Pierre Lignot, Business France Director, Indian Subcontinent |

Other than in defence, Indo-French trade relations have never really expanded to their full potential. Trying to change that, at least from France’s perspective, is Pierre Lignot, Business France Director (French Trade Commission), who told The Dollar Business how he is helping his country participate in the India growth story

Interview by Vanita Peter D’souza | May 2015 Issue | The Dollar Business

 

TDB: Despite the value of France’s total trade staying above the $1.2 trillion mark for successive years, Indo-French trade is struggling to cross $10 billion. Where lies the concern? How does France see India as a trading partner?

Pierre Lignot (PL): During Prime Minister Modi’s recent visit to France, where he met President François Hollande, both leaders underlined the need to encourage Indian and French business and industry, in order to further increase bilateral trade and investments between the two countries. This was an acknowledgment of the fact that there was considerable potential for expansion of economic ties. There are numerous possibilities for enhanced cooperation in many sectors, including those in which we are already strong partners – manufacturing, infrastructure, railways, high technology, aeronautics, nuclear energy, space, defence and renewable energy.

The revival of economic growth should help boost bilateral trade, which is already significant. The importance and the strength of our economic partnership is based, above all, in the increasing number of major investments by French companies in India ($19 billion investment stock in 2014, at a pace of €1 billion per year for the last two years), which places France among the leading investors in India.

TDB: The Modi government is making all the right noises regarding the proposed India-EU FTA. What can you tell us about it? When do you think will it become a reality?

PL: Discussions continue on the free trade agreement between India and EU. Under it, trade flows will increase significantly for the benefit of all.

TDB: Tell us about your strategy to attract Indian tourists to France.

PL: Business France deals with trade and investments only. France has a separate agency - Atout France - in charge of promotion of tourism.

An estimated 3,00,000 Indian tourists visit France every year. This number has seen a steady increase in the last few years. To open France even wider to Indian visitors, with effect from January 1, 2015, the French government has been issuing tourist and business visas to Indians within 48 hours. The Embassy of France in India has also launched ‘ChaloParis’, an app for smartphones and tablets, custom-made for Indian tourists headed for France.

 

TDB: What is France’s preferred mode of participating in the India growth story – FDI or exports?

PL: As mentioned, the importance of our economic partnership is based, above all, in the increasing number of major investments made by French companies in India. Apart from this, both the governments are determined to further increase bilateral trade.

TDB: How does Business France go about helping expand French goods exports to India?

PL: Business France is an agency for the international development of the French economy. One of our missions is to support French companies at an international scale. Our strategy includes providing market access services to French companies, which want to grow in India; identifying and selecting suitable commercial partners, organising B2B meetings, setting up French pavilions in Indian trade fairs, conducting market studies, developing press relations and organising seminars, etc.

 

 

TDB: The import duty on alcoholic beverages is extremely high in India. What are French wine exporters doing to break through the barrier?

PL: Wines and spirits exports from France had their third best year in 2014. For, exports of €10.8 billion and a trade surplus of €9.5 billion gave wines and spirits the top position in terms of trade surpluses in the food industry. Our three main contributors in this sector are Champagne (22%), Cognac (20%) and Bordeaux (16.5%). Champagne exports amounted to €2.4 billion, a 7.8% y-o-y in value and 5.2% y-o-y in volume increase. Outside EU, the top customers for French wines and spirits are United States (15%), Singapore (10%) and Japan (4%).
The demand for wine in India is increasing and total sales have increased by 65% between 2008 and 2013. The increasing influence and coverage of corporate parties and fashion and other global events have been major driving forces behind the strong growth in consumption of fine wines/ champagne and spirits in India in the last few years. Celebrity culture and media focus on celebrity lifestyles have seen young consumers pursuing an aspirational lifestyle in response. Additionally, the increased availability of high-end products had a significant impact on a relatively underdeveloped category. Despite high import duty (165%) and tough labelling rules, France remains the top wine supplier to India, with a 40% market share in 2014.

TDB: What are your views on the ‘Make in India’ campaign? How is France planning to participate in the campaign?

PL: During Prime Minister Modi’s recent visit to France, President Hollande welcomed the ‘Make in India’ initiative, aimed at transforming India into a global manufacturing hub. Thanks to their massive investments all across the country, with remarkable success stories, French companies are already contributing to the ‘Make in India’ programme. More than 1,000 French companies have put in a total investment stock of $19 billion, and this figure is poised to increase significantly over the next few years, with the consolidation and extension of existing investments, as well as the arrival of new companies in the country.

Furthermore, French companies, which cover a broad spectrum of sectors, also employ more than 3,00,000 skilled Indian workers across the country, making France one of India’s leading economic partners.

French companies have also brought know-how and technology with them and are developing large research and development centres in India, in certain cases with an international outlook. Numerous cooperation agreements have also been signed between Indian and French, public and private research organisations.

 

Industry: Business Services