Since the foundational establishment of the Strategic Partnership in 1998, India and France have progressively demonstrated the strength of bilateral ties across a wide range of domains. The two-day visit of H.E. Mr Franck Riester, Minister for Foreign Trade and Economic Attractiveness of France, to India during 10-11 March 2022 demonstrated an intention of solidifying the partnership to a greater degree, particularly in the light of new challenges amidst the Covid-19 pandemic and a transitional world order.
A formal dialogue was held between Minister Riester and Shri Piyush Goyal, Hon’ble Minister of Commerce and Industry, involving a review of the current trade and investment situation as well as a deliberation on improving ease of doing business parameters between both the countries. At present, France is the 11th largest foreign investor in India with cumulative foreign direct investment inflows of $ 10.06 Bn for the period April 2000 to December 2021. To provide a boost to a relationship still robust in a world fraught with challenging economic issues, it was discussed that arriving at a mutual agreement to work in tandem to reform the world trade system and reshape vulnerable supply chains in a post-pandemic era was paramount. Along similar lines, the two Ministers also touched upon ongoing talks on an India-EU free-trade agreement and negotiations at the World Trade Organisation on cutting harmful fisheries subsidies and improving access to Covid-19 vaccines.
On the commercial front, French businesses have integrated deeply with the Indian industry. In FY 2020-21, bilateral trade stood at $ 9.12 Bn and has increased to $ 9.87 Bn during the period April 2021 – January 2022. Minister Riester’s meetings with key Indian business leaders, including site visits to the manufacturing and R&D centres of two major French companies and an Indian electronics company based in France, afforded an opportunity for both sides to exchange inputs on how Indian companies could expand their commercial presence in France. He provided a snapshot of President Emmanuel Macron’s $ 35 Bn “France 2030” investment plan, unveiled in October 2021, to boost industrial activity amid growing international competition. Minister Riester also recognized the outstanding achievements of Indian and French companies in India at the latest edition of the Business Awards hosted by the Indo-French Chamber of Commerce and Industry, as well as acknowledging young French achievers working in French companies abroad.
Given India’s strong capabilities in the sectors covered in the “France 2030” roadmap and the shared goal with France to boost its strategic domestic autonomy, Indo-French cooperation in key industrial sectors will only rise to a greater peak. The varied series of production-linked incentive (PLI) schemes introduced by India aligns with this broader, common objective to massively enhance domestic manufacturing capabilities and draw foreign investment in key sectors of importance into the country.
In every sectoral area of cooperation, India has demonstrated the importance it commands in playing a key part in the bilateral endeavour of securing domestic and regional supply chains. These include not just the traditional sectors of defence and aviation, pharmaceuticals, information technology, food processing and so on, but also encapsulate emerging areas of cooperation in the blue economy and ocean governance, as a few examples. Minister Riester’s comments that seeking “co-localisation of production” with India as a priority is a statement indicating urgency to take steps for ensuring a more diversified and stable Indo-Pacific and global periphery. These points arise amidst a backdrop of impending crises, economic recessions, and trade disruptions. Building on the historical foundation of a strong relationship, now more than ever, France looks to India as a long-term trade and investment partner with which it can forge novel partnerships in new domains and in new decades to come.
This article has been authored by Ranjana Prasad.