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Sarkozy courts Indian business, G20 support

New Delhi, December 6, 2010

France's President Nicolas Sarkozy said on Monday he had clinched deals worth about $20 billion with India, becoming the latest among a string of  world leaders jostling for a share of Asia's third biggest  economy. 

The business deals, which spanned atomic energy, defence  and civil aviation, comfortably bettered the $10 billion US  President Barack Obama secured on his November visit. They  come a day before Sarkozy is due to end his four-day visit.

Chinese premier Wen Jiabao and Russian President Dmitry  Medvedev are also due to visit India this month, a sign of how  major powers are vying for the world's biggest new defence and  power markets, long closed to outside investors.

India is trying to boost its power generation capability  and defence, wary it is falling behind China.      Sarkozy also called for a joint proposal with India to  push his ambitious reform agenda for the G20 group of  developed and emerging nations, including changes to the  global monetary system and commodity prices.

'France considers that no big-item problem in the world  can be solved without India participating at the highest  level. India is a major economy, we came to visit India as a  partner,' Sarkozy told a joint press conference with Indian  Prime Minister Manmohan Singh.

India, a member of the BRIC group of rapidly developing  countries, is forecast to see economic growth of almost 9  percent this year, with the economy accelerating further in  following years, levels rivalled only by China.

Investors are also keen to tap into a country with a young  and fast-urbanising population of 1.2 billion.

But like every foreign investors, the French must  negotiate a series of regulatory problems and Indian politics.

The government is currently mired in a string of corruption  scandals that have tarnished India's image as an investment  destination.

France and India signed a framework contract for the sale  of at least two French atomic reactors by French nuclear group  Areva, estimated at around 7 billion euros ($9.3  billion). Work on the reactors will start next year.

France is competing with US and Russian firms for a  slice of India's civilian nuclear energy market, worth an  estimated $150 billion, after New Delhi signed a series of  civilian nuclear deals that ended its status as a nuclear  pariah.

France took over the chair of the G20 group of developed  and emerging nations a month ago amid the eurozone debt crisis  and rows over global trade imbalances and currency valuations.

'France also wants joint proposals with its Indian friends  within the framework of the G20 on the regulation of commodity  prices,' Sarkozy said.

'On also international monetary systems, on the matter of  financial mechanisms whereby we can help the poorest countries  develop and also on reforming world governance,' he added.

Deals, deals, deals 

European group Airbus has signed lease contracts  to supply A330 aircraft to India's Jet Airways and  Air India in separate deals totalling 2.8 billion euros.

French tyre maker Michelin will invest 600 million euros in a factory in southern Indian state of Tamil Nadu.

India and France are also close to signing deals for a 2  billion euro joint missile development and refitting the  Asian's giant's Mirage fighter jets at a cost of 1.5 billion  euros, a French government statement said on Monday.

Thales will upgrade the Mirage fighter jets and European  missile maker MBDA will develop the surface-to-air missiles,  the statement added.

India is spending $50 billion in the next five years in  defence deals, and is looking at new partners to replace  Russia, its Cold War ally.    

Sarkozy's visit comes before a summit between India and  the European Union where New Delhi's position on global  financial reforms is likely to be high on the agenda.

As US President Barack Obama did in November, Sarkozy  has pleased his audience with a pledge to support a  long-standing Indian demand for a permanent seat at the U.N. Security Council alongside France, Russia, China, Britain and  the US.

Indian officials have also given France 'reasons to be  confident' the two sides would reach consensus on India's  nuclear liability laws, a French source said earlier, which  have in the past made foreign firms, especially in the US, wary of entering the Indian market.

Areva CEO Anne Lauvergeon, who accompanied Sarkozy, said  she expected the French reactors to start producing power by  2018 and, while she did not see liability as an obstacle, said  'a number of points need to be clarified.

Sarkozy, who arrived in India on Saturday, is heading a  50-member French delegation of senior business leaders and  cabinet officials, including Finance Minister Christine Lagarde. – Reuters




Tags: India | Nuclear | Deals | Sarkozy | Obama | New Delhi | G20 | UN Security Council |

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