Relations > Economic and Commercial Ties

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The Indo-French economic exchanges are poised for rapid growth and have acquired increasing importance in the overall bilateral relationship. The bilateral trade increased by almost 68% over the decade of the 90s, to reach a turnover of FF 13.17 billion by 1999, and in 2000 crossed the FF 15 billion mark for the first time. The balance of trade has been in India's favour since 1994. In 2002, the overall bilateral trade was Euros 2.46 billion, with a trade surplus of about Euros 457 million in India's favour. In the year 2003, French exports to India remained at about €1000 million and the Indian exports at €1477 million. French exports to India comprise mainly electrical equipment, organic chemical products, aeronautical & space construction products, mechanical equipment, general & special usage machines, and pharmaceutical products. Indian exports to France consist of a wide range of goods and services spread over a large base of Indian companies, especially from the small and medium sector. While traditional items such as garments, leather, textiles, raw cotton and yarn, and marine exports constitute a major share of India's exports to France, a number of newly developed non-traditional items such as automotive components, electronic and rubber components, chemicals and dye-stuffs, pharmaceuticals, granite, and consumer durables are showing promising growth. France has also emerged as one of the prominent investors in India, and French investments (approved) in India, which were a negligible Rs.193.3 million in 1991, had grown to Rs.65,754 million by March, 2003. Both approvals and actual inflows have grown over the past few years, and French investors continue to exhibit a high degree of interest, particularly in the key sectors of power, hydrocarbons (petroleum and petroleum products), telecommunications, auto-components, agro-industries, drugs & pharmaceuticals, and environmental initiatives like water management technologies.

Both countries are actively engaged in providing impetus to the economic relations by identifying various areas where untapped complementarities hold forth the promise of further growth. France and India have instituted agreements to provide protection to bilateral investment from each other, and also to avoid double taxation. Apart from meetings of the high-level Joint Economic Commission (the 12th Session of which was held on 4th November, 2003 in Paris), which provides guidance for the overall economic relationship, institutionalised, sector-specific consultations take place at regular intervals between the two governments to facilitate cooperation in areas like Energy, Telecommunications, IT, Mining, Roads, Urban Development, and Agriculture. In addition, there are increasingly active interactions between the Commerce and Industry Associations of the two countries and between individual companies.

The 12th Session of the Indo-French Joint Committee on Economic and Technical Cooperation was held in November in Paris. Mr. Arun Jaitley, Hon'ble Minister for Commerce and Industry and his counterpart headed the two delegations and exchanged views about multilateral and bilateral issues of mutual interest; both sides addressed several issues concerning bilateral trade relations, bilateral financial relations and market access, reviewed the functioning of the Joint Working Groups and agreed to take measures to promote investments and bilateral trade. An MoU was signed on cooperation in the fields of agriculture, fisheries, rural development, forestry and food industries. Mr. Jaitley also addressed French companies and business associations at "Invest India" Seminar which was attended by a CII-led CEO delegation from India. Joint Working Group on Posts and Mineral Development met this year (2003), in addition to the new JWGs on Roads and Urban Development which were formed during 2003, to foster bilateral cooperation in the respective sectors. A Cooperation Agreement between the Indian Railways and the French Railways (SNCF) is expected to be signed soon.