among others.
Baden-Wrttemberg is an industrial center especially for automobile and
machine building industry and the home of brands like Mercedes-Benz
(Daimler), Porsche and Bosch.

12

13

Chapter 5

India Trade Relations

India being an emerging economy of the world has a strong
economic policy which stresses on developing and strengthening
bilateral trade relations with different nations across the world.

Top Ten Trading Partners of India

As of 2008-09, Indias top ten trading partners and the trade
carried out with them has been summarised as
Country

Trade 2008-09

Trade Balance

(Rs. In crores)

(Rs. In crores)

GERMANY

1,63,202

-92,676

USA

1,55,353

12,254

UAE

1,52,668

-1,934

SAUDI ARABIA

1,05,602

-64,303

GERMANY

67,602

-19,497

SINGAPORE

63,280

2,934

UK

50,144

524

HONG KONG

50,129

1,772

BELGIUM

41,552

-5,294

NETHERLAND

33,099

19,049

14

Chapter 6

Indo-German Economic Relations

Chancellor Merkel and Prime Minister Singh at the Hanover Fair in
2006( dpa)With trade history that spans more than 500 years, India
and Germany share a strategic partnership that has its basis in strong
business and economic links. Over the years, not only has the bilateral
trade increased, but German firms have discovered new investment
opportunities in India and so have the Indian firms in Germany.
Indo-German economic relations have an interesting history. The first
economic links between India and Germany date as far back as the 16th
century. Jakob Fugger, a merchant and banker from Augsburg, financed
the voyage of the first German ships to Goa, thus opening up the trade
route between Germany and India. Between the 16th and the 18th
centuries, a number of German companies were established with the
aim of trading with Indian and other East Asian countries. In the 19th
century it was the German company Siemens who built the first
telegraph connection between Kolkata and London, via Berlin.

India & Germany as Trading Partners

For the year 2010, Indo-German trade relations achieved a new
high, with trade volume crossing the 15 billion mark. According to
figures released by the German Federal Statistics Office, between
January to December 2010, the total volume of bilateral trade increased
by 17.9 per cent compared to a negative percentage in 2009. First 5
months of this year has shown an outstanding growth of 28% in total
volumes.
Germany and India have set a bilateral annual trade target of 20
billion by 2012.
The bilateral trade picked up tremendous momentum in the postliberalisation era. The trade volume has increased nearly six times since
1991 -- with exports to Germany increasing five times and imports from
Germany to India almost seven times.
15

The new century led to even stronger growth indicators in bilateral

trade, which has grown by an average of 29 per cent per annum since
2003. A new milestone was reached in 2006, when the total volume of
trade crossed the 10 billion threshold, three years earlier than
expected. The bilateral trade numbers continued on an upward swing in
2007 and 2008, with volume of trade reaching 12.07 billion and 13.41
billion respectively. The recession affected the bilateral trade in 2009, but
only marginally, with the figures declining to 13.10 billion.

16

Chapter 7

Indias overall Exports to Germany

The bilateral trade relations between India and Germany have
remarkably increased over the years and both Indian and German firms
have had their share of investment. Post recession period Indian exports
to Germany have seen an incredible growth in 2010, recording a total
increase of 21.5%. The figures of total exports have touched to Euro 6.2
billion.

Indian
The Indian

textile
Textile

Exports

to

industry generally

Germany
comprises

of

manufacturers, wholesalers, suppliers, and exporters of cotton

textiles, handloom, woollen textiles etc. Germany is one of t he
foremost importers of handmade fibre textile of India. Indian
textile export to Germany resulted for the highest share and it
amounted to Euro 1.5 billion in 2010.

Indian
CeBIT

IT
2011,

Exports

to

Hannover

Germany
Germany

One of Indias prime trade facilitation organizations, Electronics

and Computer Software Export Promotion Council (ESC)
having more than 2,300 members took part in a grand way at
the CeBIT held from March 1-5th 2011at Hannover, Germany.

17

CeBIT is one of the best known international trade fair

showcasing the technological process used all across the
world. The main objective of the trade show was to help out the
associate exporters to expand their business base globally.
Users from industry, skilled trades, banks, services sector,
government agencies, science and all passionate about
technology

were

the

key

target

groups.

Roughly 20 Indian ICT companies participated at CeBIT under

ESC

banner.

The

mass

participation

of

the Indian

companies clearly indicated their increasing interests of

investment in the EU region, with Germany being a prime
target. ICT products as ERP, business process management,
business intelligence, vertical market solutions, managed
services,

internet

solutions,

web

content

management,

ecommerce, web design and technologies and many others

were on display at the CeBIT. ESC has been a regular
participant at the CeBIT since last many years. The Indian
companies under ESC have expressed their interests in setting
up joint ventures, having further marketing associations with
the EU. The ESC has reportedly mentioned that there has
been a remarkable rise in ICT exports from India to Germany.

INDIASOFT

2011

The ESC also hosted a large delegation from EU which

participated at INDIASOFT 2011 on March 25-26. INDIASOFT
18

is one of the biggest IT networking events as per global

standards and this years venue for the event was Pune. It
resulted in further strengthening the IT relations between India
and EU and particularly with Germany.

India has requested to Germany to remove technology

trade

restrictions

For better trade relations, especially high-end technology trade

with Germany, India has urged the European nation to ease
trade restrictions and thus provide a suitable platform for both
the countries to work on and gain mutual benefit.

Indian

Leather

Export

to

Germany

The Indian leather export industry eyes Germany as a prime

target for exporting its leather items. 80 per cent of the
country's total leather exports are mainly to the US and Europe
with Germany accounting to 14 percent, to UK around 13
percent, the US about 9 percent.

Indian

Agro

Exports

to

Germany

Agricultural sector is the backbone of the rural Indian

economy. Agro Exports to Germany from India has been a
significant part of the total export of Indian agricultural items.
The major Indian agricultural products exported to Germany
are floricultural products, walnuts, dried and preserved
vegetables, poultry products, processed meat, natural honey

19

etc. Among the floricultural products, the chief share is of cut

flowers.

Cut flowers, flowering and ornamental plants, bulbs, tubers,

rhizomes, chicory, orchids, mosses etc are the, main
floricultural items exported from India. Germany holds a
percentage of 5.41% in the floriculture export market of India.

Indian

Glass

Industry

Trade

with

Germany

Kolkata based Hindustan National Glass & Industries (HNG),

has bought a German company, Agenda Glass, (AG) for an unrevealed amount. HNG is Indias largest maker of glass
containers and has a total share of 55% in the market. The
new company has been renamed as HNG Global GmbH. The
deal was signed this May11, 2011. Saxony Anhalt will continue
to be the main centre for glass production in Germany, as
ensured by HNG. HNG can benefit from the "excellent
conditions" available as high quality raw materials and modern
infrastructure.

Figures

of

Indo-German

Export

Market

Overall the export industry is growing day by day and the

figures indicate a rise in the trade between the two countries.
The textile industry accounts for the highest trade with figures
of export touching Euro 1.5 Billion. The second position is
occupied by the chemical products which are worth about Euro
20

585 million. Data processing, electronic and optical equipment

with 579 million come next to it. The fourth and fifth spots are
taken by machinery with 418 million and leather products with
396 million.

21

Chapter 8

German Exports to India

Germany, which is one of the worlds leading exporters stands

on the fifth position globally as Indias trade associate. It is also the
largest trading partner within the European Union. Germany shares a
notable 11 per cent of the total business dealings between

EU and India. German exports to India grew to 8.2 billion,

advancing at a rate of over 12 per cent in 2008. In 2009, this figure
reduced

by

1.2

percent

to

arrive

at

8.1

billion.

FIGURES OF INDO-GERMAN EXPORT MARKET

There is a growing trend in the bilateral trade between the

two nations and the export industry has registered an incredible growth.
Figures
of
export
for
the
textile
industry
(http://business.mapsofindia.com/india-industry/) touched Euro 1.5
billion. Export of chemicals occupied the second position with statistics
showing export worth about Euro 585 million. The next spot is taken by
data processing, electronic and optical equipment where export reached
Euro 579 million. Machinery and leather exports occupied the fourth and
fifth positions with export figures worth Euro 418 million and Euro 396
million respectively.

22

Chapter 9

Indian IT Exports to Germany

Indian IT Exports to Germany is the upcoming profitable venture

between the two countries, India and Germany. There exists active
cooperation in the field of economy with the celebration of the 500 years
of the establishment of Indo-German trade relations in the year 2005.
Indian

IT

Exports

to

Germany:

Overview

In the year 2000-01, Indian IT Exports to Germany registered a growth of

48 per cent amounting to $235 million. In the previous year, India's
computer software and services export to Germany amounted to $160
million. In terms of Indian IT Exports to Germany, the latter nation is the
third largest destination. An Electronics and Computer Software Export
Promotion Council in order to increase the scope for Indian software
exports in Germany, sent a delegation in the CeBIT 2002 show that took
place in Hannover in 2002. Since then the Indian IT Exports to
Germany gained
further
impetus.
The Indian IT Exports to Germany has started after exporting to the US
market, with the German IT services market worth as 26.5 billion Euros.
The Indian software and services firms have started looking beyond their
domestic boundaries to the European countries for further growth. There
exists huge opportunity for them in Germany as this European country
accounts for only 2.8 percent of Indias software exports. One of the
software companies such as Hexa ware have been quick to grab this
opportunity. In the first half of 2004, of the 25 percent revenues from the
European market 15 to 20 percent was contributed by the German unit
of the Hex aware. At present, the clients of Hexa ware are like Citibank,
Lufthansa
Systems
and
Deutsche
Leasing
in
Germany.
Products under Indian IT Exports to Germany: India got a platform to
display its huge potential in the German market as one of the highly
competitive onsite provider and supplier of technology. Moreover India is
also an outsourcing destination and a powerful center for research and
development. Not only in terms of providing computer software and
23

Services export to the foreign countries, India is also gaining importance

in newer
Services like packaged software implementation, systems integration,
network

infrastructure

management,

and

IT

consulting.

Factors facilitating the growth of Indian IT Exports to Germany: The

factors facilitating the growth of Indian IT Exports to Germany are like
the increased specialization, availability of a large section of low cost,
but highly skilled, educated and fluent English-speaking workers for the
development of the IT sectors in India. However, on the other hand, the
rise in demand from foreign consumers interested in India's service
exports and due to those foreign countries looking to outsource their
operations

the

Indian

software

firms

flourished.

The recent rise in the Indian IT Exports to Germany is due to

some benefits as these exports do not require the purchase of hardware
or software by the Indian company or the provision of any significant
technology infrastructure within the country. Moreover, since the onsite
exports are based on links with foreign collaborators, they do not require
that standard of marketing and financing as competition within the open
market would.

24

Chapter 10

PROBLEMS OF LOW SHARE OF INDIAS

EXPORT TRADE
Indias export performance is poor. Since independence Indias
share of the world export trade is 1%. The share of export trade of other
developing countries of Asia like china, South Korea, Malaysia,
Singapore & Thailand is very much than India.
A. EXPORT RELATED PROBLEMS: Poor quality.
High prices.
Inadequate promotion.
Poor follow-up of sales.
Poor negotiation skills.
B. GENERAL CAUES: Problem of trading blocs.
Negative attitude of overseas buyers.
Documentation & formalities.
Presence of good domestic market.
Poor infrastructure.

Chapter 11

25

CONCLUSION
Whether or not India overtakes Germany in the next two decades,
it is clear that both countries will be economic powerhouses in the
medium term. Undoubtedly, their growth will have significant impacts on
the World economy.
The India-Germany relationship may not be an ideal relationship in
the narrative of a bilateral relationship between the countries. But given
the complexity of the relationship taking into account the divergent
political system, the unresolved territorial dispute, Compulsion of geopolitics, the quest for resources and markets, and aspirations of the two
countries for global influence and power, the relationship between the
two countries is certainly a matter of great satisfaction. In spite of
occasional hiccups and pinpricks, the relationship between the two
countries has shown a certain degree of resilience. It is not a relationship
between a large country and a small country, but a dynamic relationship
between two great countries boasting of a great civilization and cultural
past, complex dynamics of the present and a very challenging and
promising future crafting a new world order. True that there is a trust
deficit and security dilemma between the two countries, but it is equally
true that there is a groundswell of goodwill between the two countries.
Although one cannot rule out the possibility of a conflict between the two
26

countries, one has to remember that 2012 is not 1962. In the relationship
between the two countries, some amount of conflict of interest is bound
to be there, but that need not stymie the relationship. In fact, over the
years the relationship between the two countries has acquired a degree
of resilience, which is reflected in their mutual accommodation and
adjustment. Indias growing stature, its economic rise and military
capability including the launching of the Agni V missile has certainly
helped in stabilizing the relationship between the two countries.

27