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Prime Minister Narendra Modi with French President Francois Hollande in New Delhi on Monday. Photo: PTI
Prime Minister Narendra Modi with French President Francois Hollande in New Delhi on Monday. Photo: PTI

India, France ink $15 billion in business deals

Deals span sectors including aviation, urban development and railways; French firms will invest $10 billion in India over the next five years

New Delhi: India and France on Monday deepened their strategic partnership, concluding deals worth an estimated $15 billion over two days.

In addition, French companies will invest $10 billion in India over the next five years.

The deals signed on Monday spanned several sectors, including aviation, nuclear energy, space, urban development, and railways, and many checked in under the Modi government’s campaigns such as Smart Cities and Make in India.

A marginally discordant note in this happy aria was that the biggest constituent of the $15 billion, the $9 billion deal to buy 36 French built Rafale fighter aircraft to replace India’s ageing Russian made MiG fighter jets, couldn’t be closed as both sides were unable to agree on the financial aspects of the pact.

Still, French President Francois Hollande and Indian Prime Minister Narendra Modi on Monday oversaw the signing of a preliminary pact on the Rafale deal.

“Leaving out the financial aspect, India and France have signed Inter-Governmental Agreement (IGA) on purchase of 36 Rafale fighter jets. We expect that even the financial aspects pertaining to purchase of Rafale jets will be resolved as soon as possible," Modi said at a joint press event with Hollande.

On his part, Hollande described the signing of the IGA as a “decisive" step, with the financial aspects being sorted out in a “couple of days".

“When the financial parts are settled, then the IGA in its entirety will be concluded," foreign secretary S. Jaishankar said.

Dassault Aviation said in a statement on Monday that it is “very pleased with this progress, and is actively supporting French authorities in their efforts to finalize a complete agreement within the next four weeks".

The two countries have been in negotiations for 36 Rafale fighter jets in a fly-away condition since April, when Modi announced the deal during his visit to France. That itself was an effort to break the logjam in a deal involving the purchase of 126 aircraft.

Another key agreement inked was in railways, with Alstom signing a preliminary pact with Indian Railways to produce 800 electric locomotives in Madhepura in Bihar. This could see an investment of about $3 billion over time, according to an Indian government official.

Indian Railways and French railway company Société Nationale des Chemins de Fer (SNCF) signed another agreement to conduct a joint feasibility study for the development of the Ludhiana and Ambala stations.

Nuclear energy was another focus area.

“On the nuclear side, I think the big development is the fact that we have agreed that at Jaitapur, we will collaborate to construct six nuclear power reactors," instead of the earlier two, Jaishankar said.

According to a joint statement released at the end of the Modi-Hollande talks, “the two leaders encouraged their industrial companies to conclude techno-commercial negotiations by the end of 2016 for the construction of six nuclear power reactor units at Jaitapur".

Besides this, the Indian Space Research Organisation signed three pacts with its French counterpart Centre national d’Etudes Spatiales, including one for hosting the French Argos-4 payload onboard India’s Oceansat-3 satellite.

“All told, between what was signed in Chandigarh and today we have a total of 30 agreements," Jaishankar said, referring to the 14 pacts signed on Monday and the 16 initialled on Sunday at a meeting between Indian and French business men in Chandigarh, Hollande’s first stop on his three-day India visit.

Former foreign secretary Lalit Mansingh noted that Modi has a blueprint for developing India which includes smart cities, Make in India, Digital India and various other flagship programmes.

“What we are seeing now is each country making its choice of which programme it wants to partner India—the Japanese have decided on industrial corridors and high speed trains, and the French are talking of nuclear energy and smart cities," Mansingh said

On Sunday, the two countries signed a series of preliminary pacts on the development of Chandigarh, Nagpur and Puducherry as “smart cities", besides another clutch of pacts on urban development, water, waste treatment and solar energy.

This was besides the big push given to Modi’s Make in India programme with the Toulouse-based Airbus Group signing a pact with India’s Mahindra and Mahindra Ltd for the manufacture of helicopters.

Separately, addressing a business meeting, French finance minister Michel Sapin said French companies will invest $10 billion in India over the next five years, chiefly in the industrial sector.

“Over the last five years, French companies have invested more than $1 billion per year in India," Sapin said in a speech to members of the Federation of Indian Chambers of Commerce and Industry in New Delhi.

“We estimate that they will continue to invest at least $10 billion over the next five years."

Jaishankar described Hollande’s visit as “very important, significant and impactful".

India and France, both of which have been victims of terrorist attacks, agreed to step up counter-terrorism cooperation.

At least 130 people died in multiple co-ordinated attacks in the French capital on 13 November when militants suspected to be members of the Islamic State struck Paris. And on 2 January, India repulsed an Islamist militant attack on its Pathankot airbase. “From Paris to Pathankot, we saw the gruesome face of the common challenge of terrorism... I also commend the strength of your resolve and action in these terrorist attacks. President Hollande and I have agreed to scale up the range of our counter-terrorism cooperation in a manner that helps us to tangibly mitigate and reduce the threat of extremism and terrorism to our societies," Modi said.

“We are also of the view that the global community needs to act decisively against those who provide safe havens to terrorists, who nurture them through finances, training and infrastructure support," he added.

Jyotika Sood and Amrit Raj in Delhi and P.R. Sanjai in Mumbai contributed to this story.

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