French Foreign Minister Fabius fast-tracks Indo-French co-operation
France and India need one another for two very different reasons. France is going through difficult days economically. Its high-cost economy, lower productivity, and soaring social welfare liability severely limit its ability to compete with a resurgent China’s low-cost driven foray into the global market for manufactured products. As France grapples with the twin problems, India offers a good market for its ultra high-tech capabilities. India, offers big scope, but at the same time, it insists on not the product alone, but its technology too. There has been a paradigm shift in India’s approach to high-tech imports. France has realized this, and is ready to walk the extra mile to meet India’s needs. Thus, a win-win relationship is evolving. Mr. Fabius’s visit has given a push to this evolving relationship.
France and India have been negotiating on two big-ticket deals. These are the import by India of the French Raffle fighter jets and French nuclear power plants made by Areva. Due to the massive value of these deals and the myriad techno-commercial issues involved in such commerce, the negotiations have dragged on for a unusually long time. The Foreign Minister Laurent Fabius came to thrash out the nagging issues so that the deals could go through. The deals, when concluded, will signal the development of sound strategic ties with France.
The French Foreign Minister has returned with some concrete hopes that the orders for Raffle fighter jets and the Areva nuclear plants will be signed soon. India, on its part, has struck a hard bargain to get the extra concessions on cost and technology transfer. India’s tecnolgical prowess will surely get a boost from these imports.
The two European Pressurised Reactors (EPR) being bought from Areva will have generation capacity of 1,650 megawatts of power each. If and when, the deals are inked, both sides can proceed to start negotiations for four additional reactors of similar capacities to be installed in the same cluster at the Jaitapur site in Maharashtra. An additional installed capacity of nearly 10,000 megawatts would go a long way to alleviate India’s chronic power problem.
The induction of the 126 Rafale fighter jets is critical for the Indian Air Force. It would bolster the IAF’s capacity to reinforce its dominance in the vicinity of the country.
The two sticking points for the Areva deal are the high generation cost of power and the liability clause India wants all nuclear suppliers to accept. It is hoped that Mr. Fabius’ visit would spur the efforts of the two sides to thrash out these problems. During the talks, India has insisted upon use of more indigenously produced components to lower costs and facilitate transfer of technology. Areva is the world leader in Light Water Reactor (LWR) technology. India would be highly benefited if this front line technology is offered by France.
Relationship with France will act as a pivot for extending India’s reach to other European countries. In the long run, a closer Indo-European partnership will further India’s commercial and political interests.