Sarkozy courts Indian business, G-20 support3 min read . Updated: 06 Dec 2010, 03:49 PM IST
Sarkozy courts Indian business, G-20 support
Sarkozy courts Indian business, G-20 support
New Delhi: France’s President Nicolas Sarkozy said on Monday he had clinched deals worth about $20 billion with India, becoming the latest among a string of world leaders jostling for a share of Asia’s third biggest economy.
The business deals, which spanned atomic energy, defence and civil aviation, comfortably bettered the $10 billion US President Barack Obama secured on his November visit. They come a day before Sarkozy is due to end his four-day visit.
Chinese premier Wen Jiabao and Russian President Dmitry Medvedev are also due to visit India this month, a sign of how major powers are vying for the world’s biggest new defence and power markets, long closed to outside investors.
India is trying to boost its power generation capability and defence, wary it is falling behind China.
Sarkozy also called for a joint proposal with India to push his ambitious reform agenda for the G-20 group of developed and emerging nations, including changes to the global monetary system and commodity prices.
“France considers that no big-item problem in the world can be solved without India participating at the highest level. India is a major economy, we came to visit India as a partner," Sarkozy told a joint press conference with Prime Minister Manmohan Singh.
India, a member of the Bric group of rapidly developing countries, is forecast to see economic growth of almost 9 percent this year, with the economy accelerating further in following years, levels rivalled only by China.
Investors are also keen to tap into a country with a young and fast-urbanising population of 1.2 billion.
But like every foreign investors, the French must negotiate a series of regulatory problems and Indian politics. The government is currently mired in a string of corruption scandals that have tarnished India’s image as an investment destination
France and India signed a framework contract for the sale of at least two French atomic reactors by French nuclear group Areva, estimated at around €7 billion ($9.3 billion). Work on the reactors will start next year.
France is competing with US and Russian firms for a slice of India’s civilian nuclear energy market, worth an estimated $150 billion, after New Delhi signed a series of civilian nuclear deals that ended its status as a nuclear pariah.
France took over the chair of the G-20 group of developed and emerging nations a month ago amid the eurozone debt crisis and rows over global trade imbalances and currency valuations.
“France also wants joint proposals with its Indian friends within the framework of the G-20 on the regulation of commodity prices," Sarkozy said.
“On also international monetary systems, on the matter of financial mechanisms whereby we can help the poorest countries develop and also on reforming world governance," he added.
DEALS, DEALS, DEALS
European group Airbus has signed lease contracts to supply A330 aircraft to India’s Jet Airways and Air India in separate deals totalling €2.8 billion. French tyre maker Michelin will invest €600 million in a factory in southern Indian state of Tamil Nadu.
India and France are also close to signing deals for a 2 billion euro joint missile development and refitting the Asian’s giant’s Mirage fighter jets at a cost of 1.5 billion euros, a French government statement said on Monday.
Thales will upgrade the Mirage fighter jets and European missile maker MBDA will develop the surface-to-air missiles, the statement added.
India is spending $50 billion in the next five years in defence deals, and is looking at new partners to replace Russia, its Cold War ally.
Sarkozy’s visit comes before a summit between India and the European Union where New Delhi’s position on global financial reforms is likely to be high on the agenda.
As US President Barack Obama did in November, Sarkozy has pleased his audience with a pledge to support a long-standing Indian demand for a permanent seat at the UN Security Council alongside France, Russia, China, Britain and the United States.
Indian officials have also given France “reasons to be confident" the two sides would reach consensus on India’s nuclear liability laws, a French source said earlier, which have in the past made foreign firms, especially in the United States, wary of entering the Indian market.
Areva CEO Anne Lauvergeon, who accompanied Sarkozy, said she expected the French reactors to start producing power by 2018 and, while she did not see liability as an obstacle, said “a number of points need to be clarified.
Sarkozy, who arrived in India on Saturday, is heading a 50-member French delegation of senior business leaders and cabinet officials, including Finance Minister Christine Lagarde.