Keynote address delivered by Christophe Sirugue at FICCI conference
Our two countries share a long history, a longstanding friendship, and shared beliefs.
New Delhi, 25 October 2016
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Mr President of FICCI,
Ladies and gentlemen,
I am delighted to open this new conference dedicated to France’s attractiveness and to see so many of you present on the occasion of the second edition. I’ve been told the attendance is even higher than at the previous conference. Thank you all for making time to be here. I would particularly like to thank the President of FICCI, Mr Harshavardhan Neotia, and the Adamas law firm for cooperating once again on this conference. I would also like to thank our Ambassador, and through him, the Regional Economic Department and Business France for having carried out this initiative.
To begin with, I would like to underscore the ties that bind our two countries and review the status of their bilateral relations. Thereafter, I would like to share my thoughts and vision for the French economy, its assets, and the place reserved for Indian investments.
Our two countries share a long history, a longstanding friendship, and shared beliefs. Over the past few years, they have forged a strategic partnership, which has become increasingly substantive. This excellent relationship was particularly obvious in January 2016 during your Republic Day celebrations, to which our President was invited as the Chief Guest. Our Indo-French strategic partnership goes back to 1998 and has been ceaselessly developing since, particularly in the matters of defence, civil nuclear energy, space, and security. New areas of agreement emerge regularly, but I am here in a gathering of company heads, so I will focus on the economic field.
There are over 400 French companies present in India today, accounting for a turnover of 11 billion euros. France appears in the list of the topmost foreign investors. A good half of these investments are directed towards the industrial sector, which makes France a major player in the “Make in India” programme launched by Prime Minister Narendra Modi’s government, just as we are present in numerous other programmes initiated by the Indian authorities: Smart Cities Mission, Digital India, Skill India, Saffron Revolution. Here’s an example of this: French companies account for 10% of India’s installed solar capacity.
But beyond this solid foundation, collectively, there is room for us to make further progress. Although it is advancing, our bilateral trade is not commensurate with the sizes of our respective economies. That’s why I have come here not only to help French companies establish themselves here but also and especially to tell you that France is open to Indian investors and companies. As of now, there are only 147 Indian companies employing a workforce of around 5000 people that have invested in our country. Now it’s up to you to come tomorrow and invest in France!
It is due to this that I wished to share this occasion with you today. I have come to speak to you about France, a major economic power – the fifth globally – about all that we have been doing for our companies over several years so that they may develop, conquer new markets, invest and employ.
Today we have come with solutions, with responses to these companies and their employees. On the morrow of Brexit, companies need visibility and a strong foothold in Europe. In this newly emerging environment, we are offering you an attractive France. A France that is attractive by its numerous advantages. A France that is attractive thanks to its infrastructure, which we continue to develop. A France that is attractive thanks to the reforms we are conducting. Lastly, a France that is attractive due to its position in Europe and its proximity to Africa; and its structural advantages.
(i) First of all, a word on our infrastructure
- Paris’ position is a solid one, geared towards the industrial economy. And that’s its major advantage. Because Paris is a financial place at the service of financing enterprises. That’s why we have major industrial groups that figure among the topmost companies issuing financial securities globally (31 French companies are listed among the 500 world leaders)
- Paris’s position is solid as well as innovative. We are together building tomorrow’s financial hub, by making Paris the capital of Smart Finance. Our role in this is to provide you with a suitable framework, open to the new ideas of entrepreneurs ready to take the plunge.
- Paris is, in fact, where continental Europe’s main crowdfunding activity takes place, and we are continuing to work on making this framework even more competitive.
- It is French law that will, for the first time in Europe, set the legal and security conditions for making decentralized financial transactions on the internet – what we call “blockchain”.
Our hosting capacity is constantly on the rise and we are thus always prepared to host more companies. All the necessary infrastructure for hosting them is already there, while yet more new ones are underway:
- Availability of offices in Paris and the Ile-de-France region is already the highest in Europe. We have chosen to expand these office clusters by handing over 900 000 m2 of offices this year, which equals to 60 000 workstations.
- Work on the Grand Paris Express has commenced. They will offer Paris and its entire surrounding region a choice of homogeneous transport that will include airports and stations in its route as best as possible.
- French territory is very well covered in terms of transport as French metropolises enjoy excellent inter-connectivity, thanks to France’s high-performance high-speed train network.
(ii) To enhance France’s attractiveness, we have also undertaken many reforms, increased the competitiveness of companies, as well as simplified procedures for foreign entities in France:
1) Regarding competitiveness
- We have cut down the tax and social security burden on companies with an import credit that reduces deductions for employers to the extent of 3% of the total salary cost. This is a substantial measure as it accounts for two GDP points. The hourly industrial wage is lower than that of Germany. We’re making even further efforts, with the French National Assembly having voted this week for reducing corporate tax rates to 28% by the next 4 years for large enterprises, and 15% for SMEs. The rate currently stands at 33%. Thus, we’ve made a major effort for companies.
- We have liberalised the goods and services market with the “growth and activity” law, initiated by my predecessor;
- We have reformed the labour market, a topic I am thoroughly well-versed in as I championed it in Parliament;
- We have simplified many bureaucratic procedures by offering a more stable fiscal and regulatory framework.
- We have taken steps to encourage capital investment inflows thanks to corporate venture and limited partnerships.
Among the reforms undertaken, the following specifically concern you:
- We have improved the fiscal regime for foreigners and designated a single fiscal contact point for foreign investors;
- I know that the matter of visas and residence permits is crucial for you and your employees. The time factor is an essential aspect in corporate life. Being able to depend on swift visa issuance is a decisive factor. This is now a reality thanks to the remarkable service of the visa section of our Embassy of France in India. You can obtain visas in a record time for any trip undertaken for professional reasons or the purpose of investment.
(iii) In this specially conceived framework, France is a driving force at the core of trade.
- France belongs to the fourth biggest global market, Europe. As Brexit is ushered in, come set up your enterprise in France. That means gaining access to the heart of a single market, made up of 440 million consumers in the future Europe of 27 member States. France has already been chosen as a destination by thousands of multinational companies. That reminds me of Facebook’s decision to set up its Artificial Intelligence R&D centre in France. John Chambers, CEO of Cisco, recently said that France is the future, because “it’s the Silicon Valley of Europe”. Thus, France is a tax haven for research, particularly due to the research tax credit.
- France is one of the top global recipients of foreign investments. Each week, France hosts 19 new companies. And it is also the top destination for industrial investment inflows in Europe.
- Thus, France occupies a leading position in numerous industrial sectors and not only in perfumes, bags, wines and cheese – as many tend to think.
- France holds the topmost rank in Europe in the aerospace and defence sectors;
- It is ranked second for chemicals; third for information technology, pharmaceuticals and food processing;
- And, of course, we hold the first position globally for tourism.
- France is also the gateway for entry into other world markets:
- France is also known as a hub for conducting business in Africa. I know that this is a point of growing interest for Indian companies. Apart from the French-speaking linguistic community in Africa, French companies also enjoy legal and fiscal security in many African countries. Many foreign groups – Chinese, American, Brazilian, Japanese – have already chosen Paris as the base to steer their activities in Africa. Indian groups interested in this continent are welcome in France.
(iv) Lastly, France has numerous structural advantages, which are often forgotten!
- I often hear that the French don’t work enough, that the word “entrepreneur” doesn’t exist in French culture (whereas it’s actually the British who borrowed it from us!), that our labour laws are inflexible, and so on. Yes, we do protect our employees, who benefit from one of the most sophisticated social security cover in the world, but the French are among the most productive workers, employed often at wages that compare better for an employer than in the German industry.
- Our workforce is highly qualified, dedicated to enterprise and particularly motivated and dependable. I am sure that the Indian investors, who will present their feedback at the end of this seminar, will back me on this point!
- France, a great country for universities, is also a land of clusters, grandes écoles for engineering, research and innovation centres, producing numerous Nobel Laureates. As you may recall, the latest Nobel for Chemistry was awarded to the French coordination chemist, Jean-Pierre Sauvage.
- We host brilliant students and are the third most popular country for students worldwide, according to UNESCO. Thus, France draws all kinds of talents.
Thus, our country not only possesses acknowledged economic potential but also stands out as a place of creativity, encouraging innovation. At the same time, France is also known for its rigour and taste for excellence, which helps transform this creativity into concrete and marketable innovations.
This creativity is not limited to France’s borders, but shared across the world, particularly in India. This is already embodied here in three exemplary industrial partnerships:
- The development of the Kwid, a crossover designed in Chennai and the fruit of Indo-French cooperation. I’ll, in fact, be visiting the assembly plant tomorrow.
- The partnership signed between Crompton Greaves and the CEA during our President’s visit also bear testimony to the vitality of our creativity.
- Recently, FranceCol, in collaboration with Veltech University in Chennai, came up with an embedded wheel motor project that could provide a solution to mass transport in India.
- Lastly, the French startup Blablacar’s success in India is yet another illustration of this.
I hope that our arguments will have convinced you to choose France when you consider your next investments abroad. Many French companies have already made this choice, be the next to do it!
Along with the Trade Commission of the French Embassy, I remain at your disposal to assist and guide you as effectively as possible in France. Thank you.