France bets big on India, seals defence deal

France, one of better performing economies amid the eurozone recession, is betting big on India’s growth prospects as it concluded a $6 billion defence deal and voiced confidence about sealing an India-EU free trade deal by April this year.

French President Francois Hollande, who is on his maiden visit to India, held wide-ranging talks with Indian Prime Minister Manmohan Singh in the Indian capital Feb 14, and promised to take the burgeoning relationship to “yet another stage.”

After the talks, Hollande underlined “the same values and principles” of democracy and freedom that underpin the broad-based relationship encompassing civil nuclear cooperation, defence, trade and space. The French president said India was the world’s largest democracy not just by its people but by its diversity. “Both care for independence, and autonomy.”

France, one of the early backers of India’s global nuclear rapprochement, also underscored mutual commitment to an early implementation of the Jaitapur nuclear plant.

“France and India want to build on their civil nuclear energy cooperation,” he said, adding that both countries also want to take forward their ties in space, education and culture.

Amid ominous forecasts and threats of downgrade by international rating agencies, the French president was quick to repose faith in the India growth story and promised to push the envelope of economic ties. France wants to have “even more trade and in more fields” with India, he said while singling out transport, railways, trams, sanitation and water, as new focus areas. “France has to prove that it is of service to the Indian economy”, he said.

There was a burst of optimism on the dragging India-EU trade deal, with the two countries saying that they expected the broad-based trade agreement between India and the European Union to be signed by April 2013. The deal, say analysts, could have a force-multiplier effect on economic relations between India and the 27-nation EU, which is New Delhi’s largest trading partner.

Seeking to infuse fresh energy in their bilateral ties, the two countries also inked agreements in the railway sector, a cultural exchange programme, a letter of intent on intensification of cooperation in the fields of education, higher education and research and a statement of intent for long-term cooperation in space.

Manmohan Singh was all praise for France and described the European country as “one of its most valued strategic partners” and underlined that the bilateral relationship is “defined by the breadth and diversity of our cooperation, as well as by the intensity of our dialogue”.

The showpiece of the Feb 14 talks was the conclusion of negotiations on a $6 billion deal for co-developing a short-range air defence system.

“Both sides noted the ongoing progress of negotiations on the Medium-Multirole Combat Aircraft (M-MRCA) programme and look forward to their conclusion… steps are being taken for finalisation of the Short-range Surface to Air Missile(SR-SAM) project,” said a joint statement.

“Discussions on the M-MRCA contract are progressing well. We have also concluded negotiations on the SR-SAM, which, once approved by the government, will be co-developed and co-produced in India,” Manmohan Singh said.

“There is a welcome shift from defence trade to co-development and co-production of advanced defence items in India, which will help expand our domestic production base and strengthen the India-France strategic partnership,” he said.

India has selected the French Rafale combat aircraft for the deal, which is expected to be over $10 billion.

Moving beyond civil nuclear cooperation and defence deals, India and France also agreed to deepen strategic content of their partnership by closely cooperating in combating terrorism and declared their resolve to work together for global peace and security.

“The leaders reaffirmed their continued interest to enhance bilateral cooperation which is an important pillar of their strategic partnership and reflects their common determination to work for global peace and security,” said a joint statement.

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