GTRI Brief

24-01-2024

President Macron's Visit to India: Likely discussion issues

The upcoming visit of Emmanuel Macron, President of France, to India as the Chief Guest for the Republic Day celebrations is a testament to the enduring and multifaceted relationship between the two nations.

India and France share a commitment to strategic autonomy, security, and defense, alongside a robust economic partnership.

This visit is expected to provide an impetus to various domains of mutual interest, ranging from defense cooperation to economic ties, and from energy collaboration to space and nuclear partnerships. The discussions will likely pave the way for new agreements and deepen existing cooperation, reflecting the dynamic and evolving nature of the India-France strategic partnership.

A-Likely discussion issues:

1. Indo-Pacific Cooperation: India and France are likely to discuss their mutual concerns about China's assertiveness in the region. Key points could include maritime security, freedom of navigation, and collaboration within the Quad grouping (comprising India, the US, Japan, Australia).

2. Counterterrorism and Defense Cooperation: France has emerged as India’s second-largest arms supplier after Russia over the past decade. Notable collaborations include the induction of French Scorpene submarines and Rafale fighter jets, joint military exercises (such as Varuna, Garuda, and Shakti), and joint manufacturing initiatives (such as the Tata Group's tie-up with Airbus for C-295 tactical transport aircraft). The discussions may include counterterrorism, intelligence sharing, and defense technology transfer. France's role as a major arms supplier to India, notably the Rafale fighter jet deal and submarine cooperation, will be highlighted.

3. Bilateral Trade and Investment: France, as India's 8th largest trading partner, aims to strengthen trade and investment ties. Both countries are negotiating an FTA (India-EU FTA) to further expand the relationship. They may discuss market access, intellectual property rights, and investment facilitation and ways to expedite negotiations considering India has almost finalised FTAs with UK and Switzerland.

4. Clean Energy and Climate Change: Potential collaboration in renewable energy, green hydrogen, and sustainable infrastructure development, underscoring their commitment to combating climate change.

5. Global Governance and Multilateralism: The two nations support reforms in international institutions like the UN and WTO. Discussions may focus on enhancing multilateral cooperation on global health, food security, and climate change.

6. Space Cooperation: The growing space partnership between India’s ISRO and France’s CNES, including joint missions and technology transfer, will likely be a topic of discussion

7. Civil Nuclear Cooperation: After India's nuclear tests in 1998, France was the first country to start a Strategic Dialogue with India, choosing not to impose sanctions like other nations. In 2008, India and France signed a civil nuclear pact, with France becoming the first country after the USA to do so. Under this agreement, France is helping India build six European Pressurized Reactors (EPR) for nuclear power at Jaitpur in Maharashtra. Expanding the use of nuclear power generation may likely be a topic of discussion

B-Bilateral trade and economic relationship:

The economic relationship between India and France is marked by significant business presence, trade, and investment.

Over 1,000 French companies operate in India across various sectors like manufacturing, services, and technology, while more than 200 Indian companies are established in France.

Bilateral Trade: In the fiscal year 2023, the bilateral trade between India and France reached $19.2 billion.

India's merchandise exports to France included Diesel ($707.9 million), ATF ($405 million), Turbojets ($496 million), Apparels($850 million), Footwear ($157 million), Smartphones ($248 million), Gold Jewellery ($160.5 million), Airplane parts($158 million), Medicines ($447.8 million), Organic chemicals ($364.5 million), totaling $7.6 billion.

On the other hand, India imported items worth $6.2 billion from France, including planes, Planes, Helicopters, and/or Spacecraft ($2.1 billion), LNG ($400 million), Navigation Equipment ($102 million), Turbojets, Gas Turbines ($442.2 million).

In the domain of services, India exported financial, IT, maintenance and repair, travel, transport, and other business services worth $3.2 billion to France, while importing services such as other business services, transportation, and insurance, amounting to $2.2 billion.

Investment-wise, France ranks as the 11th largest investor in India, with a cumulative Foreign Direct Investment (FDI) inflow of $10.5 billion from April 2000 to March 2023. This diverse and robust economic engagement underscores the strong bilateral ties between the two nations.