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G. Srinivasan

The Ambassador has `high hopes' that import duty on wines would be reduced because the situation today is damaging to the consumers. It is harming the tourism industry and it hurts the Treasury too, because `too much tax kills tax'.

Mr Bernard de Montferrand, French Ambassador to India

NEW DELHI, Feb. 15

ALTHOUGH the bilateral trade between India and France could do much better than the actual potentials, the trend now is "good" since Indian exports to France in the last four years increased by almost 30 per cent, says Mr Bernard de Montferrand, French Ambassador to India.

In an interview to Business Line here, Mr Montferrand said Indian exports to France during the 11 months of 2001 went up by 8 per cent even when there is a general slowdown the world over, reflecting that the Indian exports had been "dynamic".

In terms of investment, France is investing much more in India now than some years ago, he said, adding that on an average, more than 70 million euros is invested every year in India.

Renault has increased its share in its joint venture in India for manufacture of tractors and engine for tractors, he said, adding that "we have more investment is a good sign because when there is more investment, there would be ncreased trade flows and the general feeling among French companies is that it is time to come to India."

He said there is now "great interest, all the more so since there is a new dynamism in disinvestment movement and there are quite a good number of French companies which are interested in the disinvestment which offer more joint venture opportunities for French industrial corporations."

Asked about the major areas in which French companies are present, he said the foremost is infrastructure where French companies remain strong in energy, railways, aviation, banking, cement and glass. For the future, he said, "we have discussed with the Indian authorities a few priority areas."

The agro industry is one where immense potential exists for food processing and France will participate in the forthcoming Agro-Tech Exhibition in Chandigarh, he noted.

Mr Montferrand said that in the energy sector "the Indian institutional landscape and economic conditions today are not cent per cent satisfactory. So if things improve, and I am sure they are going to, there could be much French investment".

Gaz de France has invested 10 per cent in Petronet LNG for building LNG terminal at Dahej in Gujarat, he said.

Many French companies are now ready to organise joint ventures in smaller projects. Alstom in electrical equipment industry, Alcatel and France Telecom in telephone and Vivendi and Suez in water management are illustrations of bilateral co-operation.

Mr Montferrand said: "We had devised in France as early as in the 19th century a system of delegation of public services - public-private partnership. French local authorities are very eager to control the activities in the field of water.

So, through this formula, they maintain the democratic control on the system, but at the same time provide private sector efficiency to have better management and better distribution of water."

He said several formulae of this kind are being studied in India. "These are long processes and water being a politically sensitive subject, it being a common good - our companies are working very professionally and they will succeed in the years to come as they have developed a climate of confidence with local authorities both in water management and in the field of water equipment."

The most important water treatment plant in Asia, he said, is the Sonia Vihar plant, currently coming up in North Delhi for which French firm Degremont (Suez Group) has won the contract. Yet another French firm is managing most of the waste of Chennai.

Other areas of co-operation include new technology - both information technology and private technology since in the French economy, technology has a very important place. In aerospace, France has a long tradition of co-operation with India's HAL. In consumer goods - the fine art of living - France has a strong base, he added.

Asked about the concern voiced by French wine companies on the high import duty in India, Mr Montferrand said that he has "high hopes'' that "the duty level would be decreased because the situation today is damaging to the consumers as they can't have at a reasonable rate quality wine. It is damaging to the tourism industry because not only foreigners but also Indians ask in hotels for quality wines."

If there is high duty there is a temptation to import second quality and smuggling, he said, adding that it is "damaging to the Treasury because too much tax kills tax.''

In March next year, the Ambassador said, there would be an "Indian day in France'' in which a full-day meeting is to be held between business delegates of India and France in the Paris Chambers of Commerce to ascertain new areas of co-operation. Besides there would be a "mois de la France en Inde'', a French month in India in early 2003 to highlight the growing strong ties between the two countries.

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