The French Finance Minister emphasised on opening up sectors like insurance and retail, particularly, multi-brand retail, so that French companies can invest in these sectors
Seeking to boost its investments in India, France on Monday announced that its companies would invest nearly 10 billion euro (about Rs. 720 crore) by 2012. It promised the inflows to be even better if multi-brand retail and insurance sectors were liberalised.
Speaking at the Indo-France Business Forum organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here, French Finance Minister Christine Lagarde, who is part of President Nicolas Sarkozy's entourage, said: “The 10-billion euro commitment by French businesses to invest in India between 2008 and 2012, could be a lot more if opportunities come up by the opening of insurance and multi brand retail. French companies would respond in a rigorous manner. Everything is about give and take, it's a two-way street.”
Ms. Lagarde suggested that in order to ensure that the margins of the big retailers were not excessive, a process of consultation and dialogue could be initiated by the government with retailers.
Allaying fears on the stability of Euro zone, Ms. Lagarde said that the European Union would defend the European financial alliance and would certainly not give up the euro. “We have put together a $1,000 billion European Fund (which includes the European contribution and IMF assistance) to bail out any EU member state that is in difficulty,” she said. Responding to the remarks by the French Finance Minister, Planning Commission Deputy Chairman Montek Singh Ahluwalia said liberalisation of the two sectors was very much on government's agenda but the policy has to be calibrated.
“Relaxation of FDI cap on insurance and multi-brand retail is very much on the agenda. As far as insurance is concerned, the government has initiated the Parliamentary process to create a legislation to go in for 49 per cent FDI in the sector,” he said. At present FDI up to 26 per cent is allowed in the insurance sector. On FDI in multi-brand retail, Dr. Ahluwalia said, several ministries have supported the proposal for allowing FDI in the sector. The government has already put out a discussion paper on the politically sensitive subject.
A joint statement issued after talks between the Prime Minister, Manmohan Singh, and Mr. Sarkozy, said that the two governments were committed to more than doubling their trade by 2012 to 12 billion euro from 5 billion euro in 2008.
Areas of investment
The areas of investment and trade include automobiles, electrical equipment, rail transport and water utilities.
It said France and India recognised the importance of agriculture and food processing sector for ensuring affordable food production in both the countries.