Now I have completed their interview process and waiting for the decision from their end. Yesterday the HR emailed me stating that they need some time to sort some things on their end and she asked whether I am in other recruiting process or not?
I am not sure what to tell her, I know they are asking this to be sure they don't loose me. Should I lie to them that I am in other recruiting process or should I just say that i am not.
Next consideration, very short terms of employment look bad. You will likely need to have an explanation for this.
Last consideration, what's the right thing to do and what's right for you at this time. This is something you need to decide. For me, let's assume I have gotten an offer letter, accepted the offer, and started work. Then for me that means that I have made a deal with the company that's good for 1-2 years (I typically won't leave before at least that time). That deal is off if items in your offer letter are not delivered.
So, if it was me and your'e at that point, I would tell the German based company that you accepted an offer that came in, that your current tasking is one (or two) years and you'd like to keep the door open because things can change. They know that if they wanted you to not accept other offers they needed to move quickly, so they shouldn't be surprised.
Also, sometimes adding pressure to a situation can make them just pass if there are any questions or doubts. But given a few extra days they may wait for more feedback which works in your favor.
I'd relax and not force it, if it works out then you have a decision to make, otherwise you are still in good shape for now.