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India's Overseas Markets

France

Population (2019): 67,059,887

GDP (2019): US$ 2.71 trillion

World Bank “Ease of Doing Business” Rank (2019): 32

Bilateral Trade with India (2019-20): US$ 11.26 billion

France is an economically developed nation with a large, diverse and sophisticated consumer base. With a GDP of US$ 2.71 trillion in 2019, France is the world’s seventh largest economy and the third largest economy in the European Union after Germany and the UK.

The country excels in aerospace and defence, civil engineering, consumer goods, energy, telecommunications, and tourism. In addition, its workforce is anchored by high research and development spending.

Ride on the niche French areas of aerospace engineering, lifestyle and consumer products to give your business a headstart in France and Europe.

World-class workforce and infrastructure

France has an educated and talented population with excellent universities. The country has 1.6 million scientists and engineers, and 44% of 25 to 34 year-olds are tertiary-educated. Your business can capitalise on the country’s modern business culture, coupled with well-established financial markets and strong intellectual property protections to enter the French and European markets.

France has fast and efficient connections throughout Europe and the rest of the world due to its superb infrastructure that includes a high-speed passenger rail, maritime ports, extensive roadway networks and public transportation, and efficient inter-modal connections.

Besides the excellent transportation system, your company can benefit from a high-quality communications infrastructure that includes high-speed network coverage, as well as electricity at competitive prices.

Aerospace and Aerospace Defence 

The aerospace industry is the most important segment in French manufacturing, followed by the automotive and pharmaceutical sectors. The French aerospace industry recorded revenues of US$ 69 billion in 2017, thanks to the strong performance of its leading companies in aircraft and equipment manufacturing: Airbus, Dassault, Safran, and Thales.

Currently, France and the United States are the only countries to export airliners, business jets, helicopters, and fighter jets. France is also a main contributor to the European space industry.

Within France, the Paris Region is a centre of excellence for training aerospace engineers, researchers and technicians. The region also hosts several key exhibitions in this sector: The International Paris Air Show, Eurosatory and Euronaval. In 2016, an Intergovernmental agreement (IGA) was signed between India and France worth €7.87 billion, for 36 Rafale multi-role fighter jets. The Indian Air Force (IAF) received its first batch of Rafale jets on July 29, 2020.

If you are operating in the aerospace manufacturing sector, the French aerospace industry offers tremendous opportunities for you. Consider opportunities in supplying precision parts to European aerospace players in France and Europe, or explore opportunities to participate in the many aerospace trade shows hosted in France, such as Aeromart Toulouse, a biennial aerospace procurement business matching show.

Digital Technology and Transformation

France has made great strides to transform into a more significant player on the global tech scene. It has made significant progress in building its digital economy, moving up two places to 16th in the 2017 Digital Economy and Society Index (DESI).  As per DESI 2020 ranking also, France is at 16th place.

The country has also laid out its international digital strategy which is both a framework and roadmap that is centred around three key focus areas: governance, the economy and security.

Startups

France has a thriving startup ecosystem that is ranked ahead of the UK for venture capital deals in 2017.

Driving this ecosystem is a sizeable talent pool of over 460,000 developers, and a strong entrepreneurial zeal. France was ranked 14th in the 2019 standings, out of 137 countries on their ability to offer a healthy entrepreneurship ecosystem.

Support from the French government has helped to build the startup ecosystem. For example, the “La French Tech” government initiative has supported the French startup ecosystem both in France and internationally. The government also offers research tax credits that cover up to 30% of R&D expenditure or up to €100 million.

An example of the country’s ambition in this space is Station F, the world’s largest startup campus, which is a former railway station that now hosts startups, multinationals and investors.

France’s thriving startup scene has resulted in an estimated 3,500 startups in Paris, with French startups making a name for themselves.

Consider working with French technology companies and explore leveraging the support infrastructure and innovative ecosystems in both India and France as a launchpad for your company’s growth into Europe.

Lifestyle and Consumer Sectors

France is an economically developed nation with a large, diverse and sophisticated market of 66 million consumers.

With a relatively affluent population, France’s GDP per capita was US$ 40,493.93 in 2019. As world leaders in fashion and food products, the French consumers have mature and discerning preferences. They are keen consumers of services, particularly in the cultural, digital, educational, and travel areas. Explore opportunities in this space to introduce your brand to the French market.

Widely regarded as the fashion capital of the world with renowned fashion brands, the French consumer market is an attractive one for your company in the fashion design business. France makes an ideal springboard for your fashion brand to penetrate the European or global market.

Besides being avid fashion consumers, the French are also known for their sophisticated taste in food. As a food manufacturer, establishing your business in France is one way to ease your business into Europe. SIAL Paris, the world’s largest food innovation exhibition, is one prominent avenue for your food business to enter the French market.

France is the 7th largest economy of the world with a total GDP of US$ 2.71 trillion and a GDP growth rate of 1.5% in 2019. It had a per capita GDP (PPP) of US $ 47,223 in 2019. France is an important member of the G-8, OECD and G-20. Its technological strengths make it the leader in sectors such as aviation, space, food processing, transport, railways and agricultural research. However, France’s business interaction with India is not commensurate with its intrinsic economic capacity.

The economic and commercial linkages are an important component of India’s bilateral relations with France. The economic reforms process in India, ten Prime Ministerial visits from India to France (in 1992, 1995, 1998, 2003, 2005, 2008, 2009, 2011, 2015 & 2017), the visit of the Indian President to France (in 2000), visit of the French Prime Minister to India (in 2003), the visits of the French President to India (in 1998, 2006, 2008, 2010, 2013, 2016 & 2018) and the growing French interest in establishing their presence in Asian markets including in India have all contributed to a broadening of economic links. The series of high-level visits in the commercial and economic field reflects the growing interest of both the governments in expanding trade between the two countries. France considers India an important market for its products and is looking to increase the number of joint ventures and encouraging investments in and from India.

As per INSEE’s data, in 2019 French exports of goods and services increased by 2.1% compared to 2018 and its imports of goods and services increased by 2.5%. In top ten category products, there was a decline in exports of machinery & mechanical appliances; vehicles; electrical machinery and equipment; plastics and articles thereof; beverages, spirits and vinegar; & mineral fuels and oils. The exports of aircrafts; pharmaceutical products; essential oils; & optical/photographic/measuring instruments increased in 2019.

In top ten category products, there was a decline in imports of machinery and mechanical appliances; vehicles other than railway or tramway rolling-stock; mineral fuels, mineral oils & products; electrical machinery and equipment; pharmaceutical products; plastics and articles thereof; aircraft and spacecraft; organic chemical; & article of apparel and clothing while the import of optical/photographic/measuring instruments increased. The trade deficit during 2019 stood at US$ 82.84 billion against US$ 91.01 billion for the previous year. France’s top trading partners are Germany, USA, Italy, Spain, Belgium, UK, China, Switzerland, Netherlands and Poland.

French investments in India

France has emerged as a major source of FDI for India with more than 1,000 French establishments already present in India. France is the 9th largest foreign investor in India with a cumulative investment of US$ 8.54 billion from April 2000 to March 2020 which represents 1.82% of the total FDI inflows into India according to statistics provided by the DIPP. The highest FDI equity inflows are in the services sector (14.57%), with cement & gypsum products (11.39%) in the second place, followed by air transport (including air freight) (9.12%), petroleum & natural gas (8.72%) and automobile industry (4.57).

Most big French groups have their subsidiaries in India. There are also a few joint ventures and liaison offices of French companies in India. 39 of the 40 CAC 40 (French Stock Market Index) companies are present in India. Around 50-70 SMEs are also present in India essentially in the mechanical and pharma-chemical sectors. French companies are present in a wide range of sectors: services (BNP Paribas, Capgemini, Havas, Sodexo, etc.); pharmaceutical-chemical (Arkema, L’Oréal, Sanofi, Total, etc.); aerospace (Airbus, Dassault, Eurocopter, Safran, Thales, etc.); agro-food (Bongrain, Danone, Lactalis, Lesaffre, Pernod Ricard, etc.); electronics (Crouzet, Gemalto, Oberthur, Safran, STMicroelectronics, etc.); construction mechanics (Alstom, Cermex, Legris Group, Poclain, Sidel, etc.); electrical components (Hager, Legrand, Schneider Electric, etc.); automobile (Faurecia, Michelin, Plastic Omnium, Renault, Valeo, etc.).

French investments cleared during 2020 include amongst others Systra (rural/urban transport system), Decathlon (sports products & equipment), CMA Terminals (terminals for container vessels) and Athena Pharmaceutiques (pharmaceutical formulations).

[According to the estimates from the French Embassy in India, French companies employ around 300,000 persons in India and have a turnover of more than US$ 20 billion and have a minimum stock investment portfolio of US$ 19 billion].

 

Issues related to Trade Protection/Rejection of Indian Goods, Sanitary and Phytosanitary/Technical Barriers and other Non-Tariff Barriers

France, being a member of the EU, these issues relate to EU bodies, however, some EU actions originate in France. In 2017, there was only one case of border rejection of Indian products by the French authorities vis-à-vis 13 in 2017, 6 in 2015 and 12 in 2014. These related to mostly food-products on account of detection of banned substances or quantities above the minimum permissible levels being found during inspections.

Bilateral Mechanisms to promote Trade and Investments

India-France Joint Committee for Economic & Technical Cooperation (JCETC) was set up on 26th January, 1976 through an exchange of letters between the Ministers of Commerce and Foreign Trade. Meetings are held at Ministerial level alternately in Delhi and Paris. This Joint Committee is the major institutional mechanism for cooperation in the economic and technical sector. The 17th session of the Joint Committee was held on 24th October, 2017 in Paris. The entire gamut of bilateral economic and commercial relationship was reviewed at the meeting, and both sides agreed to continue and intensify cooperation.

Joint Working Groups (JWGs) at the senior official level have also been constituted through MoUs to deal with specific aspects of economic cooperation, including for Agriculture and Food Processing, IT & Telecommunications, Roads, Sustainable Urban Development and Energy. During the visit of French President to India (14-15 February 2013), the two countries further agreed to establish an annual bilateral Economic and Financial Dialogue (EFD) between the two Finance Ministries on economic and financial issues. The first such Economic and Financial Dialogue was held in Paris on 29th October 2013.

Bilateral Agreements/Memorandum of Understanding (MoU)

India and France have signed a number of Agreements to facilitate the expansion of commercial relations. Among these are the Double Taxation Avoidance Convention (DTAC) [where India has requested a protocol, to amend Article 28 to insert new disclosure norms on which bilateral consultations are continuing], MoU on cooperation in Tourism, MoU on Intellectual Property and a Social Security Exemption Agreement (SSA). In October 2012, India and France signed an Agreement for cooperation in the field of Sustainable Urban Development. Another MoU on Bilateral Cooperation in Food Industries Sector was signed on 24th October 2012. During the visit of French President to India (14-15 February 2013), the two countries concluded an MoU between the Ministry of Railways of the Republic of India and the French National Railways (SNCF) on Technical Cooperation in the field of Railway Sector as well as a General Framework Agreement between Oséo (the French Innovation Promotion Agency) and Technology Development Board (TDB) of India to establish a collaborative framework under which Oséo and TDB may carry out activities related to the exchanging of best practices and the setting up of coordinated measures to foster technological exchanges and innovation collaborations between companies, organizations and institutions of France and India.

The following four agreements/MoUs were signed during the visit of Prime Minister Shri Narendra Modi to France on 10-11 April, 2015:

  1. i) MoU on cooperation in the field of renewable energy between the Ministry of New and Renewable Energy (MNRE), Government of India and the Ministry of Ecology, Sustainable Development and Energy, Government of France;
  2. ii) Railway Protocol between Indian Ministry of Railways and French National Railways (SNCF) on cooperation in semi high speed rail and station renovation;

iii) MoU between National Skill Development Agency (NSDA), India and the National Commission for Vocational Qualifications (Commission Nationale de la Certification Professionnelle – CNCD);

  1. iv) Letter of Intent on Tourism.

During French President François Hollande’s visit to Indian in January 2016, MoUs were signed in the presence of Prime Minister Narendra Modi and Mr. Hollande in the field of smart and sustainable cities and helicopter production as also JV agreements and Letters of Intent in the field of renewable energy/wind energy.

Agreement on Social Security

An Agreement on Social Security exemption was signed during Prime Minister’s visit in September 2008. The Agreement has been ratified by the two sides and has come into force on 1st July, 2011. The agreement will protect the interests of expatriate workers and the companies on a reciprocal basis.  It helps workers by (i) providing for exemption from social security contribution in case of short-term contracts;  (ii) exportability of pension in case of relocation to the home country or any third country; and (iii) totalization of the contribution periods.

VIE (Volontariat International en Enterprise)

Voluntary International Apprenticeship Program: Under this scheme, started in 2008, young French interns/graduates are sent to French companies in India as trainees for a period of one year. The cost is borne by the company utilizing the trainee, with Government defraying certain costs and offering tax subsidies to companies utilizing the scheme. At present there is a cap of 250 visas per annum under the scheme, and the validity of the scheme has been extended till September 2020.

India-France Economic Cooperation through AFD (French Agency for Development)

Pursuant to signing of a MoU in September 2008 between Department of Economic Affairs (DEA) and the French Agency for Development, the AFD extends credit for various projects in India. The priority areas for AFD economic cooperation in India are (i) energy efficiency and renewable energy within the framework of the National Action Plan on Climate Change (NAPCC), (ii) urban infrastructure (public transport, water, etc., through sustainable development projects and infrastructure development programmes such as JNNURM), and (iii) the preservation of biodiversity. The current projects being supported by the AFD include (i) ‘Reorganizing the Water Supply System of Jodhpur City in Rajasthan’, Phase II worth € 71.1 million (ii) ‘Forestry and Bio-diversity Conservation Project in Assam’ worth € 54 million (iii)  Credit Facility Agreement (CFA) for the Bangalore Metro Rail Project, Phase-I (iv) IREDA II and (v) Cochin Metro Project.

India-France Business Associations in France

France-India Chamber of Commerce and Industry (CCIFI, Neuilly-sur-Seine) was created in 1984 as a non-profit organization that aims to promote bilateral commercial relations between India and France. It has as its members several Indian and French companies. The Mission has been working with CCIFI to promote bilateral relations through joint activities. The Chamber brings out a fortnightly newsletter in French and English which provides information in brief on various topics pertaining to economy, trade and industry.

With the support of the Mission, an India-France Business Club was started in January 2014 in Marseille, the second largest city in France after Paris and the largest port to assist Indian businesses, entrepreneurs and to generate interest about India among the French businesses in the region.

Activities for promoting Trade and Investment

Promotion of economic and commercial relations between India and France is a major priority for the Mission and the E&C Wing, under the direction and guidance of the Ambassador, works to promote Indian business and industry by encouraging trade and investment, assisting Indian firms with Government and private sector contacts, providing information, supporting and advising Indian companies about the French market.

The major commercial activities of the Mission include: (i) promotion of Indian goods and services in France, (ii) promotion of Brand India and corporate image of India, (iii) promotion of India as a foreign direct investment destination and (iv) promotion of the ‘Make in India’ campaign. In each of these sectors, the specific action involves information and intelligence gathering, communication and information dissemination, referral activities, advocacy, logistic management and coordination activities.

Vehiclesfootwear, machinery, mechanical appliances, aircrafts, mineral fuels, apparel, optical & organic chemicals.

Product code Product label India’s exports to France in 2019 (Value in US$ Millions)
’27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral 688.61
’84 Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof 479.13
’85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television 385.39
’61 Articles of apparel and clothing accessories, knitted or crocheted 371.95
’62 Articles of apparel and clothing accessories, not knitted or crocheted 369.53
’29 Organic chemicals 278.24
’87 Vehicles other than railway or tramway rolling stock, and parts and accessories thereof 236.58
’90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical 232.49
’30 Pharmaceutical products 219.76
’64 Footwear, gaiters and the like; parts of such articles 186.69

Source: ITC Trade Map

 

Facilitating Trade

According to ITC Trade Map, India has an untapped export potential of US$ 9 billion to France. The products with greatest export potential from India to France are Shrimps & prawns, frozen, Diamonds, worked, Jewellery, of precious metal, nes and Medicaments consisting of mixed or unmixed products, for retail sale. Shrimps & prawns, frozen shows the largest absolute difference between potential and actual exports in value terms, leaving room to realize additional exports worth US$ 339.6 mn.

 

Product code Description Export potential
0306Xb Shrimps & prawns, frozen US$ 423.1 million
710239 Diamonds, worked US$ 399.7 million
711319 Jewellery, of precious metal, nes US$ 345.8 million
3004Xb Medicaments consisting of mixed or unmixed products, for retail sale US$ 302.2 million
610910 T-shirts & vests of cotton, knit/crochet US$ 207.5 million
100630 Semi-milled or wholly milled rice US$ 161.9 million
8703XX Motor vehicles for the transport of persons, nes US$ 149.7 million
6403XX Footwear, rubber/plastic soles & leather uppers, nes US$ 145.1 million
711311 Jewellery, of Silver US$ 144.1 million
880330 Airplane/helicopter parts, nes US$ 139.2 million

Source: ITC Trade Map

Mineral fuels, electrical machinery, metals, fertilizers, paper, plastics, rubber, inorganic chemicals, salt & sulphur.

Product code Product label India’s imports to France in 2019 (Value in US$ Millions)
’84 Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof 736.41
’85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television 711.92
’90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical 292.05
’29 Organic chemicals 213.17
’88 Aircraft, spacecraft, and parts thereof 183.68
’27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral 183.06
’39 Plastics and articles thereof 160.01
’38 Miscellaneous chemical products 144.79
’30 Pharmaceutical products 133.27
’72 Iron and steel 124.69

Source: ITC Trade Map

First Secretary (Economic & Commerce) 
Embassy of India
13-15 rue Alfred Dehodencq
75016 – Paris, France

Tel: 00 33 1 40 50 70 70
Fax: 00 33 1 40 50 09 96

W: https://www.eoiparis.gov.in/

E-mail: eco.paris@mea.gov.in

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