Asia-Pacific

Sarkozy backs India for UN Security Council

(Agencies)
Updated: 2010-12-06 23:55

France's President Nicolas Sarkozy delivers a speech to the French community of New Delhi, as his wife Carla Bruni-Sarkozy (L) watches, Dec 6, 2010. [Photo/Agencies]

NEW DELHI - 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.

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 markets.

"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 investor, 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 major ?developed nations and emerging powers 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.
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French officials said the visit coincided with plans by ?Indian state-run carrier Air India and Jet Airways to lease Airbus aircraft worth 2.8 billion ?euros. But aviation industry officials said the deals were ?likely to involve renting the planes from banks or other third ?parties and would not generate new business for Airbus.

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 UN??Security Council alongside France, Russia, China, Britain and ?the United States.

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 United ?States, 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.