India and France sign Rafale jet deal but talks on price still on

French companies to invest $10 billion in next five years, says French Finance Minister Michel Sapin

After the Pokhran nuclear tests of 1998, France proved to be India’s closest ally in Europe and was its original strategic partner. On Monday, Prime Minister Narendra Modi and visiting French President François Hollande (pictured) held talks that lasted over two-and-a-half hours to strengthen cooperation in a wide array of sectors, including defence and the nuclear energy sector, with the French promising investments by their companies into India to the tune of $10 billion over the next five years and India committing to purchase 36 Rafale fighter jets from France.

France also committed significant investments in the renewable energy sector, including euro 300 million for the projects to be taken up by the International Solar Alliance (ISA). Modi and Hollande also took part in the foundation laying ceremony of the ISA headquarters in Gurgaon.

Modi and Hollande also welcomed joint venture agreement between French Alstom and Indian Railways for 800 high horsepower locomotives to be manufactured in Madhepura, Bihar, and is likely to invite foreign investments of Rs 1,300 crore. The French will help with renovating of railway stations at Ludhiana and Ambala, and upgrading the Delhi-Chandigarh railway line.

The two sides upgraded their civil nuclear agreement. The French will now construct six nuclear reactors, up from the earlier two, at Jaitapur in Maharashtra.  France reiterated a lifetime guarantee of fuel supply to the nuclear reactors and the two sides agreed for increased localisation of technology in the nuclear sector. The two leaders asked their respective companies to set deadlines for constructing of the rectors.

New Delhi in turn promised to purchase 36 Rafale fighter jets in flyaway condition from France. However, no agreement could be reached on the price of the fighter jets. Modi and Hollande said the financial issues “must be resolved as soon as possible”.

BONJOUR INDIA

• India, France inked 14 agreements
• France to invest $10 bn in India in next 5 years
• Signed MoU on India purchasing 36 Rafale fighter jets
• France to invest euro 300 mn to support International Solar Alliance
• French EDF EN & India’s SITAC to invest euro 155 million in climate change technology by end-2016
• France to help construction of 6 nuclear reactors at Jaitapur to fix timeline
• French Alstom, Indian Railways JV to produce 800 electric locomotives in Madhepura, Bihar
• French firms to help develop Chandigarh, Puducherry and Nagpur as smart cities
• India’s Oceansat-3 satellite to host French Argos-4 payload
• India-France space agencies to develop  thermal infrared earth observation mission
• France to partner in Isro’s next Mars Mission
• MoU for industry-sponsored PhD fellowship between IIT-Mumbai & Thales  Systèmes Aéroportés

Hollande is on a three-day state visit to India, and will be the chief guest at Republic Day Parade on Tuesday. Today, Modi and Hollande held restricted talks for more than an hour, followed by delegation level talks that lasted over 90 minutes, at New Delhi’s Hyderabad House. The two sides signed as many as 14 agreements in defence, railways, renewable energy, cultural exchanges and urban infrastructure sectors. These agreements were in addition to the 16 inked on Sunday in Chandigarh. French companies will also help India in building Chandigarh, Nagpur and Puducherry as smart cities.

At a separate event on India-France business session organised by industry body Ficci, French Minister for Finance and Public Accounts Michel Sapin said: “Over the last five years, French companies invested more than $1 billion per year and we estimate that they will continue to invest at least $10 billion in next five years. French companies represent 10 per cent of solar capacity installed in India and by 2020-22, they could add additional capacities.” Sapin said France is the third-biggest foreign investor in India with an investment stock of $20 billion and there are more than 400 French companies present in India. “The majority of these investments are meant for the industrial sector. This makes France a major player in Prime Minister Narendra Modi’s Make In India programme. This complementarily can also been seen in the context of other programmes of the Indian government,” Sapin said. Foreign Secretary S Jaishankar said the two sides also explored cooperation in high-speed railway. India and France also expressed “strong commitment” for early resumption of stalled negotiations for the proposed free trade agreement between India and the European Union.

The two also pledged to explore new avenues for cooperation to strengthen exchange of information to prevent offshore tax evasion. The two decided to strengthen their security cooperation, particularly in view of the recent terror strikes in France and in India. They decided to extend by another 10 years their defence cooperation agreement and agreed that they should conduct more joint defence exercises.