Hol­lande vows to boost eco­nomic ties with In­dia

The Pak Banker - - MARKETS/SPORTS -

France's Pres­i­dent Fran­cois Hol­lande played down the prospects of a swift con­clu­sion to a drawn-out deal for New Delhi to buy 36 French fighter jets as he be­gan a three-day visit to In­dia Sun­day.

The in­vi­ta­tion for Hol­lande to be chief guest at In­dia's Re­pub­lic Day mil­i­tary pa­rade on Tues­day had raised ex­pec­ta­tions that the multi-bil­lion dol­lar agree­ment for the Rafale jets would fi­nally be sealed.

But on land­ing in the north­ern city of Chandi­garh, Hol­lande cooled talk that the con­tract was on the verge of be­ing signed, say­ing fur­ther dis­cus­sions were needed on a prior in­ter-gov­ern­men­tal agree­ment.

"We are go­ing to take an­other step on the road which we hope will lead us to In­dia's ac­qui­si­tion of the 36 Rafale jets," he told re­porters.

"In­dia needs them and France has shown that it has the world's best air­craft.

"The com­mer­cial con­tract can only come af­ter the in­ter-gov­ern­men­tal ac­cord... which will be dis­cussed dur­ing my visit."

In an in­ter­view with the Press Trust of In­dia news agency, Hol­lande said the even­tual deal would "pave the way for an un­prece­dented in­dus­trial and tech­no­log­i­cal co­op­er­a­tion" for the next four decades.

"Agree­ing on the tech­ni­cal­i­ties of this ar­range­ment ob­vi­ously takes time, but we are on the right track," he added.

Prime Min­is­ter Naren­dra Modi an­nounced in Paris last year that his govern­ment had agreed to buy the jets as In­dia looks to mod­ernise its Soviet-era mil­i­tary and keep up with neigh­bour­ing Pak­istan and China. The two lead­ers stepped into the long-de­layed deal af­ter tor­tur­ous ne­go­ti­a­tions over a much-larger agree­ment first signed with France's Das­sault Avi­a­tion in 2012 broke down.

A stick­ing point has been Delhi's in­sis­tence that arms mak­ers in­vest a per­cent­age of the value of any ma­jor deal in In­dia, known as the off­set clause.

Hol­lande be­gan his se­cond of­fi­cial visit to In­dia in Chandi­garh, which was de­signed by French ar­chi­tect Le Cor­bus­ier more than 60 years ago.

He and Modi were to stroll through Chandi­garh's renowned rock gar­den, with its sculp­tures made out of rub­ble from the city's con­struc­tion. The French leader, who is trav­el­ling with a num­ber of se­nior cab­i­net min­is­ters and a large busi­ness del­e­ga­tion, will also ad­dress a fo­rum of In­dian CEOs along with Modi in the evening.

In a Tweet, Modi said he was "hon­oured & de­lighted" to host Hol­lande and pledged to "build on the ground cov­ered dur­ing our pre­vi­ous in­ter­ac­tions".

On Mon­day, the lead­ers are ex­pected to an­nounce a roadmap for build­ing six French nu­clear re­ac­tors in western Maharashtra state, more than five years af­ter a bi­lat­eral civil nu­clear co­op­er­a­tion agree­ment was signed, ac­cord­ing to me­dia.

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