New Delhi, January 24
The toughest challenge for French President Nicolas Sarkozy during his 39-hour-long India visit beginning tomorrow will be to win Indian defence contracts, the competition for which has become extremely tough, sources said today.
From the Indian perspective, New Delhi is sitting high and pretty with major world powers vying among themselves to gain the biggest slice of the vast Indian defence market.
After Russia, France has been the biggest arms supplier to India with sales touching nearly four billion euros in 2005. The arms market’s callous economics is such that France has now been overtaken by Israel.
To add injury to insult, last month, India cancelled a $600m deal to buy military helicopters from the European Aeronautic Defence and Space Company unit Eurocopter. The signing of the deal was supposed to be the central attraction of Sarkozy’s India visit.
India is fully conscious of its new status in the new world order. It is the biggest weapons buyer among emerging nations. It is tipped to spend $30 b between 2007 and 2012. Most importantly, it has not yet accepted France’s 1.5 b Euro offer to upgrade 52 Mirage-2000 fighter planes, primarily because the cost of $40 million a plane is too expensive.
India and France are yet to become significant trade partners. Though bilateral trade has more than doubled in the past three years and stood at $6.23 billion in 2006-2007, it is woefully short of India’s bilateral trade with China and the US which is nearing the $40 billion mark in the each case.
France is the eighth largest investor in India with total investment commitments of $1.76 billion during the period 1991-2007. Major sectors attracting French investment and technology transfer have been fuels, chemicals, cement and gypsum products, glass, food processing, electric equipment, industrial machinery and transportation industry. French investments are expected to expand in coming years. India’s IT, pharmaceuticals and other industries have been enhancing their presence in France.
This can sharply go up if the Indo-French defence relationship were to become as vibrant as Paris wants. France has already been pushing India into having a more meaningful and intensive cooperation in the knowledge economy fields.
There is an active exchange of experts taking place in key high-technology areas of research, under the aegis of the Agreement for Cooperation in Science and Technology and specific agreements between specialised Indian ministries or organisations and their French counterparts.
