About Us India-France Economic and Commercial Brief

India-France Comprehensive Economic and Commercial Brief

1. Overview of the French Economy

In 2021, France’s economy ranked 7th in the world with a nominal GDP of USD 2.71 trillion. According to the OECD’s economic forecast, GDP is projected to rebound by 6.8% in 2021 before growth moderates to 4.2% in 2022 and 2.1% in 2023. Domestic demand will drive the recovery. Improved labour market outcomes will boost private consumption while the recovery and investment plans will support investment. Exports will gradually catch up as prospects in the aeronautic and tourism sectors improve. Headline inflation has reached a high level, but the temporary freeze of regulated energy prices will reduce the short-term impact of wholesale energy price rises, while persistent labour market slack should temporarily limit pressures for wage increases. France had a Per Capita GDP (PPP) of USD 46,537 in 2020. It is an important member of the G-7, OECD and G-20. France’s technological strengths make it the leader in sectors such as aviation, space, food processing, transport, railways and agricultural research.

2. India-France Economic & Commercial Relations

The economic and commercial relations are an important component of India's bilateral relations with France. The economic reforms process in India, twelve Prime Ministerial visits from India to France in 1992, 1995, 1998, 2003, 2005, 2008, 2009, 2011, 2015, 2017, 2019 and 2022, the visit of our President to France in 2000, the 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 its presence in Asian markets including in India have all contributed to the 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.

3. Bilateral Trade in Goods (excluding Military Equipment)

From January to December 2021, the India-France bilateral trade in goods (excluding military equipment) stood at € 12.58 billion (+39.17% as compared to the corresponding period the previous year). India’s exports to France were valued at € 6.70 billion, up by 39.36% during this period. Indian imports from France also increased by 38.98% to € 5.88 billion.

India-France Trade in Goods excluding Military Equipment in the last 10 years (in Million €)

Year

(Jan. to Dec.)

Indian Exports

to France

French Exports 

to India

Total

Trade

Balance 

of Trade

for India

Y-o-Y %

Changes

in Total Trade

2012

4,656

3,256

7,912

+1,400

+5.98%

2013

4,440

2,713

7,153

+1,727

-9.59%

2014

5,216

2,704

7,920

+2,502

+10.70%

2015

5,218

2,703

8,548

+2,196

+7.91%

2016

4,669

3,910

8,580

+759

+0.37%

2017

5,362

5,345

10,707

+17

+24.79%

2018

5,993

5,529

11,522

+463

+7.61

2019

6,238

5,358

11,596

+880

+0.64

2020

4,809

4,235

9,045

+574

-21.99

2021

6,702

5,886

12,588

+816

+39.17

Source: French Ministry for Economy & Finance (Data rounded off to nearest million €)

4. Bilateral Trade in Services


Based on annual data provided by the French Central Bank (Banque de France), the Indian exports of services to France registered of a slight growth of 2.19% from January to December 2020 as compared to the same period of the previous year from € 2.46 billion to € 2.51 billion, with the following categories of services recording a growth (in descending order): 1) financial services (+144.08%); 2) telecommunication, computer & information services (+58.47%); 3) cultural, leisure & personal services (+26.66%); 4) pension & insurance services (+9.09%); 5) other services to businesses (+8.24%) & 6) manufacturing services supplied by physical inputs held by third parties (+5.10%).

Similarly, the Indian imports of services from France also recorded a growth of growth of 12.22% last year from € 2.00 billion in 2019 to € 2.24 billion in 2020. The following categories contributed to this increase (in descending order): 1) pension & insurance services (+275%); 2) other services to businesses (+139.29%); 3) building & public works (+100%) & 4) financial services (+60%).

India-France Trade in Services over the last 5 Years (in Million €)

Year

(Jan.-Dec.)

Indian Exports

to France

French Exports

to India

Total

Y-o-Y % of Increase/Decrease

2016

1,775

1,463

3,238

-5.04

2017

2,563

1,739

4,302

+32.85

2018

2,459

1,928

4,387

+1.97

2019

2,463

2,004

4,467

+1.82

2020

2,517

2,249

4,766

+6.69


Composition of India-France Trade in Services in 2020 (in Million €)

No.

Major Categories of Services

Indian Exports

to France

Indian Imports from France

1.

Manufacturing services supplied by physical inputs held by third parties

103

58

2.

Maintenance & repair services

58

225

3.

Transport

256

508

4.

Travel

65

56

5.

Building & public works

3

5

6.

Pension & insurance services

12

135

7.

Financial services

227

32

8.

Commission for use of intellectual property

61

107

9.

Telecommunication, computer & information services

729

167

10.

Other services to businesses

985

950

11.

Cultural, leisure & personal services

19

7

12.

Goods & services of public administration

0

0

13.

Other services (not included elsewhere)

0

0


Total

2,517

2,249


5. 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 11th largest foreign investor in India with a cumulative investment of USD 10.31 billion from April 2000 to June 2022 which represents 1.70% of the total FDI inflows into India according to statistics provided by the Department for Promotion of Industry and Internal Trade (DPIIT). The highest FDI equity inflows are in the services sector (18.17%), with cement & gypsum products (9.43%) in the second place, followed by air transport (including air freight) (7.72%), miscellaneous industries (7.38%) and petroleum & natural gas (7.22%). These five sectors represent 49.92% of the total equity inflow from France from April 2000 to June 2022.

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, TotalEnergies, etc.); aerospace (Airbus, Dassault, Eurocopter, Safran, Thales, etc.); agro-food (Bongrain, Danone, Lactalis, Lesaffre, Pernod Ricard, etc.); electronics (Crouzet, Oberthur, Safran, STMicroelectronics, Thales, 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 in 2021 and 2022 include amongst others Edifixio (technological services), Ceva Santé Animale (pharmaceutical products & vaccines), Worldline (transaction processing services) and Systra (urban & rail transport engineering).

[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 USD 20 billion and have a minimum stock investment portfolio of USD 19 billion].

FDI Equity Inflows from France

Financial Year

(April-March)

FDI Equity Inflows from France

INR Crores

USD Million

€ Million

Y-o-Y % Changes

2000-01

455

104

92

N.A.

2001-02

488

108

95

+3.5

2002-03

533

111

98

+3.3

2003-04

176

38

33