French minister assured on Airbus deal

Friday, 10 December 2004, 20:30 IST
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NEW DELHI : The Indian government is likely to clear the $2 billion proposal from Airbus Industrie to sell 43 aircraft to Indian Airlines by the end of this month, French Trade Minister Francois Loos said here Friday. Speaking to reporters on the last day of his four-day official visit to Mumbai and New Delhi, Loos said the indication was given to him during his meetings with top government officials here. "I have been told that the final decision will be taken by the end of this month," he said. The aircraft will be acquired over a period of five to six years, he added. The Public Investment Board, comprising top bureaucrats in the ministries of finance and civil aviation, approved the proposal last month and forwarded it to the Cabinet Committee Economic Affairs for final clearance. The French minister, who met Finance Minister P. Chidambaram, Commerce Minister Kamal Nath, Civil Aviation Minister Praful Patel and Power Minister P.M. Sayeed, said Airbus would also bid for a similar tender from Air-India. He said the Toulouse-based European aircraft-manufacturing consortium will also expand its partnership with state-owned Hindustan Aeronautics Ltd (HAL), but did not specify the nature of the proposal. HAL currently manufactures passenger doors for Airbus Industrie, in which European Aeronautic Defence and Space Company owns an 80 percent stake and Britain's BAE Systems PLC holds the remaining 20 percent. Loos, who was accompanied by a 21-member business delegation including officials of Alcatel, Moet Hennesey and Pierre Fabre, said French firms were interested in investing in India in areas like energy, telecom and agro processing. Officials accompanying the delegation said Alcatel, for example, was in talks with the state-owned Indian Telephone Industries to become the first company in India to manufacture mobile phone equipment. "But one problem is our companies want 100 percent ownership. If is difficult to choose a good partner and then get their permission for investment. It delays matters," Loos said. "Kamal Nath told me 'we will open' and we are interested," he said, adding 100 percent ownership was one of the reasons why French companies have a much larger presence in China than in India. "Only 200 French companies are in India, but in China there are 500, maybe more." According to Loos, the macro-economic situation in India was good, inflation rate was reasonable and the foreign exchange position was healthy, all of which offered the desired climate and vast opportunities for investment. The minister said even as bilateral trade between India and France was expanding, it was far below the potential. Global exports from France grew by five percent during the first nine months of 2004, but with India it rose 24 percent. Loos said he had assured the Indian government that he would take all possible steps to advertise India in France. "We will not wait for the Indian government to take the steps." He said one reason why India had not been able to export its agro-based products to France was because of the strict phyto sanitary rules in Europe. "The is a problem of sanitary conditions. We are trying to sort it out." The 49-year-old corporate leader-turned-politician said he was happy that some relaxation had been made by India in the tariffs levels of imported wines and spirits. For example, restaurants and hotels are allowed to import wine free of duty up to 20 percent of their foreign exchange earnings, he said, adding he had raised the issue of further reduction in high tariffs.
Source: IANS