India Inc India Inc: Tuesday, 08 May 2012 15:08

Straight Talk with Ridhika Batra - Would the switch from Right to Left change the Centre?

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A decade ago when the Republican government in the US thought of enhancing relations with India, it made energy efficiency the platform and packaged it in a civil nuclear deal with India. Years later, the Democrats are still on the agenda of ironing out the issues around civil nuclear trading but the importance of strong ties with India has not diminished.

On almost a similar time-line, when the Labour government in the UK decided to have stronger ties with India, it firmly supported the India-US civil nuclear deal and even suggested distancing civil nuclear development from military nuclear development to further negotiations with the US. Likewise when its Conservative successors decided to enhance relations with India, the idea was given a special mention in the Queen’s Speech in Parliament. The Cameron cabinet is still rigorously on the job of shaping this ambition.

Equally eager was the center-right Sarkozy government in 2008, when France and India signed a treaty on developing trade in nuclear technology. Areva, the French power company, is now constructing two EPR reactors, the first of a series of six and also working on providing nuclear fuel for the next 25 years.

Although I have reason to believe that this might not be the case necessarily, with the move from right to left at the Elysee Palace, it remains to be seen if the shift in the goalpost would necessarily mean a shift in goal ‘India’ too.

My above description has two colliding thoughts. Firstly, all three countries have had an ideological shift in their governments relatively recently. Secondly, the former two are still optimistic on India, while the latter has a good reason to continue the same given President-elect Francois Hollande’s predecessor has set the stage for positive collaborations with India.

In the past, Monsieur Hollande has already exhibited his choice of wisdom over his party ideology when in the early 1980s he went to work for Mitterrand, helping him nationalise companies. A decade later, he helped Prime Minister Lionel Jospin sell them to help the Socialist government cut its debts to join the euro.

His election campaign has pressed on issues of non-austerity and would instead focus on growth prospects for the country and for the EU in general. It won’t be taxing to say that growth would be possible only with a balanced implementation of protecting domestic interests and simultaneously engaging with the outside world, most importantly with the emerging markets – India being one of them.

Therefore, there may be a few amendments in rules of engagement but it wouldn’t stall the prospects totally.

There are several ongoing industry collaborations between India and France, which seem to be producing positive bilateral trade results – like that of Areva in energy sector and the recent acquisition of NAPC, a Tamil Nadu based infrastructure company active in roads and civil engineering, by French company Eurovia – a VINCI group subsidiary and one of the leading players worldwide in the construction, upkeep and maintenance of road and railway transportation.

Besides, France and India also have strong ties in the area of space research. The recent successful launch of Megha-Tropiques, a mission to study the water cycle in the tropical atmosphere in the context of climate change, is a joint satellite project between India’s ISRO & France’s CNES.

Of course, in the recent defence collaboration between the two countries, India’s preference to buy Rafael, the French twin-engine fighter aircraft designed and built by Dassault Aviation, is well documented.

The Indo-French Universities collaboration is also an added element that promotes relations between the two nations.

The trend in Indo-French relations is more of joint ventures and M&As rather than cheap outsourcing services. Therefore, it would be safe to say that this partnership is expected to be long-term and mutually beneficial.

However, it is still early days to ascertain what Monsieur Hollande will bring to the table. Will he be maintaining the growth agenda, which is ‘central’ to his existence, or would he be inclined towards looking inwards?

Ridhika Batra is the London-based Director of the Federation of Indian Chambers of Commerce and Industry (FICCI) for the UK and France.

*The views reflected in this column are personal.

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