Trade ties need a boost

French President François Hollande is in India to be chief guest at the Republic Day Parade. Though leaders of both nations are desirous of greater economic ties, economic and commercial relationships between the two haven’t strengthened over the past few years.

TOP EXPORT ITEMS
  • Mineral fuel, mineral oils & products
  • Apparel, clothing accessories
  • Nuclear reactors, boilers, machinery & mechanical appliances
  • Electrical machinery & equipment
TOP IMPORT ITEMS
  • Aircraft, spacecraft and parts thereof
  • Nuclear reactors, boilers, machinery & mechanical appliances
  • Electrical machinery, equipment & parts
  • Iron & steel
  • Organic chemicals
Source: Commerce ministry

Bilateral trade is less than $10 billion, well shy of the roughly $12-billion target set by both governments. There is no indication of the target being achieved in the immediate future. India’s exports to France rose marginally from $4.98 billion in 2012-13 to $5.1 billion in 2013-14 but declined to $4.95 billion in 2014-15.

By comparison, imports fell from $4.65 billion in 2012-13 to $3.69 billion in 2013-14, rising thereafter to $4.4 billion in 2014-15. France is the ninth largest investor in India with total FDI inflows at $4.76 billion (April 2000 to September 2015). While FDI inflows from France more than doubled from $305 million in 2013-14 to $635 million in 2014-15, the country accounts for only two per cent of all FDI inflows to India. Figures on outward bound FDI aren’t anything to write home about.

According to the French embassy, in 2013, India was the 47th largest foreign investor in France with cumulative FDI inflows amounting to $410 million. Business Standard looks at the trade relationship between the two countries.


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