After establishing a strong partnership in defence, India and France are now aiming to significantly enhance trade and investment relations, particularly in clean energy, new technologies, and aviation. Prime Minister Narendra Modi’s arrival in Paris on Monday marks a step towards strengthening these economic ties.

Strengthening economic partnership

France has emerged as a key source of foreign direct investment (FDI) for India, with over 1,000 French companies already operating in the country. France ranks as the 11th largest foreign investor in India, with cumulative investments totaling $10.84 billion from April 2000 to December 2023.

During his visit from February 10 to 12, PM Modi will co-chair the AI Action Summit, bringing together world leaders and global tech CEOs to discuss a collaborative approach to AI for innovation and public benefit.

Additionally, Modi will visit the International Thermonuclear Experimental Reactor (ITER) project, where India is a member of a global consortium, including France, working towards harnessing fusion energy for sustainable development.

The two nations are also in discussions about small modular reactors to boost bilateral civil nuclear cooperation, aligning with efforts to promote green energy and combat climate change.

Advancing trade agreements

French Foreign Trade Minister Sophie Primas recently stated that France is eager for further negotiations between India and the European Union (EU) to finalize a mutually beneficial free trade agreement, which could expand economic engagement between the two regions.

On trade relations, Primas emphasized that while India and France have built a solid strategic partnership, the focus is now on expanding economic collaboration.

The Horizon 2047 Partnership, unveiled in July 2023 following talks between PM Modi and French President Emmanuel Macron, aims to enhance bilateral ties, particularly in trade and investment. As part of this effort, an India-France Triangular Development Cooperation Initiative is expected to be launched, and 2026 may be declared as the India-France Innovation Year.

According to Coumar Ananda, President of the Chambers of Commerce and Industry France-India, trade between the two nations remains below $20 billion, with most transactions concentrated in the defence and aerospace industries.

Defence cooperation and future projects

France has been a crucial partner in India’s efforts to develop a self-reliant defence industrial and technological base. Both nations are committed to co-developing and co-producing advanced defence technologies, including projects that benefit third countries.

Their longstanding cooperation in military aviation continues, with India welcoming the timely delivery of the 36 Rafale jets ordered from France. Looking ahead, both countries plan to expand their defence collaboration:

• Combat aircraft engine development – India and France will jointly develop advanced aeronautical technologies.
• Helicopter manufacturing – Industrial cooperation on the Indian Multi-Role Helicopter (IMRH) programme is being strengthened through a partnership between Hindustan Aeronautics Limited (HAL) and Safran Helicopter Engine, France.
• Submarine projects – The success of the Scorpene submarine (P75 – Kalvari) program under Make in India has encouraged further cooperation to develop India’s submarine fleet.
• Naval defence collaboration – A memorandum of understanding (MoU) has been signed between Garden Reach Shipbuilders & Engineers Ltd. (GRSE), India, and Naval Group France to jointly develop surface ships for both India and international naval forces.

Transitioning towards a low-carbon economy

India and France are also working closely to accelerate the transition to a low-carbon economy. Their joint efforts focus on three main objectives:

1. Meeting the growing energy demands driven by India’s urbanization and industrialization.
2. Enhancing energy security.
3. Achieving the United Nations Sustainable Development Goal 7 (SDG7) and meeting the Paris Climate Agreement targets.

The deepening India-France partnership goes beyond defence, expanding into key areas like clean energy, advanced technology, and sustainable development, paving the way for a stronger and more diversified economic relationship.