India-France Strategic Partnership
India’s Prime Minister Narendra Modi visited France on an official visit on 13-14 July 2023 and participated in the French Bastille Day celebrations aligning with the celebration of 25 years of Indo-French Strategic Partnership.
India and France celebrated their 25-year strategic partnership by unveiling the “Horizon 2047” roadmap. The roadmap focuses on areas of cooperation some old and some new. These areas are defence, space, nuclear energy, climate change, education, and people-to-people connections. The roadmap prioritizes collaboration in digital public infrastructure, critical technology, defence cooperation, civil nuclear cooperation, and space cooperation.
The roadmap for the relationship is built upon three pillars: partnership for security and sovereignty, partnership for the planet, and partnership for the people.
In 1998, during the visit of French President Jacques Chirac to India, the two countries signed a historic agreement to cooperate and collaborate in a number of areas leading to India-France strategic partnership. The strategic cooperation involved close cooperation in crucial areas such as defence, civil nuclear energy, space and security. It later added partnerships in Indo-Pacific matters. There are many other areas in which France and India have decided to work together. Both countries founded the International Solar Alliance during COP21, adopted the bilateral alliance on the Blue Economy & Ocean Governance in 2022 and agreed to cooperate in all aspects of sustainability.
While Prime Minister Modi visited France four times in the last nine years, the former French President Hollande has visited India twice, in 2013 and 2016 and President Macron has visited India once in 2018. And there have been innumerable ministerial visits between France and India and a large number of business missions. France and India have had excellent relations in the political, economic, educational and cultural spheres.
Economic Relations – India-France Strategic Partnership
France and India continue to have growing trade and investment relations in various economic sectors. There are close to 600 French companies in India with a turnover of around US$ 20 billion. France is among the 11th largest investor in India, with a cumulative investment of US$ 10.32 billion between April 2000 to June 2022. The highest FDI equity inflows are in the services sector (18.05%), with cement & gypsum products (9.29%) in the second place, followed by air transport (including air freight) (7.59%), miscellaneous industries (7.24%) and petroleum & natural gas (7.10%). These five sectors represent 49.27% of the total equity inflow from France from April 2000 to December 2022.
India’s Goods Exports to France in US$ billion
Most big French groups have their subsidiaries in India. There are also a few joint ventures and liaison offices of French companies in India. 39 of the 40 CAC 40 (French Stock Market Index) companies are present in India. Around 50-70 SMEs are also present in India essentially in the mechanical and pharma-chemical sectors.
French companies are present in a wide range of sectors: services (BNP Paribas, Capgemini, Havas, Sodexo, etc.); pharmaceutical-chemical (Arkema, L’Oréal, Sanofi, TotalEnergies, etc.); aerospace (Airbus, Dassault, Eurocopter, Safran, Thales, etc.); agro-food (Bongrain, Danone, Lactalis, Lesaffre, Pernod Ricard, etc.); electronics (Crouzet, Oberthur, Safran, STMicroelectronics, Thales, etc.); construction mechanics (Alstom, Cermex, Legris Group, Poclain, Sidel, etc.); electrical components (Hager, Legrand, Schneider Electric, etc.); automobile (Faurecia, Michelin, Plastic Omnium, Renault, Valeo, etc.)
India’s Goods Exports from France in US$ billion
Within the European Union, France holds a prominent position as India’s 5th largest trading partner. In the financial year (FY) 2023, the bilateral trade in goods between the two countries reached US$13.4 billion. Furthermore, the trade in services amounted to US$6.3 billion in 2021. India’s exports to France have witnessed steady growth with an average rate of 7.1%, increasing from US$4.9 billion in FY 2018 to US$6.64 billion in FY 2022. On the other hand, India’s imports from France have experienced a decline, decreasing from US$6.5 billion in FY 2018 to US$5.78 billion in FY 2022. This reversal in the trade balance has favoured India, highlighting a shift in the import-export dynamics between the two countries.
India’s primary exports to France encompass a range of goods, including engineering products, such as turbojets, generating sets, and diesel engine components, valued at approximately US$2,016 million. Ready-made garments contribute around US$672 million, while petroleum products like automotive diesel fuel and aviation turbine fuel also amount to US$672 million. Additionally, drugs and pharmaceuticals make up approximately US$560 million in exports, and electronics goods, including electrical transformers and circuitry parts, contribute a similar amount of US$560 million. In FY 2021, India’s major exports to France were mineral fuels, mineral oils, and products, such as bituminous substances and mineral waxes, amounting to a total value of US$ 812.29 million.
India’s Services Exports to France in US$ billion – India-France Strategic Partners
On the flip side, India’s major imports from France consist of aircraft, spacecraft, and associated equipment, valued at around US$ 2,576 million. Electrical and electronic equipment closely follow, with imports worth US$ 1,456 million. Machinery, nuclear reactors, and boilers represent approximately US$ 896 million in imports, while optical, photographic, technical, and medical apparatus account for US$ 504 million. Lastly, organic chemicals contribute approximately US$ 280 million to India’s imports from France. India’s imports from France in FY 2021 were primarily dominated by aircraft, spacecraft, and parts thereof, totaling US$ 2,146.54 million. This was followed closely by imports of nuclear reactors, boilers, machinery, mechanical appliances, and their respective parts, amounting to US$ 829.05 million.
France hosts over 150 Indian companies, including sub-subsidiaries, which collectively employ more than 7,000 individuals. Most Indian investments in France are concentrated in the information technology (IT) services, pharmaceuticals and biotechnologies, and hospitality sectors. Some of the reputed Indian companies with a presence in France are: Sintex Industries, Tata Group, Mahindra & Mahindra, Mahajan Group and Motherson Sumi, besides the IT companies like Infosys, Wipro, TCS, Cognizant, etc.
French Services Exports to India in US$ billion – India-France Strategic Partnership
Conclusion – India-France Strategic Partnership
Relations between India and France have not only been warm and friendly, they have been steadily growing in a number of areas. Technology has been one of the major focus areas between the two countries. Aerospace, defence, cybersecurity, sustainability, education and cultural relations have been the hallmark of collaboration. Irrespective of which political parties or leaders in both countries, the relations have always been positive and stable. The opportunities are infinite. Cultural interactions too have played a major role in defining the relationship.
The economic and commercial relations are an important component of India’s bilateral relations with France. The series of high-level visits in the commercial and economic field reflects the growing interest of both the governments in expanding trade between the two countries. France considers India as an important market for its products and is looking to increase the number of joint ventures and encouraging investments in and from India. France is a large manufacturing economy and India’s Make in India programme aims to boost Indian manufacturing, especially in high-tech areas. France has always been in the forefront of technological development and the partnership between the two countries is not only of mutual benefit, but a win-win situation for both countries.
About the Author
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VIJAY KUMAR VADDADI, India Entry & International Affairs
Mr. Vijay Kumar is an Industrial Economist with 35+ years of experience in Economic Analysis, Trade & Investment Promotion, International Business Strategy & Cross-Cultural Impact. A Post-Graduate in Economics with specialization in Industrial Economics and Economics of Transportation, Public Utilities & Social Infrastructure from the University of Bombay (1982). In 1984, he joined the Consulate General of the Netherlands in Mumbai as an Economic & Commercial Officer and continued his association with the Netherlands Government (NBSO) for over 30 years. At SAS Partners, he heads the Trade and Investment Promotion activities, supports organising programmes for international business delegations, curates knowledge reports, and market studies and also helps our international clients in understanding the Indian business landscape better. More articles authored by him can be accessed here. |
