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Economy, defence focus areas in Sarkozy trip

The French president is to come on his first trip to India with a 300-member delegation, including senior ministers, 60 captains of business and a large press party.

india Updated: Jan 24, 2008 12:23 IST

When French President Nicolas Sarkozy steps out of his special plane into the early morning chill of the Indian capital on Friday, he is expected to come with an agenda to give substance to an already warm relationship to yield higher economic fruits and lucrative defence deals.

Travelling sans his companion Carla Bruni, 54-year-old Sarkozy is accompanied on his first trip to India as president by a 300-member delegation, including senior ministers, 60 captains of business and a large press party.

Indo-French warmth has never really been in question. RK Jain of Jawaharlal Nehru University's School of International Studies points out that France had always been India's "tried and trusted friend". Talking to IANS, he referred to the aftermath of the 1998 nuclear tests, when France had been among the handful of countries that did not impose sanctions on India.

According to former Indian ambassador to France Dilip Lahiri, while India cannot compete with China in the French imagination, there has always been a "romantic view" of India, which was well reciprocated by an earlier generation of Indian leaders like Jawaharlal Nehru - with his loud admiration of a France resurgent from the rubble of World War II.

French foreign policy has always been noted for its pragmatism, which has usually benefited India so far. The last time a French head of state was in Delhi, he had come right after the US President George W Bush's India sojourn that had produced the historic India-US joint statement on civil nuclear cooperation.

Dogging the Americans, Jacques Chirac lost no time in signing a declaration that signalled France's intent to move aggressively to garner a share of the Indian nuclear industry, once the doors were thrown open. France was among the first countries to fully support the deal.

Two years on, the Indo-US nuclear deal appears bogged down. The Indians and the French have finalised the text of a bilateral technical document for civil nuclear cooperation, but it cannot be inked unless a safeguards agreements is signed with International Atomic Energy Agency and the Nuclear Suppliers Groups agrees to make an exception for India, a non-NPT signatory.

So, while a star pact like nuclear energy will not be signed during Sarkozy's two-day stay, there is likely to be more focus on deliverables in the spheres of economy and defence.

While political relations between the two countries have always been excellent - France has also supported India's effort to be a permanent member of the UN Security Council - the warmth has only lately been reflected on the economic side.

So far, the most productive part of the relations has been the extensive defence cooperation that began in the 1950s.

For long, France was India's second most important military supplier after Russia, though it has been overtaken by Israel in the last few years.

An Indo-French defence agreement is expected to be signed on Friday, which is expected to build on a 2006 treaty that laid down a framework for cooperation in this field.

There was a big hiccup in this area in December 2007, when India abruptly cancelled a military tender for supply of light helicopters worth $600 million, for which Eurocopter - a Spanish, English and French consortium - had been in the shortlist.

There was speculation that upset over the cancellation, Sarkozy may not come to India as the chief guest of this year's Republic Day parade on Saturday, but that was strongly rebutted by the visiting French foreign minister Bernard Kouchner even as he expressed regret over the tender cancellation.

Sarkozy is expected to raise the matter during the talks, as well as other defence contracts, including proposed upgrading of the ageing fleet of MiG 2000 of the Indian Air Force and supply of six more conventional submarines to the Indian Navy.

Informed sources said that the French have offered to upgrade the ageing planes to 2010 technology, which will lengthen their service lives by another 25 years.

On the economic side, India and France plan to double their 2006 trade figures in three years. With bilateral trade in 2006-07 recorded at $6.3 billion, it is expected that this target will be crossed easily.

Till 2004-05, the balance of trade had been firmly on India's side, but it tilted radically thereafter. Imports from France in 2006-07 were worth $4.21 billion - twice that of Indian exports at $2.1 billion. Out of the total French exports to India, aircraft and space industry products accounted for over half the money at $2.3 billion.

Indian exports have recorded an increase over the years, but have not kept up with the rise on the French side.

Investments by French companies have also increased, but cumulatively they only account for about 1.77 per cent of total FDI approvals in India in the last 16 years.

The high-powered business delegation will have top executives from multinationals like Areva, Thales and Carrefour.

According to industry sources, about nine or ten business agreements are expected to be signed, mostly in the energy sector.