German-Iranian relations have been tense for the past few years because of German criticism of Iran's nuclear program, and recent events have upped the tension. In April, Germany abandoned its opposition to European Union sanctions on an Iranian bank based in Hamburg that was a "financial lifeline" to the country's nuclear program, and in October 2010, Iran detained two German journalists, holding them until this February.
Through this, the countries trade relations have remained strong. In 2010, Germany was the third-largest exporter to Iran with total exports worth $5.5 billion. However, some German companies – including Siemens and ThyssenKrupp – have stopped doing business with Iran, Der Spiegel reports.
While the main focus of Ms. Merkel's visit is trade – Germany is India's largest European trading partner and the two conducted $21 billion worth of business in 2010 – another important topic is security.
In a preview to Merkel's visit, Indian newspaper The Hindu reports that issues on the agenda will include a German plan for economic assistance to Pakistan in order to bolster the military's ability to fight militants in the country's tribal regions – a plan India opposes.
Afghanistan also figured into talks. Germany is reducing its number of troops on the ground and is seeking the involvement of other countries in the region as it begins its pullout, according to The Hindu.