French President Nikolas Sarkozy is now on a four day tour of India with his wife, Carla Bruni, November 4 to November 7. While US president Barack Obama began his India visit with India’s business hub, Mumbai, Sarkozy chose India’s technology hub to start his India tour. He brought a retinue of 50 business people and top cabinet officials, including Economy minister Christine Lagarde along with him. Sarkozy seems to have come on a top mission, which will also include signing some business contracts.
Strategic and Business Goals
During his speeches on November 4 and in his interview with the Times of India, Sarkozy outlined his top political and trade-related global priorities of the India tour. The very important offers extended to, and requirements sought from, India are as follows:
- Supporting France’s G20 agenda to reform the global monetary system during its G20 presidency in 2011.
- Improvements in global governance.
- Achieving greater stability in commodity prices.
In return for help in accomplishing the above-mentioned goals, Sarkozy offered the following package:
- Helping the rupee to become one of the world's major currencies.
- Supporting India’s long-standing demand for a permanent UN Security Council seat.
Some business contracts will be concluded during Sarkozy’s visit. A major one is a memorandum of understanding signed between French nuclear group Areva and India’s Nuclear Power Corporation of India Limited (NPCIL) to supply at least two water-pressurised reactors worth 7 billion euros ($9.4 billion or Rs 43,240 Cr). France is competing with the US company Boeing to supply 126 fighter jets. France’s defence electronics group Thales is hoping to gain a contract to modernise 51 Mirage 2000 planes.
Since the financial crisis in 2008, US leadership of global political, strategic and economic arenas is increasingly facing challenges from other global financial and military centres such as the EU, under the leadership of Germany and France, emerging market economies (EMEs)with growing GDP growth and trade & current account balance surpluses under the leadership of China and Brazil , and to some degree, Japan.
Some of the recent developments indicate decreasing influence of the US. During the G20 ministerial meeting in South Korea, US Treasury Secretary Geithner proposed limiting trade surpluses of the countries to 4% of their respective GDPs. This proposal attracted fierce criticism from almost all quarters. Member countries were quick to grasp that the proposal was aimed at checking China’s growing trade surplus. Germany criticized it as a state control way of thinking. China and Japan also rejected the proposal. As a result, Geithner had to withdraw the proposal in APEC meetings held one month after the G20 ministerial conference.