France looking to invest over 10 bn Euro in India by 2012

France today said it proposed to invest over 10 billion Euros into India in next two years if multi-brand retail and insurance sectors were liberalised even as New Delhi said they were "very much" on government's agenda.

"..FDI cap on insurance and multi-brand retail is very much on the agenda," Planning Commission Deputy Chairman Montek Singh Ahluwalia said in the presence of French Minister of Economy and Finance Christine Lagarde who is part of the delegation accompanying President Nicolas Sarkozy.

Addressing the India French Business Forum, organised by FICCI, Ahluwalia said, "As far as insurance is concerned, the government has initiated the Parliamentary process to create a legislation to go for 49 per cent FDI in the sector."

At present FDI up to 26 per cent is allowed in the insurance sector.

Lagarde said investment from French companies can go beyond 10 billion Euros by 2012 if sectors like insurance and multi-brand retail are liberalised by India.

"There could be a lot more than that for sure, if it was possible to develop activities in insurance and retail," she said adding "if the Indian authorities consider it sensible to open up the sectors, I know French companies will significantly expand their activities."

She said, "Everything is about give and take and two-way street."

On the French demand for increasing the FDI in insurance, Ahluwalia said that the UPA was a coalition government and it was important to build a consensus among its constituents.

"There is a  coalition, you need to keep everybody happy (in Democracy). So, I am optimistic on the insurance front," he said.

On FDI in multi-brand retail, he said, several ministries have supported the proposal for allowing FDI in the sector.

The government has already put out a discussion paper on the politically sensitive subject.

The Joint statement issued after talks between Prime Minister Manmohan Singh and Sarkozy said the two governments are committed to more than doubling their trade by 2012 to 12 billion Euros from the level of 5 billion Euros in 2008.

The areas of investment and trade include automobiles, electrical equipments, rail transport and water utilities.

It said France and India recognised the importance of agriculture and food processing sector for ensuring affordable food production in both the countries.

In his statement Singh said that India would work closely with France to push forward the global economic recovery and better regulation of the international financial sector.