Nicholas Sarkozy probably didn’t pay more than passing attention to the fact that he announced business deals worth more billion dollars than his close friend, Barack Obama, during their respective state visits to India.
France is well behind the United States on the Indian economic and strategic radar. Worse, it is behind even small European countries such as Belgium when it comes to bilateral trade with India. That would change if New Delhi were to eventually buy a few reactors.
What will be more difficult to change, however, is the lack of strategic depth between the two countries.
It wasn’t always like this. France was seen as that part of the West willing to break ranks with the rest when it came to India. Most notable has been its consistent refusal to impose sanctions on India over the nuclear tests and other supposed infractions. The problem is that the US has become the diplomatic reagent for India. France’s utility as the contrarian power is much reduced.
But France and India can work together if they put their minds to it. The problem is that their mutual horizon is extraordinarily limited. Paris tends to focus only on big commercial deals, New Delhi on using France as a chess piece in short-term diplomatic games.
On the economic front, France could use India to overcome its declining competitiveness in industry. To maintain its semi-autonomous capabilities in the defence and nuclear sectors, France has to export aggressively. But competition is fierce in both sectors. The Rafale fighter has struggled to find buyers, driving up its price and making it even less saleable.
France’s nuclear energy firm, Areva, used to be confident that its global standing was unassailable until South Korea ran away with a massive $20 billion United Arab Emirates reactor contract recently. What horrified Areva was that the Koreans had won with reactors as advanced as theirs, but more efficient and much cheaper to build.
This is the French problem. Its engineering products suffer from inflated price tags. Critics call this “a champagne effect” – a premium that goes with the “Fabrique en Francais” seal.
India could be part of this solution. India’s burgeoning high-end manufacturing sector has been brilliant in combining precision with low cost. Areva has cottoned on to this potential. Indian firms make 70% of the components of a reactor but do so at a fraction of the price of anyone else. An Indo-French reactor would be a market beater.
On the strategic front, there needs to be a lot more awareness between the establishments of both countries. France and India both like to say they support a “multipolar world”. At one point, this meant reducing the overweening power of the US. Both countries have modified this to mean ensuring that China does not solely usurp the geopolitical space that the US is surrendering. French and Indian officials give this spiel privately. But rarely to each other and never with an action plan attached.
New Delhi seems to assume that because Paris has little or no strategic footprint, it shouldn’t be taken too seriously on the strategic level. This should be reconsidered on three fronts.
One, France is arguably the most dependable Western power for Indian diplomacy in such fora as the United Nations Security Council, the Group of Eight and so on.
Two, it is often forgotten that France is an Indian Ocean power thanks to its naval presence in Reunion, Socotra and elsewhere.
Three, India does not interact with France in any systematic manner about almost any strategic issue. There is a fair amount of exchange in policing issues like terrorism and intelligence. But little conversation about Afghanistan-Pakistan, China, West Asia – a part of the world that France has considerable knowledge, and the like.
The two countries suffer from a lack of civil society links – Indian migration to France is negligible and Indian firms shun France’s dirigiste business environment. This is unlikely to change. Which is why officialdom needs to take the lead.
Sarkozy’s trip was a missed chance to get this stone rolling. French wines constitute half the imports driving India’s rediscovery of the grape. Cosmetics giant L’Oreal is the most successful French firm in India with growth figures of 30% a year. Carla Bruni’s glamour nearly outshone Sarkozy’s diplomacy.
India and France are a relationship needing substance and unfortunately experiencing only a surfeit of style.