Speaking in French
- France focuses only on aviation, nuclear energy, luxury goods, all to its own advantage. Ignores the rest.
- Obstacles deliberately created to prevent Indian companies from entering the French market.
- Random checks of containers and sudden changes in norms work as deterrents.
- Indian IT companies targeted. France’s exports are less than even the Netherlands’.
- Visa procedures not to the liking of Indians.
As you enter the sixth floor exhibition hall of Centre Pompidou, the architecturally bizarre contemporary art museum in downtown Paris, a large, well-sculpted Indian woman’s head greets you. Saunter around, and you stumble upon a typical Indian utensils shop, with pots and pans rising from the ground to the ceiling in columns; a sound-and-light show about the gay community in India; an aerial shot of Dharavi, Asia’s largest slum. What holds you in thrall is the biggest ever Indian art exhibition in Paris that is to last all of four months.
Among the 45 major artists represented here is Subodh Gupta, creator of the utensils shop. He told Outlook, “Even though we have displayed all over the world, to be present here in this museum will always mean something special for me and the rest of us.” Sophie Duplaix, one of the two curators of the exhibition, explained the grand idea behind it, “We are trying to project contemporary Indian society, very unknown to the French people, as seen by leading artists from India and France. The objective of this exhibition is...also to create a sustainable cultural relationship with India.”
This isn’t the only Indian aspect of the balmy French spring. Barely three km away from Centre Pompidou, they have mounted an Anish Kapoor show, Monumenta 2011, at the Grand Palais. And to think, just last year, the Indian Council of Cultural Relations had mounted Namaste France, a year-long glimpse into various aspects of Indian culture. India seems to have besotted France, which is courting the country with an ardour typical of first love.
France needs India’s growing economy, rampant consumerism and ambition for its own economic prosperity.
But this seemingly irresistible attraction towards India for the French has an unmistakable undertow of commercial and geopolitical interests. Palpably uneasy at the emergence of the United States as the world’s only superpower, Paris hopes its partnership with the BRICS countries—Brazil, Russia, India, China and South Africa—could help ensure multipolarity, thereby ensuring it isn’t reduced to irrelevance. India has advantages no ambitious suitor can ignore—a growing economy, an expanding middle class, a burgeoning culture of consumerism and a burning desire to emerge as a superpower. These are precisely the traits France needs in a partner for its own economic stability and prosperity.
Experts feel France has cleverly focused the Indo-French bilateral exchanges only on those sectors which are of vital interest to itself. Much of the dialogue between the two is on defence, nuclear energy and aviation. India is committed to buying two European Pressurised Reactors (EPRS) worth $10 billion; another three are supposed to be in the pipeline. In another deal worth $10 billion, the French fighter aircraft Rafale is one of the two medium multi-role combat aircraft (MMRCA) suppliers the Indian air force has shortlisted. Earlier, the low-cost Indian carrier, Indigo, ordered 180 Airbus aircraft worth $16 billion, over and above the deals Jet, Kingfisher and the erstwhile Air Deccan had struck with the French aviation sector.
“After focusing on China for long, the French have woken up to India—the birth of its large middle class.”
Pierre Jean Bonnat, Business consultant
Paris has also mounted pressure on India to reduce import duties on luxury and cosmetic goods and wine, all widely recognised as France’s strength. Says Pierre Jean Bonnat, a Paris-based business consultant and knowledge partner for Euro-India business, “After several long years of being focused on China, the French have finally come to realise the development of India and birth of a strong middle class with the power to purchase the best of luxury goods. The Indians also want to have European lifestyles and desire social recognition which luxury goods like lvmh or Hermes offers them.”
But what’s India getting in return? Let statistics provide the answer—though France is the European Union’s third largest economy, its trade with India is far less than even smaller countries like the Netherlands or Belgium. Take away the mega-deals in two sectors—defence and aviation—and our bilateral trade volume collapses. The French exports to India jumped in 2008 to €3.3 billion from €1.8 billion in 2005, largely because of orders from the Indian aviation sector. It was down in 2009 by 27 per cent, in the absence of any fresh aviation purchase. The basket of exports from India is limited, with 37 per cent of it comprising petroleum products. The two countries have resolved to take their trade to €12 billion by 2012, quite an uphill task as it requires nearly doubling the current volume in a year or so.
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So, is Paris taking India for one big ride? Indian businessmen talk of obstacles consciously raised to deter their entry into the French market, the harrowing red-tapism and discrimination they are subjected to. It’s not Indian goods or skills the French desire, they hanker only for Indian investments. The Greater Paris Investment Agency and the Invest in France Agency have been making a beeline to India each year, tempting its investors to take over creaky small or medium concerns. The Indian investment of $1.5 billion in France ranks only behind the UK and Germany. Wockhardt bought negma labs for $265 million, Eveready bought Uniross Batteries for $14.4 million, United Phosphorus bought Arkema’s agrochemical business for $159 million and United Breweries acquired Bouvet Ladoubee for $15 million.
A recent ficci survey of Indian firms in France found that though imports from India are theoretically free of protectionist measures, in practice certain items, particularly foodstuff and pharmaceuticals, are rejected on the suspicion of not adhering to quality norms. Ironically, such Indian items enter France from third countries like Germany, Holland and others. Another difficulty is that Indian workers, particularly those in IT, have to pay the required social security charges but can’t avail of the benefits of, say, free healthcare until they have contributed their share for a certain number of years. And though France and India signed a Social Security Agreement two years ago, Paris has yet to ratify it.
“Some French seek to delay India’s arrival in the market. Indians must be aggressive, do high-level lobbying.”
Eric Isabey, Pierre Audoin consultancy
Similarly, spouses of Indian workers are denied work permits until they have acquired a resident card, thus discouraging educated couples from accepting assignments in France. And obtaining multiple visas is harrowing for those who wish to shuttle between France and, say, the UK or US for a few months at a stretch. These cumbersome visa regulations, says Nasscom, is the reason why the share of Indian IT is only one-tenth of the French IT sector, which is the third largest in the EU. Eric Isabey, group CEO of Pierre Audoin Consultancy, Europe’s largest IT advisory firm, says Indian IT firms suffer from a poor brand image, recognised as they are mostly as a low-cost option instead of adding value, and come up against complex French labour laws which make the firing of an employee immensely difficult. That’s why, he says, “the decision-making process for most Indian IT companies is conducted by European headquarters that are elsewhere.”
Isabey, however, points out another important problem not readily recognised here: “Some of the French are afraid of the potential of the Indian industry and are also keen to preserve their marketshare and hence they seek to use all means to try and slow down the arrival of Indians on their market.” In the not-too-distant past, major Indian IT firms—be it tcs or Wipro—have been targeted by French IT industry unions when they attempted restructuring their operations in France. Isabey, therefore, recommends that Indians need to rethink their strategy as the market here will not change overnight. “They need to be more aggressive, highlight the value addition and do high-level lobbying.”
“Whenever the French economy suffers, they start locking up the market, and start harassing importers.”
Vinod Kumar Malhotra, CEO, Anju Enterprises
Another major area of concern is food exports from India. Often Indian exports are blocked deviously. Says Vinod Malhotra, CEO of Anju Enterprises, the largest Indian food importer all over Europe, “The authorities often change the rules and these are applied with immediate effect. This means that a container which had followed the norms when it left India 15 days ago would be rejected when it lands here.” Malhotra, like others, is also quite critical of random checks the containers are subjected to, saying these have doubled or tripled now in comparison to the frequency earlier. Each container offloaded means an additional cost of €3000. In addition, the French have now stopped accepting the testing results of even government agencies like Apeda in India and want all tests to be redone here, inflating the cost and creating inordinate delays. Malhotra sees a hidden agenda, “Whenever the economy here begins to suffer, they start locking up the gates of the market, using most often administrative procedures to the maximum, in order to harass importers.”
Despite the litany of complaints about the gargantuan problems Indian exporters encounter, France is seen as an important supporter of India’s quest for power. For one, Paris has been vociferous in endorsing India’s demand to be included as a permanent member of the United Nations Security Council. And when India tested a nuclear device in 1998, France, unlike many other powers, resisted pressure to sanction it. Though Indian officials say the French have been less than fair in their dealings with Indians, one official differs: “Earlier they would not even be ready to share their technology, but now we see a big change in that attitude.”
Other, though, point out that France is keen to transfer technology only because of its own commecial interests. As a local business consultant points out, “It is anything but charity. It is purely business, even if the French hate to admit that they are businessmen first and last.” It’s time India demands its legitimate booty of euros.