Bilateral trade practically doubled in a span of ten years, touching the 12-billion-euro mark before the pandemic. More than the volume of bilateral trade, the dynamism of Indo-French economic relations springs from the establishment of French companies in India. Today, more than 600 French subsidiaries with over 1000 offices and facilities from a wide spectrum of sectors are present in India and employ a workforce of around 4,00,000 persons. The total French investment stock in India rose to €10 billion by the end of 2020. This figure rose swiftly over the past few years, quadrupling since the financial crisis.
As a result of the public health crisis that hampered economic activity, the volume of bilateral trade between India and France fell significantly in 2020 to €9 billion, a year-on-year reduction of 23.1%. French exports to India fell from €5.4 billion to €4.2 billion (-21.4% y-o-y), while imports fell from €6.3 billion to €4.8 billion (-23.5%).
In this context, the trade deficit narrowed in 2020 to France’s detriment, reaching €574 million (compared to €899 million a year earlier), i.e. at a level comparable to 2018.
French companies are present throughout India and are mainly active in the country’s major metropolises (Delhi-NCR, Mumbai/Pune, Bengaluru, Chennai, Hyderabad, Ahmedabad and Kolkata). In terms of sectors, the presence of French companies is very diversified. A few areas in which their activity is particularly marked are: aeronautics, renewable energy, transport, urban development and sustainable cities, digital technology and nuclear energy.
In 2021, India ranked 15th among France’s trade partners, rising three places. This progression could be strengthened over the next few years due to the increase in the stock of French FDI in India, which rose from €9.8 billion in 2020 to 11 billion in 2021 (+12%) according to the figures published in the latest Balance of Payments Report by the Banque de France. One year after the economic shock caused by the Covid-19 pandemic, bilateral trade is showing a clear recovery, as evidenced by the volume of trade to the tune of €12.6 billion between the two countries. This represents a 39% year-on-year increase over 2020 and an 8% increase over the pre-pandemic level in 2019.
2021 is marked by a recovery in French exports, which increased by 39% compared to 2020. Excluding the aeronautics sector, French exports to India have risen from €2.6 to €2.9 billion (15% and 8% compared to 2019). For several years, aeronautics has been the main export sector in India, accounting for 50% of France’s total exports to India. French imports from India have also increased by 39% year-on-year (7% compared to 2019).
Despite a climate conducive to recovery, the bilateral deficit to France’s detriment rose to €815 million, i.e. an increase of 41% compared to 2020 (but 9% less than the deficit recorded in 2019).
Last modified on 27/09/2022