France plans an SME push to India

Mumbai: France, whose economic growth unexpectedly ground to a halt in the third quarter of the current year, is increasingly looking to India to give fresh impetus to its industries, especially the small and medium ones, French ambassador Dominique Girard said.

Large French firms have already established their presence in India and France said it would now let SMEs tap the growing Indian market. The plan, he said is to bring 500 SMEs to India over 2006-08, Girard said.

He said France has over two million SMEs representing 64 per cent of that country's total employment.

"While 300 French companies are active in India, employing nearly 40,000 people, French SMEs are still lacking in number," he said, adding. "As against 3,000 in China, only 1,400 French SMEs are exporting to India and the main objective of the meet would be to increase this number."

The French embassy together with the Federation of Indian Chambers of Commerce and Industry (Ficci) and French industry body UBIFRANCE would organise an Indo-French business meet in December, aimed at enabling Indian mid-sized companies and large business groups to network with multi-sector French SMEs, he said.

A large number of defence and aeronautic companies want to establish their base in India and set up manufacturing, R&D, training and production facilities in the country, Girard said.

French industrial production fell 0.1 per cent in the third quarter after an unexpected drop of 0.9 per cent in September.

In the manufacturing sector, production of cars fell 3.1 per cent as French automakers' market share declined. PSA Peugeot Citroen, Europe's second-biggest carmaker, had its credit rating cut one notch at Standard & Poor's, which cited declining sales in Western Europe. Renault SA, the country's second-largest car manufacturer, said third-quarter sales fell 4.5 per cent as demand for its Megane Scenic van slumped.

The government has forecast a growing economy and declining unemployment. Finance minister Thierry Breton has forecast 2007 economic expansion of between two per cent and 2.5 per cent.

France's trade deficit, however, narrowed more than expected in September as imports fell to a five-month low. Yet, the €7.3 billion ($9.4 billion) shortfall in the quarter exceeded the previous period's deficit by €1.1 billion.