A foreign tour with slightly different goals

Foreign policy is easily the most successful area of Narendra Modi’s government, something in which the Prime Minister has himself played a significant role. Whether it is with big powers like the US and Japan, neighbours like Nepal and Sri Lanka, or Indian Ocean islands like Mauritius and Seychelles, Modi has reset Indian policy and deepened the strategic content of our relations with them.

Beginning April 9, he begins another foreign tour, but this time the goals are slightly different and they relate to the main item of his agenda- the economic transformation of the country. As he tweeted on March 26 “My France, Germany & Canada visit is centred around supporting India’s economic agenda & creating jobs for our youth.” Actually the agenda would be much more varied and complex involving not just trade and investment, but smart cities, climate change, energy security, education, skill development and so on.

But of course, in all three cases, there will be a substantial strategic content– France is a permanent member of the UN Security Council and which has been an important player in India’s nuclear and aerospace efforts and Germany is Europe’s de facto leader. As for Canada, not only is it an important source of uranium, it is the original home of India’s PWHR reactors. Equally, it has an important Indian diaspora which, in turn, yields substantial strategic content.

France, of course, is a major defence partner of the country and significantly, it was only on Monday that India launched the first of the six modern Scorpene class submarines that are being assembled by DCNS of France at the public sector Mazagaon Dockyards in Mumbai.

Currently, India and France are discussing a number of high profile defence purchases-2 Airbus 330s to serve as a platform for India’s indigenous AWACS project, 2 Airbus 330s which will serve as aerial tankers. The Indian Air Force will later get four more of each type. But the biggest deal that the two sides are involved in is for 126 Rafale fighters which is reported to be in the final stage of the negotiations. According to sources, all the issues relating to the technology transfer to HAL have been resolved and the real sticking point is the price escalation since the deal was finalised three years ago.

Decisions and actions on such purchases are not really part of the PM’s tour, but it would be surprising if they do not figure in the talks between the two countries, especially since the Indian goal now is to utilise all foreign purchases to kick-start its domestic industry. As part of the Rafale deal, for example, there would be an unprecedented level of technology transfer to manufacture 108 of the 126 fighters in India which would involve not just Dassault, the manufacturer, but over 700 smaller companies which supply components and sub-assemblies.

Another important component of the relationship relates to nuclear energy. France is one of the world’s leaders in nuclear reactor technology. The French company Areva is hoping to set up a 9,900 MW nuclear power plant for the Indian Nuclear Power Corporation Ltd at Jaitapur in Maharashtra. This will be one of the biggest projects of its kind in the world, involving 6 reactors and the government hopes that it will not only generate power, but significant civil works that will provide local jobs, along with giving a boost to the country’s medium and small scale industries which will provide smaller components for the project.

The economic component of Modi’s visit will be strongest in the case of Germany which remains Europe’s powerhouse. Modi will inaugurate the Hannover Trade Fair in which India is the partner country under the theme “Make in India.” Over 100 Indian CEOs will be attending the fair in which some 450 Indian companies are participating The Germans are keen to engage India in traditional areas of industry as well as areas like green energy, infrastructure, affordable housing, and the Clean Ganga project. The Make in India project is attracting a great deal of attention in Germany which is considered one of the leading manufacturing powers of the world.

The visit to Germany and France will give the Prime Minister an opportunity to discuss key political issues relating to Ukraine and the Middle-East. India is feeling the indirect impact of the Russian estrangement from Europe as this has led to closer strategic ties between Moscow and Beijing. India wants to keep a keen watch on the developments relating to the Islamic State because it could have implications in Afghanistan and Pakistan.

Modi’s visit to Canada will be the first bilateral visit by an Indian prime minister since 1973. This is yet another instance of the unique trail being blazed by Modi in the area of foreign policy. No doubt trade and commerce are important elements in the visit. But perhaps the more important factor that he wishes to exploit is the Indian diaspora in that country. That seems to be the message from his visits to the historic Khalsa Diwan gurudwara and the Laxmi Narayan temple in the Vancouver area.

On the economic side, hopes are centred on an early signing of the Comprehensive Economic Partnership Agreement (CEPA) which would facilitate Indian pharma and textile exports to Canada, as well as aid the freer movement of professionals. For its part, Canada is keen to push its financial services and telecom sector in India. It also has huge strengths in agricultural processing equipment and technology. Given the low levels of trade and investment at present, there is a huge area of potential growth in India-Canada relations.

Visits abroad are no longer a one-way street given the growing Indian investment in foreign destinations. For example, in France, there are as many as 110 Indian owned companies dealing with a range of products like pharmaceuticals, Software, Steel, Plastics, Railway Wagons, and Aerospace products. Canada’s investment in India in the last 15 years is just $ 550 million, compared to the $3.5 billion Indian investment there.

More than the nuts and bolts of investment, trade and commerce, what the three countries are keen to get a measure of is Modi himself who is considered the most interesting Indian leader of his generation. The rockstar quality of his foreign tours will be fully visible in the public event at the Ricoh Coliseum in Toronto whose 8,000 tickets have already been sold out.

(The writer is a Distinguished Fellow at Observer Research Foundation, Delhi)