Economic emergency at home, France needs India more than India needs France

New Delhi: French President Francois Hollande has arrived in India to be the chief guest for the 66th Republic Day, at a time his county is facing an unprecedented terror threat and economic crisis. The home grown Islamic State terrorists have put France on the edge by launching dastardly attacks across the country. At the same time, France is also facing a huge economic crisis.

Its unemployment rate is getting worse by the day and the growth is hitting the bottom. Five days before he left for India, Hollande was forced to declare economic emergency in the country. It clearly shows that France is not in a position to help Indian economy in a big way. He is actually eyeing the Rafale jets deal which can help him revive the bankrupt company to some extent. After his arrival in Chandigarh on Sunday, Hollande played down the prospect of a swift conclusion to a drawn-out deal for New Delhi to buy 36 French jet fighters as he began his three-day visit.

According to 'International Herald Tribune', 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 after landing in Chandigarh, Hollande cooled talk that the contract was on the verge of being signed. He said 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," Hollande 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," he added.

While Hollande said he was "optimistic" about the inter-governmental accord being agreed on Monday, a senior French official acknowledged negotiations were still snagged on the price.

However, some leaders of Indian Industry are very optimistic about the outcome of the visit. FICCI president Harshvardhan Neotia, in an article in 'The Hindu Business Line', writes that India and France may well have found their next big common meeting ground in 'Surya Namaskar'. No, we are not talking of yoga but the path-breaking international solar alliance of over 120 countries that Prime Minister Narendra Modi has launched along with French President Francois Hollande at the Paris COP21 climate summit.

He added that there were other promising areas of engagement which could be taken forward during President Hollande's visit as the Republic Day chief guest.

Meanwhile, the solar alliance demonstrates climate justice in action and can be a true game-changer. This holds true even in the context of the bilateral engagement between India and France. Most large French companies are now present in India, leading to a huge growth of French investments aimed at the Indian market, as a consequence of 'Make in India'.

Most French investors have R&D centres in India, which not only work for the Indian market but also the global one. The French have made 'Swachch Bharat Abhiyaan' a priority in the bilateral engagement. More recently, the terror attacks in France have united both people as never before.

The stage is set for a paradigm change in the structure and content of the strategic cooperation in areas like defence. Scorpene submarines are already under construction at the Mazagon Dock Ltd (MDL) in Mumbai in partnership with French group DCNS. India and France have the opportunity to team up on several other defence projects.

Neotia feels that the Smart City Project will get a boost by this visit. He writes, "As for the Smart City project, French companies are already working in 20 big projects in cities across India in areas like the metro and water. That apart, France will also focus on three specific cities and provide a $2.18 billion line of credit to support these projects. That is a great opportunity for the business community."

The French are also keen to work with India on electricity supply, sewage and waste management, energy efficient buildings, security and a range of other small things – like emergency services for hospitals.

Going ahead we need to intensify people-to-people linkages through more scholarly exchanges, tourist flows both ways and maybe yoga. Time to let the champagne flow"

But, the situation in France and rest of Europe is very grim. According to 'Daily & Sunday Express' of United Kingdom, the unemployment in France has surged to an 18-year high of 10.6 per cent, plunging the country into a new economic crisis. It comes as Germany faces the most difficult start to a year in recent memory. Its own industrial production growth has slipped to ZERO per cent and customer confidence has plummeted in a catalogue of disasters for Chancellor Angela Merkel.

An increasingly desperate Hollande has now said he will pay French employers to hire people in a bid to boost jobs as he sought to restore confidence and said that it was time to address the country's "broken" economic model.

Earlier this week, Angela Merkel admitted that Germany could fail to balance its books this year as it contends with the costs of the refugee crisis.

And today around 40 rebels from German Chancellor Angela Merkel's conservative party sent her a letter demanding a change to her liberal refugee policy.

Amid collapsing poll numbers about the country's ability to handle the influx, which brought nearly 1.1 million newcomers last year, the Christian Democratic Union (CDU) lawmakers said Merkel must face up to reality.

Economically, India may not benefit much from Hollande's visit. Under present circumstances, it seems French need the Indians more than Indians need French.