Chirac to woo India after toxic spat
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Chirac to woo India after toxic spat

Chirac faces tough questions in India over France's opposition to the takeover of Arcelor by Indian-born billionaire Lakshmi Mittal.

india Updated: Feb 17, 2006 14:41 IST

Having called home a mothballed toxic warship poisoning relations, French President Jacques Chirac arrives in India on Sunday with a posse of top executives hungry for trade with one of Asia's booming economies.

But Chirac still faces tough questions in Asia's third biggest economy over its opposition to the takeover of Luxembourg-based steelmaker Arcelor by Indian-born billionaire Lakshmi Mittal.

The French leader will need all his diplomatic skills to smooth over the row, which has sparked charges in India of European xenophobia, and protect prospects for French exporters in an economy growing at around 8 per cent a year.

"It's not good PR for the French president to be seeking multi-billion dollar contracts in India on the one hand and opposing Mittal on the other," said Indian analyst Brahma Chellaney.

Sceptical about a globalised economy increasingly championed by its Asian beneficiaries, Chirac nevertheless brings in his train the cream of the Paris bourse, anxious to extend their business in one of the world's most dynamic zones.

"At a time when Asia is taking a major role in the world, the president wants more than ever to pursue and intensify the effort, with a view to establishing very dense relations with Asian states," Chirac spokesman Jerome Bonnafont said.

Accompanying Chirac will be executives from Airbus maker EADS, heavy engineer Alstom, oil giant Total, nuclear power station builder Areva, STMicroelectronics, defence firm Dassault, the world's largest cement maker Lafarge and Schneider, the world's top electrical equipment maker.

EADS expects to sign a Franco-Indian deal to jointly build a satellite for European satellite operator Eutelsat.

France is only 15th on the list of India's suppliers, far behind the United States, Britain, China and Europe's top exporter, Germany.

Chirac, who also visits Thailand ahead of his India trip, will also be conscious that another VIP salesman is due in New Delhi in March -- US President George W Bush.

Dassault's Mirage 2000-V fighter is vying with the US-built F-16s for an Indian airforce contract for 120 fighters, but a final decision is not expected on this trip.

"There are not big contracts (on the cards) but a visit is not the end, it's a new beginning," a French source said. Despite the presence of Areva in the French delegation, analysts on both sides said there was little prospect of ironing out a full agreement on civil nuclear energy cooperation during the visit, although the issue would dominate talks.

A text being drawn up in advance of the visit was expected to be presented as a "declaration," falling short of a firm agreement, officials involved in the preparations said.

India, a declared nuclear power since 1998, has not signed the Nuclear Non-Proliferation Treaty (NPT).

But last July it signed an agreement with Washington which opened the way for transfers of nuclear fuel and technology, with New Delhi pledging to separate its civilian and nuclear programmes and allow inspections of civilian facilities by the International Atomic Energy Agency.

The deal must still be ratified by the US Congress.

India's energy needs are set to double in coming years, French officials estimate. However, the timing of any increased nuclear co-operation is a sensitive subject as France and other powers step up pressure on Iran over Tehran's nuclear ambitions.

Iran is likely to come up during Chirac's visit, officials said.

First Published: Feb 17, 2006 11:54 IST