Sarkozy Seeking to Sell Military Aircraft, Nuclear Reactors on India Visit

French President Nicolas Sarkozy arrives in India tomorrow seeking a slice of its multi-billion dollar military spending and pushing Areva SA’s bid to sell at least two nuclear reactors.

Sarkozy will escort 50 chief executives, including those of aircraft-makers Dassault Aviation and EADS, on a presidential sales trip sandwiched between those of U.S. leader Barack Obama and Russia’s Dmitri Medvedev. Each has companies racing for contracts, including India’s planned purchase of $11 billion in jet fighters.

“France is not a top player in India but it has had a steady and supporting role,” Gilles Boquerat, an analyst at the French Institute for International Relations in Paris, said in an interview. “India, for historical and obvious business reasons, has made France one of the top two countries on its list for future civil nuclear-energy deals.”

To boost French economic and employment recovery amid Europe’s debt crisis, Sarkozy will push for sales of submarines as well as combat jets, plus transport and renewable-energy deals. Chief executives with him will include Alstom SA’s Patrick Kron and MBDA’s Antoine Bouvier, as well as Dassault’s Charles Edelstenne and EADS’s Louis Gallois.

As current leader of the Group of 20 nations, Sarkozy also will seek support from Indian Prime Minister Manmohan Singh for his plans to overhaul the global monetary system and regulate commodities markets.

Photographer: Michele Tantussi/Bloomberg

France's president Nicolas Sarkozy. Close

France's president Nicolas Sarkozy.

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Photographer: Michele Tantussi/Bloomberg

France's president Nicolas Sarkozy.

French-Indian Trade

Sarkozy will land in Bangalore to visit the Indian Space Research Organisation. The next day he and his wife, Carla Bruni-Sarkozy, visit the Taj Mahal in Agra, and on Dec. 6 Sarkozy will meet Singh in New Delhi. In Mumbai on Dec. 7, the French president will attend a business conference.

France was India’s fifth-biggest trading partner in 2009, according to India’s government spokesman, Vishnu Prakash. French-Indian trade in the first nine months of this year was worth 5.3 billion euros ($7 billion), down from 7.1 billion euros in 2008 because of the crisis, according to the French government.

Sarkozy is struggling to keep France’s position as fifth largest arms seller to India, behind Russia, Israel, the U.K. and Germany, according to data collected by the Stockholm International Peace Research Institute.

India has increased defense spending partly in response to China’s military build-up. A report by the New Delhi office of accounting firm KPMG and the Confederation of Indian Industry in January showed the Defense Ministry budget is $32 billion for 2010. India plans to spend $112 billion over the next six years to renew or upgrade equipment.

Selling Weapons

French arms purchases “are something that India is very open to because there is a strong desire that we should not put all of our eggs into one basket,” said Nivedita Das Kundu, a research fellow on Indian foreign relations at the government- backed Indian Council of World Affairs in New Delhi.

Sarkozy will seek to advance talks on an Indian Air Force tender from 2007 to buy 126 warplanes worth $11 billion, the world’s biggest fighter-jet purchase in 15 years. Paris-based Dassault Aviation SA, with its Rafale, is competing with Chicago-based Boeing Co., Lockheed Martin Corp., Stockholm-based Saab AB, European Aeronautic, Defense & Space Co., which has headquarters in Paris and Munich, and Moscow-based OAO United Aircraft Corp.

“The Rafale has minimum chances because India is looking for jets that have already been exported,” Siemon Wezeman, a senior fellow at SIPRI, said in an interview.

Aircraft Upgrades

India’s top diplomat for western European affairs, Joint Secretary T.P. Seetharam, told reporters in New Delhi on Dec. 1 that while no major defense deals are likely to be signed during Sarkozy’s stay, the visit is likely to advance plans for French companies to upgrade 51 Mirage-2000 jet fighters built by Dassault for the Indian Air Force 30 years ago.

Thales SA will push to clinch the upgrade deal that may include new avionics and radar and be worth up to $2 billion, La Tribune newspaper reported on Sept. 28.

France and India may sign a preliminary contract that would bring Areva closer to an agreement to build two 1,650 megawatt nuclear reactors at Jaitapur and supply them with uranium, Press Trust of India agency reported on Nov. 24, citing Nuclear Power Corp. of India Ltd. representatives.

Areva, the world’s biggest nuclear-reactor builder, signed a preliminary sales agreement in February 2009 with Nuclear Power Corp. The project passed a key hurdle on Nov. 28 when India’s Environment Ministry gave its approval.

Areva’s chief executive officer, Anne Lauvergeon, told a French Senate commission on Nov. 24 that negotiations were in the final stage and to expect “good news.”

The British government in July said it would permit the export of nuclear technology to India for the first time.

To contact the reporter on this story: Helene Fouquet in Paris hfouquet1@bloomberg.net; James Rupert in New Delhi at jrupert3@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.

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