French investment in India over the next five years could rise to $3-4 billion, according to Indian Ambassador to France Ranjit Sethi.
The two contracts announced in India during the visit of French President Jacques Chirac are only a part of what is going on, Sethi said. Quite a lot more will materialise.
Following the visit, Sethi said, there is a clear signal from the political leadership that the French presence in India will be enormously strengthened.
What the French are saying is that they envisage a long-term strategic relationship with India on the firm conviction that India is going to be a major power, Sethi said in a telephone interview. The French have affirmed the global reach of India both politically and economically.
Present French direct investment in India is about $750 million. But some giant projects being negotiated between the Tatas and the French company Total would by themselves multiply investment significantly, Sethi said.
The French are particularly keen to invest sophisticated technology in water and waste disposal in India, Sethi said.
The visit by several leading business managers from France with Chirac is being followed up soon by a symposium by Lyonnaise des Eaux on investment in water resources in India, he said.
The symposium is being led by the influential Jerome Monod, president of the company and formerly director of Chiracs cabinet. General des Eaux, another company with sophisiticated technology for water resources, is also looking to invest in India, he said.
But India must consolidate the present atmosphere over the next year or two, Sethi said. What we can do with this now depends on us, he said.
The new ties between India and France go beyond business, Sethi said. The French chief of staff on his visit to India will be discussing cooperation on strategic matters, Sethi said. It is not just a commercial visit to sell weaponry.
There have been some rapid follow-up meetings since Chirac returned. A representative of the Confederation of Indian Industry has visited Paris to discuss the opening of a CII office.
Representatives of the Indian embassy have held meetings with members of French chambers of commerce to push business discussions to conclusive agreements.
But officials are cautious because the expectations of Indo-French business rose in 1996 only to collapse thereafter.
Following a political push to business relations, business agreements between companies from the two countries were significantly greater than in previous years. But in 1997 it all came down again.
The new impetus can work if we dont make the same mistakes again, Sethi said. But I dont think we will.