As India prepares to host the German Chancellor, bilateral engagement is naturally expected to revolve around geopolitics, defence cooperation, climate commitments, and trade balances. Yet, beneath these high-visibility agendas lies a quieter but potentially more transformative opportunity: placing Micro, Small and Medium Enterprises (MSMEs) at the centre of India–Germany economic cooperation. MSMEs form the backbone of both economies, shaping employment, innovation, regional development, and long-term competitiveness.

Germany’s Mittelstand and India’s rapidly formalising MSME sector embody complementary economic strengths. Germany brings precision engineering, patient capital, and deeply institutionalised support systems, while India offers scale, entrepreneurial energy, adaptability, and cost-effective innovation. A structured, MSME-centric partnership between the two countries can deliver outcomes that extend far beyond bilateral trade—strengthening resilient supply chains, accelerating green industrialisation, generating quality employment, and advancing inclusive growth.

This policy essay sets out the strategic case for anchoring Indo-German cooperation in MSMEs, examines Germany’s institutional ecosystem for small enterprises, distils lessons relevant for India’s reform agenda, and proposes an institutional pathway to convert bilateral intent into a sustained and outcome-oriented partnership.