It seemed interesting that on the eve of Prime Minister Narendra Modi’s departure for France, the Indian and French governments issued similar statements on the prospects of an agreement on the purchase of the Rafale aircraft: that no
single deal should be allowed to overshadow the Prime Minister’s visit. Indeed,
India-France relations are much bigger than any one contract; they represent the cultural affinity and historic relations between two vibrant democracies. The items on the Prime Minister’s agenda reflected the range of commonalities — from the preservation of ancient architecture to the development of Puducherry and Chandigarh as smart cities; from the construction of semi-high-speed railway lines to cooperation on a space mission to Mars; from discussing anti-terror training to tackling climate change through renewable technologies and a robust nuclear partnership. The economic aspect of the relationship has been ignored for too long. Although more than a thousand French companies have a total investment of about $20 billion in India, bilateral trade is worth just $8 billion. While all this deserved attention, it was disappointing that the Prime Minister put the spotlight back on defence ties by making a surprise announcement on the purchase of 36 Rafale aircraft as the highlight of his talks with President François Hollande. If the outright purchase was a crucial military necessity, it could have been discussed a few weeks before or after the visit, as a political push for the deal was secondary to the technical specifications and delivery requirements. Moreover, the deal, which involves purchasing products off the shelf abroad, detracts from Mr. Modi’s “Make in India” initiative.
The breakthrough on the Areva nuclear equipment deal, on the other hand, shows the positive outcome of Mr. Modi’s and Mr. Hollande’s political push, combined with a “Make in India” twist. As in the case of Indo-U.S. nuclear negotiations, Mr. Modi and Mr. Hollande decided to clear the logjam by splitting the problem into different silos — allowing for separate mechanisms for the pricing issues and for the technical and legal aspects. The supplementary deal involving Areva and L&T producing heavy forging metal casing for nuclear reactors is an important step in localising some of the expensive parts. During his visit to Canada, where he hopes to sign a deal for uranium supplies, Mr. Modi means to take forward his plan to increase nuclear energy production. Given this objective, it may be useful for him to round off the visit by discussing his nuclear energy plans in Germany as well, which is now winding down on nuclear power but is at the cutting edge of nuclear safety research for the European Pressurised Reactors that are being considered for India.
