French Companies See Opportunity in India as Modi Meets Macron
As the two leaders meet at the G7 Summit, it is heartening to know the Indo-French relationship is gaining momentum.
As Prime Minister Narendra Modi arrives in France to attend the G7 Summit on the back of his meeting with the French President Emmanuel Macron last week, it is heartening to know the Indo-French bilateral relationship is gaining momentum.
Both nations have had strong ties for decades, and in particular, since the signing of the strategic partnership in 1998.
PM Modi and President Macron share a special bond which has manifested itself through their joint commitment on a number of issues such as anti-terrorism, climate change, defence and security, and energy.
India stood firm with France during the Paris Agreement at the COP21 which was reinforced by PM Modi’s decision to set up the headquarters of the International Solar Alliance in India.
Likewise, France has been a big supporter of India on several fronts, especially in backing India’s bid for a permanent seat at the United Nations Security Council, which is a key priority in the current geopolitical context.
In terms of investment, the two way trade stands at 16 billion euros and a commitment has been made to increase this over next few years.
French Companies Make Strides in India
Today, we see that French companies have a strong presence in India and for new entrants, India is the priority investment destination. A major indicator of this is that 38 of France’s largest, publicly traded companies on the Euronext Paris (CAC 40 as they are called) have operations in India.
Some of these companies, like the banking giant BNP Paribas and railway company Alstom go back to more than 150 years of business.
French investments in India are booming and are well spread out across diverse sectors from defence and aerospace (which represents a major chunk of investments) to energy, urban infrastructure, consumer goods and so on.
India is also an important technology hub – the French Tech Community – was recently inaugurated in Bengaluru, which has been identified as one of 48 international communities of the French Tech movement.
Currently, about 600 French companies have established their presence in the country and employ close to 350,000 workforce.
New Investments, New Milestones
The IT major Capgemini is the largest French recruiter with a little over 1,00,000 employees across the country. French companies are committed to investing and innovating in India and 25 companies, including Michelin and L’Oreal, have set up their Research and Development centres here.
We have also witnessed some new investments in recent times such as the entry of carmaker Peugeot setting up a plant in Tamil Nadu, with the first car model to hit the market in 2020.
On the acquisitions side, Schneider Electric recently concluded a two billion dollar takeover of Larsen and Tubro’s electrical business, making India its third largest country of operation globally.
Prime Minister Modi’s ‘Make in India’ campaign is not a new notion for French companies, with several large and mid-sized firms having their manufacturing facilities here for decades.
India represents an important market for manufacturing with the availability of ample resources, a rich talent pool, skilled labour and favourable market conditions.
Alstom recently rolled out its 100th metro train set manufactured locally and this milestone shows the company’s commitment to India and its capability to deliver world class solutions.
Other companies with a prominent presence in India include Accor Hotels, Decathlon, Airbus, Safran, Pernod Ricard, Veolia, Engie, Ubisoft and CMA CGM. The list is vast.
Defence Ties Grow Stronger With Rafale Jets Coming Soon
As stated above, Indo-French cooperation in defence is an important pillar of our bilateral relationship. France led a 49-member defence and aerospace delegation (by far one of the largest) to the Bangalore Aero India show earlier this year.
India will also receive the first of the 36 Rafale jets next month, following the inter-governmental agreement which was signed in September 2016.
The Indo-French Chamber of Commerce and Industry (IFCCI), which is the official bilateral chamber of commerce between France and India, is playing a pivotal role in building business cooperation between both countries.
We support more than 100 new French companies in their India entry or expansion plans each year. Moreover, we organise several roundtable meetings both with the Central and state governments to create a dialogue between industry and government.
For example, some of the prominent ones this year include meetings with authorities like Ramesh Abhishek, Secretary, DPIIT to discuss the Ease of Doing Business, Pawan Aggarwal, CEO of FSSAI to discuss food safety standards, Subhash Desai, Industries Minister, Government of Maharashtra to discuss Make in Maharashtra and so on.
The aim of these interactions is for French investors to talk about their project and expansion plans in India and seek clarifications or put forward certain recommendations.
I strongly feel that Indo-French bilateral political and economic ties are at an all-time high and can only see this becoming stronger in the next ten years.
(Payal S Kanwar is the Director General of Indo-French Chamber of Commerce and Industry (IFCCI). You can reach out to her at @payalskanwar).
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