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| India, France sign deals worth euro 13 bn |
| Jyoti Malhotra / New Delhi Dec 07, 2010, 00:51 IST |
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Sarkozy brushes aside international concerns about India’s tough nuclear liability legislation.
 Europe’s most pragmatic power, France, abandoned the international high moral ground and today signed deals with India worth euro 13.3 billion in the nuclear power, civil aviation and defence sectors, even as Prime Minister Manmohan Singh’s fêting of French President Nicholas Sarkozy in the capital sent out the message that doing business with India was mutually beneficial.
Brushing aside international concerns about India’s tough nuclear liability legislation, India and France signed as many as five agreements in the civil nuclear power sector. They included a framework agreement to construct two civil nuclear plants in Jaitapur, Maharashtra, costing euro 7 billion (roughly $9.5 billion). The sixth agreement was on film co-production and one MoU on cooperation on earth system science and climate.
Plans are also afoot to construct another four nuclear power plants (a total of six), all by French nuclear giant Areva, at a total cost of $25 billion.
| À LA CARTE |
| * 2 Jaitapur N-plants: euro 7 billion |
| * Missile development: euro 2 billion |
| * Mirage fleet refit: euro 1.5 billion |
| * A330 lease to Jet, AI: euro 2.8 billion |
Both countries also signed a euro 2-billion deal for joint missile development, besides another agreement to refit India’s Mirage fighter jet fleet at a cost of euro 1.5 billion. Another agreement in the civil aviation sector saw Airbus Industries sign separate deals to lease A330 aircraft to Jet Airways and Air India totalling euro 2.8 billion.
As if this wasn’t enough, Planning Commission Deputy Chairman Montek Singh Ahluwalia dangled the bait of opening up the insurance and multi-brand retail sectors in front of French Minister for Economy & Finance Christine Lagarde, saying the liberalisation of these sectors was “very much” on the government’s agenda.
Lagarde responded by saying France would happily invest over euro 10 billion if these two sectors were liberalised.
Sarkozy insisted that friendship with India could not be described as a relationship with a “client state”. Analysts said France understood the importance of cultivating influence with a democratic nation whose stock markets were more up than down.
Sarkozy pointed out that France had hardly ever lectured India, right from the time of India’s nuclear tests in 1998 to the time in 2008 when Delhi wished to break out of the stifling confines imposed by the Nuclear Suppliers' Group.
Supporting India’s case for permanent membership in an expanded Security Council, Sarkozy added for good measure that France would also support India in “any nuclear body that it wished”.
Sarkozy’s willingness to bridge the chasm created in the wake of India’s insistence that the nuclear liability legislation will also hold the supplier of nuclear equipment and fuel responsible in case of a nuclear accident (and not only the operator) is significant because it breaks the western consensus, that also has Russia on board, that India’s law will dampen international enthusiasm to invest in India’s civilian nuclear sector.
With the PM and the President looking on, top officials of Areva and Nuclear Power Corporation of India signed two agreements on Jaitapur, thereby also indicating that New Delhi must have provided Paris with some assurance that common law, along with the recently passed nuclear liability legislation, would also prevail.
Underlining the value of the relationship, the PM said: “France is one of India’s most important and reliable defence partners. We deeply appreciate France’s willingness to supply us advanced defence technologies in a way that contributes to the modernisation of our own defence industry.”
Analysts said Sarkozy’s pragmatism is perhaps fuelled by the fact that French fighter jet manufacturer Dassault’s Rafale is in the race for India’s $10.6-billion order of 126 fighter jets.
On the civil nuclear front, Sarkozy’s decision to go ahead with the Jaitapur deal puts enormous pressure on other countries like the US and Russia, both of which have huge stakes in selling highly expensive nuclear power plants to India.
The Americans, followed by the Russians, have been most critical of India’s nuclear liability legislation. But if the French have buckled, then analysts point out that both the US and Russia would have little option but to follow suit.
In fact, Foreign Secretary Nirupama Rao’s statement in the wake of US President Barack Obama’s visit in November, which talked about a top delegation of US nuclear power manufacturers to soon visit India and find a way out of the impasse, is significant in this context.
Russian President Dmitry Medvedev is visiting later this month, when the first Russian nuclear power plant at Kudamkulam will be commissioned. Moscow’s troubling noises over subsequent nuclear cooperation with India are likely to become much feebler when confronted by the vigorous nuclear cooperation between India and France.
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