Indo-French defence panel activated

From Hari Jaisingh

PARIS, Sept 30 — India and France today decided to activate the high-powered defence committee set up previously to explore ways and means of increased defence cooperation in the area.

The two countries also agreed to have closer cooperation in the fields of education, technology and water management.

The decision on high-level military consultations to identify areas for long-term defence cooperation was arrived at a meeting between the Prime Minister, Mr Atal Behari Vajpayee and the French Defence Minister, Mr Alain Richard and top defence officials here.

As part of the high-level contacts, Defence Minister George Fernandes has been invited to France later this year and the French Defence Minister will visit India soon thereafter.

In the field of education, France expressed its willingness to offer more fellowships to India from the current strength of 130 in various areas.

Mr Vajpayee today visited the French National Assembly where he was accorded a ceremonial reception.

During the day, he also met Captains of French Industry. The Prime Minister, who held separate meetings with the Indo-French Forum and Chief Executives of leading French companies invited them to explore the possibility of investing in India and joint venture tie-ups.

The Forum was established to advance ways to further strengthen and upgrade bilateral ties between India and France.

Wooing investors and businessmen has become a major diplomatic-cum-political exercise these days. Like his predecessors, Prime Minister Atal Behari Vajpayee too has taken this job seriously, though the going for him on this count has not been easy. He met a number of business leaders here and in New York. But their response is cautious and guarded, whatever might be the official claims.

There are a number of reasons for foreign investors' cautious approach.

First, the post-Pokhran politics has got mixed up with their business calculations. Most investors in the USA and Europe would like to await the formal lifting of sanctions before venturing into the Indian market.

Second, several foreign business leaders are not happy with the pace of liberalisation. They still find China to be a better bet than India.

Third, noisy political tussles in India has created a sense of nervousness among them.

"We are not sure of political stability in your country. There is too much of politics in every sphere of activity. We are not sure about your policies and programmes. Why can’t you be clear and consistent? We want long-term policies for investment so that we don’t depend on individual whims and fancies. We have also a bitter experience with your bureaucratic tangles and angularities. Our regret is that though India is a good destination for investors, its leaders do not know how to do business for your country. They should learn from China", a chief executive of a well-known multinational told me. He did not want to be identified since he wants to do business with India.

Not that there is lack of goodwill today towards India here. In fact, there is a lot of it, but for some reason it refuses to get fully translated into economic, trade and scientific terms. Mr Atal Behari Vajpayee is, of course, new to France’s political scene. His BJP-led coalition is yet to make a firm impact on the establishment here.

"We are not sure of your political stability. We don’t find anything wrong with coalition politics. But there is to be a total clarity in policies as well as a definite sense of direction. De-link business from politics and you will find money flowing in for investment in a big way".

This was the thrust of arguments of a number of knowledgeable persons I met during the past two days here.

True, the Indo-French trade shot up by 40 per cent between 1991 and 1997. Even French investment in India has multiplied 90 times between 1991 and 1996. The cumulative foreign direct investment (FDI) since 1991 till May 1998 has been around $ 980 million. Indian exports to France has also grown by nearly 80 per cent over this period. However, all these do not add up to much. The French share in foreign collaboration continues to be relatively small.

It will be interesting to note that France and Germany are the most important nations of Europe and of the European Union (EU). They will shape the future of Europe. The European Union is the largest trading bloc in the world. Although it plays a subordinate role to the USA, this cannot be taken for granted. The French have a distinct policy and it does not always go along with the USA. This provides an opportunity for India, which is working for a multi-polar world.

Mr Vajpayee’s visit does help to clear certain misgivings existing here about policies and programmes. As it is, a solid base exists for all-round cooperation. All that is required is to provide it a dynamic thrust. Though more than 360 Indo-French technical and financial joint ventures have been approved since 1991, tremendous scope exists for further collaborations. A lot will depend on follow-up measures in New Delhi after Mr Vajpayee’s visit which concludes today.