French President Francois Hollande has said his government was considering an agreement with New Delhi that would clear the way for a long-awaited $9 billion sale of French-built Rafale warplanes to India.
Hollande arrived in India on Sunday. During his visit he will try to close the defence deal and to push forward with nuclear and solar energy agreements, including a plan to build six French nuclear reactors in western India.
Prime Minister Narendra Modi has been trying to attract French companies to India and to share high technology in defence and other fields as part of a bid to promote local industry and build a domestic manufacturing base.
In the run-up to Hollande's visit, Indian and French negotiators debated the price of the 36 combat planes designed to replace ageing Indian air force jets, officials of the two nations said.
"The idea we have in mind is the one of an intergovernmental agreement between the two countries in order to allow the firms involved to go all the way," Hollande told journalists.
"It is this intergovernmental agreement that will allow a commercial transaction," said Hollande.
The French leader, speaking in Chandigarh, a city designed by French architect Le Corbusier, said such an agreement was a prerequisite for the Indian side. He did not elaborate.
Hollande will be the guest of honour at India's Republic Day parade on Tuesday, a sign of the deepening political and commercial ties between the two countries.
During his visit, Hollande will try to kickstart negotiations on a plan for French nuclear company Areva to build six reactors in western India. The talks have recently been stuck over the price of deal, and French utility EDF's recent takeover of Areva's reactor business has also slowed progress.
France and India are expected to lay out a roadmap for nuclear cooperation. India has launched a nuclear insurance pool to address nuclear suppliers' concerns over liability stemming from a 2010 Indian law.
A source at Areva said the firm was waiting to see the details of the insurance cover.
India will also seek French investment to upgrade of its rail system, waterways and mass transit systems planned for 50 cities, Modi said. Formal talks will begin on Monday.
Against the backdrop of major terror strikes in France and India recently, Modi and Hollande also shared concern over the menace, with the Indian leader pitching for a collective fight to defeat the global challenge.
Addressing India-France Business Summit, Modi said the French President "is correct" in saying that terrorism is a challenge just like global warming.
"Fighting against challenge of terrorism is the work for humanity. All those who believe in humanity, they will have to collectively fight against terrorism. India and France believe in humankind. We together along with other countries will eliminate terror forces and terrorism," Modi said.
The day terrorists attacked Paris, that day I decided that the Chief Guest on our Republic day would be from France.
He assured Hollande that India is will stand with France in fight against terrorism.
The comments came against the backdrop of two major terror attacks in India and France in the recent times. While Paris was attacked by ISIS in November, Pathankot in India was struck by Pakistani terrorists on January one.
Modi used the occasion to hail the French government, people and media of that country for continuing their development agenda even after the dastardly terror attack in Paris last November.
"France has shown the way to the world. Just few days after the attack, France hosted leaders of all countries (for climate summit). This is a brave act. I congratulate the citizens of France, especially the media there, that they supported the their government during the time of crisis," he said, adding said India needs to learn lessons from it.
About 130 people were killed and hundreds were wounded in a coordinated terrorist attacks in Paris in November 2015.
The Prime Minister also said the "trust and friendship" with France is an asset for India.
Modi, while addressing the business forum meet, said he had decided to invite Hollande as Republic Day Chief Guest the day terrorists attacked Paris.
"We want to work with France for development. The day terrorists attacked Paris, that day I decided that the Chief Guest on our Republic day would be from France. He has come here and I am very thankful to him," he said.
Hollande is accompanied by the ministers of defense, foreign affairs, economy and culture and dozens of top corporate leaders.
On Sunday, Airbus Helicopters and India's Mahindra Defense, a private company, signed a "statement of intent" in the presence of the two leaders to produce military helicopters in India as a joint venture.
"Mahindra India and Airbus Helicopters have agreed on a blueprint that can put India on the world map for military helicopter manufacturing," said Pierre de Bausset, president of the Airbus Group India. Details were not immediately known.
Hollande will hold talks with Indian leaders in New Delhi on Monday and be a guest of honor on Tuesday at India's Republic Day parade, celebrating 66 years since the country adopted its constitution.
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