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Wednesday, December 08, 2004

The French court India 

It seems like the French understand the changing geopolitical balance of the world better than most other western powers. Katrin Bennhold reports in the Herald Tribune on how the French have been aggressively courting India and China, though this particular story focusses on India.

Since Chirac visited New Delhi in 1998, France and India have maintained a regular strategic dialogue, with the French leader never failing to mention India as one of the world's multiple poles, along with America, Europe and China. When most of the Western world expressed outrage at India's nuclear testing in May 1998, Chirac's response was distinctly moderate. Last year, he backed India's longstanding ambition to join the United Nations Security Council as a permanent member.

But economic ties have not matched the intensity of political sympathy between the two nations, a shortcoming that Loos says he wants to address during his talks in Bombay and New Delhi. As the ninth largest foreign investor in India, France ranks well behind the United States, Britain and Germany. French nonmilitary exports, worth €1 billion, or $1.34 billion, per year, account for only 1.2 percent of Indian imports, a share Loos wants to triple over "the next few years." The figure for total French exports is only slightly higher - 1.4 percent of Indian imports, according to the Indian Commerce Ministry. On the table for discussion are a host of deals across several industrial sectors, most notably a long-awaited sale of 43 Airbus A320 planes, worth about $2 billion, to Indian Airlines, and the sale of six military Scorpene submarines for $2.5 billion.

In some ways, India may become a more important economic partner for France than China in the long run, analysts say. India accounts for 20 percent of world software exports, and some of its high-technology and pharmaceutical companies have become global brands. "India is ahead of China in the sense that it has produced truly global brands," Loos said. "China hasn't." India is unique among developing countries with what Jaffrelot calls an "almost post-industrial" structure: The booming service sector now accounts for half of gross national product, with manufacturing and agriculture each making up a quarter. Ten years ago, the share of services was only 38 percent. With its highly trained, English-speaking work force and sophisticated technological infrastructure, India has some advantages over China. "In the years ahead, India will be more important as a place of scientific research," Jaffrelot said. "If China will be the world's workshop, India will be its laboratory."