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India's Modi out to woo investors

Published: 08 Apr 2015 - 12:57 pm | Last Updated: 15 Jan 2022 - 10:47 pm

Prime Minister Narendra Modi 


New Delhi---Prime Minister Narendra Modi will take his push to turn thriving India into a major manufacturing and investment hub to the eurozone's two biggest economies this week on his maiden visit to the continent.
Modi flies out Thursday to France, whose government is desperate to save a troubled $12 billion defence deal, before heading to Germany to inaugurate one of the world's biggest trade fairs.
He will also visit Canada at the end of the three-nation trip, home to a large Indian diaspora.
The right-wing Hindu nationalist was effectively blacklisted by the European Union for years after deadly communal riots in 2002 in the state of Gujarat, which he governed for over a decade.
But after his landslide victory in last year's general election and with India's economy now growing faster than even China's, the one-time outcast is likely to receive a warm reception.
While New Delhi's close ties with Moscow may limit the areas of common ground on geopolitical issues, the trip represents a perfect opportunity for Modi to tout India as a place to do business.
"I look forward to visit France to seek greater French involvement in our Make in India Programme, including in the defence manufacturing sector," the prime minister wrote on Facebook ahead of his departure.
Modi launched the "Make in India" campaign last year as the centrepiece of a project to rewrite the country's reputation as a tricky place to do business in, beset by bureaucracy, corruption and a stringent tax regime.
- Rules relaxed -
The government has already relaxed rules for foreign investors, eager to create work for the millions who enter India's jobs market each year.
But India is currently ranked 142nd out of 189 countries in a World Bank "ease of doing business" global league table.
And the continued uncertainty over a deal for India to buy 126 Rafale fighter jets from the French company Dassault Aviation is seen as symptomatic of the challenges confronting foreign companies. 
Dassault won the right in 2012 to enter exclusive negotiations to supply the jets, with experts saying a final deal could be worth $12 billion.
But after tortuous negotiations lasting for over three years, there are now new questions about its cost, although Dassault's boss Eric Trappier recently insisted the deal was "95 percent finalised".
French President Francois Hollande confirmed to reporters on Tuesday that he and Modi "will have discussions" about the Rafale deal while stressing he didn't want the issue to define their relationship.
There are also hopes the visit will provide a shot in the arm to another delayed deal with French nuclear giant Areva, still awaiting the go-ahead to set up six reactors in India's western state of Maharashtra, five years after a bilateral civil nuclear accord.

AFP