by Arun S
As part of efforts to boost India-France trade & investment ties, French Minister of State for Industry Christophe Sirugue is on a three day tour to India beginning October 25. The focus of his trip is on developing bilateral industrial partnership under the “Make in India” initiative as well as on innovation & new technology.
In an interview to The Hindu, Sirugue termed the €7.87 billion deal for purchase of 36 Rafale fighter aircraft by India as a major strategic success, and said it will pave the way for an unprecedented strengthening of France-India technological & industrial cooperation. Besides, he said Alstom’s troubles in France owing to poor demand will not impact its India operations -- including implementation of the over €3 billion contract it bagged in November 2015 to supply Indian Railways 800 freight electric locomotives and carry out the related long-term maintenance. The minister also said in addition to defence, aerospace and nuclear energy, he sees strong potential in three rapidly growing sectors in India: urban development (including urban transport, renewable energy, water & waste treatment), food processing and healthcare. (Edited excerpts)
Q: An India-France joint statement in January had referred to the attractiveness of France for Indian investors, especially for leveraging French technological expertise & competencies. Which are the sectors in India where there is a demand for French technologies; and what are the problems being faced by French firms regarding transferring technology to Indian firms?
A: There are many solid reasons behind France’s attractiveness for Indian investors. France is the fifth largest economy in the world, and the second largest market in Europe. Around 25,000 foreign companies present in France employ more than 1.7 million people, and, every week, 19 foreign firms choose France for new investments, considering its skilled workforce, its excellent infrastructure and its central location in Europe.
French technology and know-how are renowned worldwide in numerous sectors. There is longstanding cooperation between our countries and our companies in sectors such as defense, aerospace and nuclear energy. Both sides have developed long-term partnerships. I also see strong potential in three rapidly growing sectors in India: (i) urban development – an area in which many French companies are already present and can offer innovative technologies in urban transport, renewable energy, water and waste treatment; (ii) the food processing sector, in which many of our specialized SMEs wish to establish themselves; and, (iii) healthcare, a competitive and technologically advanced sector in which France has much to offer.
Q: Can you share some details on cooperation between states / provinces of India and France?
A: Indo-French economic relations are ever-intensifying, at all levels, be they at the central, state or local ones. The union territories, states and local bodies are obviously key players with whom French companies are increasingly working. French companies are spreading their presence throughout India, especially in large metropolitan cities like Chennai, Bangalore, Mumbai, Delhi, Hyderabad and Ahmedabad. During my India visit, I made it a point to schedule a trip to Chennai, where I will be meeting companies that have been successfully established there: so, that includes Renault’s Kwid assembly plant and the Saint-Gobain research and development center.
Urban development, smart cities and renewable energy are particularly promising sectors. More than 60 French companies with recognized expertise are now operating in India. French authorities have organised more than twenty French companies’ delegations / roadshows in various Indian states and cities. During the State Visit of President François Hollande in January 2016, France entered into a preferred partnership with the cities of Chandigarh, Nagpur and Pondicherry with the view to offering them assistance and expertise on their participation to the Smart City mission.
Some French regions and cities have also entered into direct cooperation with Indian authorities, like the one between Bordeaux Metropole and the State of Telangana for Hyderabad city on various matters, such as aerospace, urban transportation, water and heritage management. Center Val de Loire has cooperation with Tamil Nadu since 2008. Similarly there is ongoing cooperation since 2011 with Region des Pays de la Loire, which has opened a permanent representative office in Chennai.
Q: Regarding the €7.87 billion deal for purchase of 36 Rafale fighter aircraft by India, what kind of technologies will the French industry transfer and develop with Indian defense labs? How will France / French firms help build capacity in India to make them part of the French global defense supply chain to execute the offset requirements?
A: The Rafale deal is a major strategic success that forms part of a longstanding and close defense relationship between our two countries, and paves the way for unprecedented strengthening of our technological and industrial cooperation. The offsets contract was concluded between French companies and Indian authorities, so I’m not in a position to provide you its details. They will define, together with Indian companies, how the required transfers of technology will be implemented. I believe they have already made good progress on this.
What I can tell you, though, is that the offsets will contribute to a soaring, solid and autonomous defense industry in India. France perfectly understands this quest for strategic autonomy, which is a goal that we ourselves have been pursuing since decades. We welcome our cooperation with India in implementing this.
Q: (French rail transport major) Alstom had bagged an over €3 billion contract to supply Indian Railways with 800 freight electric locomotives and carry out the related long-term maintenance. However, Alstom was in trouble recently as it had announced plans to halt production in Belfort (France), and the French state (which holds a 20% stake in the company) had to face criticism regarding a rescue package aimed at saving around 400 jobs. Will the multinational company’s troubles have any impact on its Indian operations and the $3 billion contract with Indian Railways?
A: Alstom and the French government recently held talks on the future of Belfort site, and more generally on the situation of Alstom’s different sites in France. The government, Alstom and stakeholders elaborated a joint plan which will preserve Alstom’s strong technological expertise on several segments of the railway market, in particular locomotives. Therefore, those talks will have no impact on Alstom’s operations in India, including the contract you mention.
Q: It was reported that France is aiming to be a major protein supplier by 2030 with plans to hike investments into ‘intelligent food’ from vegetable & animal sources. India had recently allowed 100 per cent foreign direct investment in marketing of food products produced & manufactured in India. Can you share some details on the proposed collaboration between India and France in food processing, food technology and retail industries?
A: French companies are also involved in Make in India in the food processing industry. Axereal, Bongrain, Danone, Lactalis, Limagrain, Pernod-Ricard, Roquette and Soufflet – to mention but a few – are all European or world leaders successfully established in India. These food companies are well aware of the advantages of investing in India: abundant agricultural supply at a low price, diversification of agricultural production which can be transformed, and the possibility of selling not only in the Indian market but also exporting to the Middle-East or Southeast Asia.
It is also well known that the French agricultural and food processing industries innovate constantly, be it in packaging, preservation methods, or nutritional aspects, what you called ‘intelligent food’. And this is done with the constant aim of adapting to consumer needs.
Regarding innovation and technologies, France is a leader in building world class equipment for food processing companies. In this domain, we have companies specializing in cold chain, packaging solutions and every food processing sector: dairy, bakery, meat, grains processing, fruit and vegetable processing. France is already involved in training Indian experts in the cold chain field. This is a partnership based on knowledge sharing and awareness of better technologies.
In a nutshell, the potential is indeed immense not only for the food processing groups, but also for equipment manufacturers for this industry. The Goods and Services Tax reform as well as the new FDI policy in this sector are certainly strong positive signals. It will definitely help attract more investments in India, and more innovations from French companies.
Q: France had welcomed India’s recent ratification of the Paris climate change pact. Will this lead to higher French investments in India’s renewable energy sector?
A: Our authorities have stated on many occasions how India played a driving role in the adoption of the Paris Agreement in December 2015. Prime Minister Narendra Modi’s decision to ratify the Agreement also helped accelerate its entry into force, which will take place on 4th November. Also, France supported India’s initiative on the International Solar Alliance, which will help attain the goals of the Paris Agreement by facilitating access to solar energy.
India has fixed the target of producing 40 per cent of its electricity from non-fossil fuels by 2030, while meeting its vast energy needs that are necessary for nurturing its economic growth. Prime Minister Modi’s impetus has already resulted in a remarkable development of Indian capacities in renewable, which today has attained 44 GW. France is, of course, ready to extend all assistance – and has already done so. Did you know that 10 per cent of India’s installed solar capacity is provided by French companies? The French Development Agency (AFD) was among the first to back this emerging sector via two credit lines extended to the Indian renewable energy development agency (IREDA).
French companies, which have recognized expertise and know-how in the renewable energy sector, are already present in the market and participate in tenders floated in this sector. Thus, we can anticipate a major increase in French investments in this area.