New Delhi: France, which has emerged as one of the closest strategic partners of India in recent years, is looking at bilateral business growth beyond defence by focusing on energy and technology, said an Indo-French trade body.
While defence has been a key element in bilateral trade, according to the Indo-French Chamber of Commerce and Industry (IFCCI), the share of aviation and aeronautics has fallen to 30 per cent in 2020, from 50 per cent in 2019.
However, it is not clear if the dip also includes the defence sector since the chamber does not maintain the numbers in that regard.
“Traditionally, it is true that a big chunk of Indo-French economic ties have been defence and aerospace. Now, we see a number of industries doing so well and coming into limelight, even if we take the last two years,” Payal S. Kanwar, director-general of IFCCI, told ThePrint in an interview.
She said there is an increased focus in the clean energy and digital sectors, and these are the fields where the French can offer more.
France is a significant source of FDI in India with more than 1,000 French establishments already present in the country.
According to the official figures, France is the ninth largest foreign investor in India with a cumulative investment of $9.67 billion from April 2000 to September 2020, which represents 1.93 per cent of the total FDI inflows.
The highest FDI equity inflows are in the services sector (19.22 per cent), with cement and gypsum products (10.05 per cent) in the second place, followed by air transport, including air freight, (8.13 per cent), petroleum and natural gas (7.70 per cent) and electrical equipment (5.74 per cent).
‘France is largest European employer in India’
Giving details of the new investments, Kanwar said these included Schneider Electric’s $2 billion acquisition of L&T’s electrical business, Total’s announcement of $2.5 billion in Adani Green Energy Limited, and French airport operator Groupe ADP carrying out a 49 per cent buyout of GMR’s airport business.
“Right now, in terms of French investment in India, it is currently about $9 billion, which has actually quadrupled in the last 10 years. France is also the largest European employer in the country with 3.5 lakh jobs with very few expats,” Kanwar said.
She added that what she sees at the chamber level is “expanded footprints within the country”.
“We see new plants, R&D centres coming up. French companies are quite bullish on India,” she said.
According to official figures, in 2020, the India-France bilateral trade stood at 9.04 billion Euros, a drop of 21.99 per cent as compared to the corresponding period of the previous year. This downfall could be due to the Covid.
India’s exports to France in the period were valued at 4.80 billion Euros, down by 22.9 per cent in the corresponding period. Indian imports from France decreased by 20.95 per cent to 4.23 billion Euros.
‘It is not going to be a cakewalk’
Kanwar said while companies do face challenges, the situation has improved under the Narendra Modi government.
“We all know it is not going to be a cakewalk,” she said, adding that GST was an issue for some companies, and customs and import duties for others.
Kanwar said the common issue was with regard to labour and land acquisition laws. However, the French industry welcomes the Modi government’s efforts to streamline these issues, she said.
(Edited by Debalina Dey)