Ministry of External Affairs Government of India

India's engagement with France and the OECD countries.

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  By: Ambassador (Retd) Manju Seth
  Venue: Central University of Rajasthan, Ajmer
  Date: November 14, 2014
  

It is a pleasure to be here today with all of you and to speak on "India’s engagement with France and the OECD”.

India-France

Despite India and France being at very different levels of development, and France being a P5 country, India and France enjoy very warm and cordial ties. The bilateral relationship has endured for more than six decades, primarily due to shared values of democracy and freedom and an independent approach to foreign policy. India and France established diplomatic ties in 1947, soon after India became independent. The relationship has remained special and continued to strengthen over the years despite changes in government in both countries based on wide political and popular support on both sides. India and France established a strategic partnership in 1998 and this has contributed to significant enhancement of bilateral ties through regular high level exchanges at the Head of State/Head of Government levels and cooperation, inter alia, in the strategic areas of defence, counter terrorism, civil nuclear energy and space.

Some comparisons are in order. Though both countries are democracies with bicameral parliaments, France has a Presidential form of government wherein the President enjoys vast powers (unlike in our system) and it is the French Prime Minister whose government is answerable to the National Assembly. Though the Constitution of France envisages the distribution of power between the President and the Prime Minister real power vests in the President. The GDP of France is $2.735 trillion (2013 ), the 9th largest economy with the agricultural sector contributing 1.76%, industry 19.06% and services 79.17%.. Per capita GDP is $42,250(2013). India’s GDP is US $ 2.047 trillion (nominal 2014) and it is the 10th largest economy, with agriculture contributing 13.7%, industry 21.5% and services 64.8%(2013) ,while GDP per capita is $ 1,625(nominal 2014)(1/26th that of France).

India and France are members of many multilateral organisations like the G20, the UN , WTO etc and both have been contributing substantively to the deliberations in these bodies. France has consistently supported India’s increasing role in international fora, including India’s aspirations for permanent membership of the UNSC.

To take forward the relationship, an institutional structure has been put in place for regular dialogue between the two sides viz. the strategic dialogue at the level of National Security Advisors, foreign office consultations at the level of Foreign Secretaries, the JWG on counter terrorism, the high level committee on defence cooperation at the level of Defence Secretaries, the Indo-French Research Forum(IFRI), the Joint Committee for Economic and Technical Cooperation at the level of commerce Ministers , under which Sectoral JWGs are held in areas such as agriculture, IT, urban development, Posts, railways etc. The Indo-French CEOs Forum, set up in 2009, has been tasked to identify new avenues for cooperation and strengthen business links between both countries.

The main elements of the strategic partnership comprise the areas of defence, space, civil nuclear cooperation and security and I will dwell on these briefly.

(i) Civil Nuclear Energy Cooperation: France was the first country with which India signed an agreement on Civil nuclear cooperation after the waiver given by the Nuclear Suppliers Group (NSG) and constitutes an important element of the partnership, and for India, essential for its energy security. Under the agreement signed in September 2008 France would set up six EPR units in the Jaitapur Nuclear power plant in Maharashtra. NPCIL of India and AREVA of France are directly negotiating the technical and commercial aspects of the general framework agreement signed between the two organisations for the purpose.

(ii) Space Cooperation: The Indian Space Research Organisation(ISRO) and the French counterpart CNES (Centre National d’Etudes Spatiales) have a long history of cooperation and collaboration spanning about five decades. A large number of Indian satellites including INSAT 3D, GSAT 7, etc. have been launched by Arianespace of France. After the launch of the APPLE Satellite on a cooperative basis, 17 Geo-stationery Indian satellites have been launched by Arianespace on a commercial basis. Two jointly launched satellites, Megha-Tropiques (2011) and SARAL (Feb.2013) have provided useful information for the study of tropical weather and ocean surface respectively. The French remote sensing satellite SPOT-7 was launched on 13 June 2014 by ISRO.

(iii) Defence Cooperation: France and India have had a long standing defence cooperation for the last 60 years; the French company, Dassault, signed an agreement in 1953 to supply the Toofan/Ouragan aircraft to the Indian Airforce. The French Mirage 2000s have been the backbone of the Indian Air Force with France having supplied the Mirage planes in the 1980s. Currently, two major projects under bilateral defence cooperation are the joint construction of the Scorpene submarines for the Indian Navy and the engine upgrade of the Mirage 2000. Another important project being finalised is the co-development of a short range missiles system. Commitment to transfer of technology is an important aspect of the cooperation. France has proposed joint production of defence equipment in India for export to third countries. France is a major provider of defence equipment to India. Recently, the French aircraft Rafale from M/s Dassault Aviation has been selected for procurement of 126 MMRCA(Medium Multi Role Combat Aircraft) for the Indian Air Force. An indication of the close defence engagement are the regular meetings between the two sides which are held at Defence Secretary level, Joint army exercises, Indo-French Naval exercises and recently an Indo-French joint exercise, Garuda V, was held in Jodhpur in June 2014. In 2009, our PM was the guest of honour at the French National Day and for the first time, for India, a 400 strong contingent of the Indian Armed forces participated. Many Indian soldiers fought and died in both World Wars on French soil and there is a memorial to those Indian soldiers, who died in these wars, at Neauve Chapelle, in France.

(iv) Security Cooperation: India and France have regular cooperation and exchanges in counter terrorism and on cyber issues. Our Prime Minister and the President of France have re-affirmed, in their joint statement in February 2013, that both the leaders were clear that no compromise was possible with terrorism. Both sides have identical views on the threat of terrorism in Afghanistan, Mali and Pakistan’s obligation to mete out punishment to those responsible for the Mumbai terrorist attack.

Indian Culture has always been a strong link in our engagement and India and France have a long tradition of cultural cooperation with Indian culture, especially the classical arts, being very popular with the French. The many performances of music, dance and art and cinema shows in France are mainly sponsored by private French entities. The ICCR(Indian Council for Cultural Relations) also organises Indian art and cultural shows from time to time. The bilateral Cultural Exchange Programme specifies enhanced exchanges between artists, architects, cultural stakeholders, students, teachers, researchers, etc, to further strengthen relations at people to people level. Namaste France held in 2010-11 all over France and Bonjour India held across India in 2009-10 and the second phase in Jan –March 2013 served to showcase each other’s cultural assets and strengthen people to people ties.

Both countries have signed an Education Exchange programme(EEP) and educational and technical cooperation between the two countries has been growing steadily in the last few years. The Maison de l’Inde, a hostel for Indian scholars has recently(2013) been expanded with the construction of an annexe by the GOI. Around 2500 Indian students are studying in France in engineering, aeronautical engineering, IT, management courses, etc. The CEFIPRA, the Indo French Centre for Advanced Research, which has completed 25 years, is the nodal framework for advanced scientific cooperation and exchange of scientists and post doctoral researchers. A large number of MOUs(around 300) have been signed between the universities and private educational institutes of both countries for student exchanges and joint degrees (like between the IIMs and HEC in Paris). A significant project underway is the setting up of the IIT Rajasthan (IIT-R) with French collaboration; France will provide faculty and contribute to the establishment of three centres of excellence, research laboratories at the IIT-R. A Sanskrit chair at the Sorbonne University and an Economics visiting Chair at the Sciences Po further strengthen the educational links between the two countries.

Increasingly economic issues dominate bilateral discourse in the current scenario where global economies are inter-connected and inter-dependent. Though bilateral trade and investments are still not very high( if defence trade is excluded), this aspect impacts the partnership. It has been observed that bilateral trade and investments have strengthened in recent years with bilateral trade in 2013 at Euro 7.09 billion with Indian exports at 4.37 billion euros and French exports to India at 2.7 billion euros. French investments in India have been increasing and France is the 9th largest foreign investor in India with 800 companies and a cumulative investment of Euro 2.31 billion up to 2012. A large number of Indian companies have also invested in France including in steel (Tatas), the IT (TCS) and Bio-technology sectors etc. Business to business interaction between India and France has got a boost with the establishment of the Indo-French CEOs Forum, the 6th meeting of which was held in Paris in July 2013. However, much remains to be done to enhance trade (impacted by the slowdown in Europe) and to diversify the trade basket; steps need to be taken to increase investments by both sides ( by us in terms of regulatory framework and facilitation and on the French side in terms of non tariff barriers). France has expertise in many areas of interest to us and it has been sharing it with us in different sectors, including in clean and renewable energy (solar), planned urban development (Ahmedabad and Puducherry), solid waste and waste water management , railways, etc both at the G to G level and at private sector level. A Franco-Indian Chamber of Commerce and Industry has been functional for the last few years in Paris while the Indo-French Chamber of Commerce and Industry is based in Mumbai and both these Chambers have been active in promoting bilateral trade and investments.

It is not widely known but, since 1986, India has had a Consulate General in Reunion Island, also covering Mayotte (both are a part of France in the Indian Ocean). There is a large Indian origin (PIO) community in mainland France and its overseas territories; while the number of NRIs has increased in recent years it would be around a few thousand. In mainland France the number of PIOs is around 1.6 lakhs mainly from Puduchery, Karaikal, Yanam , Mahe and Chandranagar. Large communities of PIOs are there in Reunion island (about 2,50,000), Mayotte (about 50), Guadeloupe (about 57,000) Martinique (about 6,000) and St. Martin (about 300); the ancestors of these PIOs had generally come in as contract\indentured labour from the former Indian cities controlled by colonial France. The large PIO community in Reunion Island comprises mainly fourth and fifth generation descendants of the contract/indentured labour from the erstwhile French cities in India (brought in between 1672 and 1827);in addition, in Reunion Island and Mayotte, there is a smaller number of second or third generation descendants of Gujarati traders who arrived there to sell textiles and food in the late 19th/early 20th centuries. The PIOs in these islands had little contact with India for many years but in the last 40 years or so cultural and economic linkages have been strengthened and there is now a weekly flight between Reunion Island and Chennai.

It is evident that India’s engagement with France is wide ranging and covers important areas of interest to both India and France. France has been a friend in need and a friend in deed and the relationship has been mutually beneficial and stood the test of time and adversity. In balance, it has been a win-win relationship for both sides.

India-OECD

The Organisation for Economic Cooperation and Development (OECD) is an international organisation of 34 advanced economies with the mission to stimulate economic progress and world trade. The OECD originally started in 1948 as the Organisation for European Economic Cooperation (OEEC) to help administer the Marshall Plan by allocating American financial aid and implementing the economic programme for the reconstruction of Europe after World War II. Later its membership was extended to non-European states. In 1961 it was transformed into the OECD by the Convention on the Organisation for Economic Cooperation and Development. The OECD is headquartered at Paris and has been functioning like an economic think-tank [beyond NATO countries (the original scope)] and has been lately also working in the domains of other multilateral bodies such as global financial management (World Bank, IMF, World Trade (WTO), intellectual property (WIPO), development issues and aid (UN) and Civilian Nuclear Energy (IAEA). The OECD had been keen to reach out to the emerging economies including India and in 2007 the OECD Ministerial Council had invited the Secretary General of the OECD to strengthen the OECD cooperation with Brazil, China, India, Indonesia and South Africa through "enhanced engagement programmes with a view to possible membership”. India’s response to the invitation of the OECD Secretary General has been that India would like to continue to work sectorally with OECD in areas of mutual interest as India was not at a stage to accept OECD’s proposals. In 2011, the OECD proposed that the five countries in the enhanced engagement category be given "Associate Country status” and to become members of the "Global Council” to be created within the OECD to discuss issues of global importance. All five countries declined the proposal.

India’s interaction with the OECD dates back to the 1994/95. However, active participation by India in various OECD meetings started in 2004 after the visit of the then Secretary General of OECD to India. India has been a member of the governing body of the Development Centre of the OECD since 2001; the Development Centre focuses on "better policies for better lives” as part of its developmental strategy. India participates or is an observer in different OECD bodies like the OECD Network on Fiscal Relations, Chemicals Committee and the Working Party on Chemicals, etc. Working Group on Good Laboratory Practice, Global Forum on Transparency and Exchange of Information for Tax Purposes, Joint OECD/ITF Transport Research Committee, Competition Committee, Committee on Consumer Policy, Committee for Information, Computer and Communication Policy, Committee on Fiscal Affairs, Steel Committee, etc. India participates in organisations hosted by the OECD like the International Transport Forum, Financial Action Task Force and the Multinational Design Evaluation Programme serviced by the OECD Nuclear Energy Agency (NEA). India has been participating regularly in the governing board meetings of the International Energy Agency (IEA). In addition, India has also adhered to various OECD conventions/initiatives like the OECD Convention on Mutual Administrative Assistance in Tax Matters, Paris Declaration on Aid Effectiveness, OECD Seed Schemes, etc. The CII (Confederation of Indian Industry) and FICCI (Federation of Indian Chambers of Commerce & Industry) are observers in the Business and Industry Advisory Committee (BIAC) to the OECD which is an independent international business association which advises OECD policy makers. The Trade Union Advisory Committee (TUAC) to the OECD works with the Indian labour movements directly and through the International Trade Union Confederation (ITUC). India has been making financial contributions to the OECD as fees for non-member participation in different OECD bodies.

The OECD has brought out a number of Publications/Studies on India along with recommendations, including the OECD Economic Survey of India focussed on some policy reform areas like education, fiscal policy and the financial sector. The OECD has included India in its other Publications on Employment and Skill Strategies, Studies on Short-Term Employment and Labour Market Outlook and Key Challenges in G-20 Countries, Science, Technology and Industry Outlook, etc.

The OECD has shown interest to work with India on various issues that have been identified by the OECD, which, in its perception, are important for India’s policy concerns. These areas are labour reform and employment generation, social inclusion, quality education [Programme for International Student Assessment (PISA) has been used to assess some schools from Himachal Pradesh and Tamil Nadu] and skill development, statistical measuring of social indicators, agriculture, sustainable growth, managing fresh water resources, open trading system, corporate governance, strengthening completion law, cross border corruption, domestic tax reform and international tax cooperation, transport in India, energy cooperation, nuclear energy, international aid and linking south-south cooperation, innovation and trade in chemicals.

In the context of G-20 the OECD has been involved with the G-20 since the Pittsburgh summit in 2009 participating at the highest level (ministerial and Heads of Government/State) and also at the technical and working group level. The OECD contributes, as a member, to almost all the G-20 working groups by providing data, analytical reports and policy recommendations for consideration by G-20 members. Following the recommendations of G-20 leaders India ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters which is an OECD convention and OECD is keen to engage with India on agriculture and food security undertaken under the G-20 Trade Ministers directive as also work on trade in value added and global value chains.

India’s policy of sectoral engagement with OECD has been useful and India has been able to include its point of view in many of the deliberations and in the outcome documents of the OECD committees/bodies that it is participating in. The Ministry of External Affairs is the nodal point for India on OECD matters and the MEA keeps track of the various OECD initiatives/activities and advises Indian participation in sectors that are of interest. While, in the past, Indian participation in some OECD meetings had been at the ministerial level including at the annual OECD Council of Ministers Meeting, the meetings at the technical and working level are being encouraged. We view our engagement with the OECD as a sectoral one and we would like to continue to engage with the OECD in areas of our mutual interest. By and large India’s engagement, thus far, has been mutually beneficial as standards and benchmarks specified by the OECD in different policy areas form important inputs for our policy making.