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Business News/ Opinion / Fulfilling the potential of India-France ties

Fulfilling the potential of India-France ties

Economic and strategic progress is not commensurate with political goodwill

Illustration: Jayachandran/MintPremium
Illustration: Jayachandran/Mint

When Prime Minister Narendra Modi visited France last April, media focus, unsurprisingly, was on the high-profile medium multi-role combat aircraft (MMRCA) deal between the two countries. French President Francois Hollande’s reaction to this was pithy: “I do not want the Indian premier’s visit to be put in the context of a contract." With Hollande now in the country as the chief guest at India’s 67th Republic Day parade, it is an admonition worth remembering. The elusive MMRCA memorandum of understanding (MoU) may have been signed this time around, but the bilateral relationship—among India’s most long-standing—must be defined by an overarching strategic and economic vision.

The other MoUs that have been signed so far point to some of the areas of economic congruence between India and France—split between partnership in Modi’s Smart Cities programme (pertaining to Nagpur, Puducherry and Chandigarh, two of which have a French connection), urban governance and infrastructure development, solar projects and the Make in India initiative. But while these MoUs tie into multiple priority areas for the administration, the strength of the political engagement and goodwill between New Delhi and Paris warrants a broader look at some of the big-ticket areas of engagement.

The MMRCA deal is one such. The MoU may finally be in the bag, but the stopgap nature of the revised terms are cautionary. Given the inability to settle on the contours of the original deal, Modi settled for an off-the-shelf purchase of 36 Rafale fighter jets last year instead of the original order for 126 jets, which would have also entailed co-production. That swap means there will be no transfer of technology. And while it has been put out that the deal’s financial details will be worked out in the near future, past issues to do with defence offsets warrant a measure of wariness here.

The lack of forward planning and the resultant shortfall in the Indian Air Force’s capabilities perhaps explain the need for such ad-hocism. But at the end of the drawn-out process, the question of how much the outlay of billions of dollars will contribute towards the development of India’s indigenous defence industry (reportedly one of the core priorities of the new Defence Procurement Procedure) is up in the air. This cannot be the model for future defence cooperation.

Civil nuclear energy cooperation is another such area. Paris has been steadfast in its support of New Delhi here. In 1998, when the Pokhran nuclear tests had resulted in international condemnation and sanctions, Paris—France had become India’s first strategic partner earlier in the year—refrained from the former and spoke against the latter. Since then, it has extended its support for India’s integration into the global export control regime, the Nuclear Suppliers Group among them. And after signing a civil nuclear agreement with Delhi in 2008, it signed off on an MoU for establishing six nuclear reactor units at Jaitapur in Maharashtra.

Seven years later, the modalities are still in doubt. The joint statement on this trip has, essentially, agreed to speed up discussions on the project. But lingering questions concerning New Delhi’s nuclear liability law, French nuclear energy company Areva’s financial troubles and design, construction and cost issues with its reactors elsewhere mean that question marks remain over the entire endeavour.

Or consider bilateral trade: against a target of €12 billion of annual trade set in 2008, it has grown barely a billion euros since then to hover a little under the €8-billion mark as of 2014. The potential for congruence in one of the most vital strategic arenas of this century, the Indian Ocean region (IOR), also had remained largely unexplored until just a week ago when the first-ever bilateral dialogue on Maritime Security in the IOR took place. A history of joint military exercises, threat perception overlap and France’s interest in the region—made clear in a 2013 white paper—given its territories of La Reunion and Mayotte all provide a solid base. The dialogue must now be institutionalized and built upon.

There are other areas of relevance in the India-France relationship, of course. But these instances point to a relationship, that, while mutually beneficial, has failed to fully exploit the space created by the positive political atmosphere on both sides. At a time when the European Union’s economy, France’s included, continues to stutter, India’s position as the fastest growing large economy gives it added heft.

Modi and Hollande have—like their predecessors—shown their focus on the potential of the countries’ relationship. Now, they must show that they can realize it fully.

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Published: 25 Jan 2016, 11:51 PM IST
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