(Corrects Monday to Tuesday in paragraph 8)
* France proposes credit line across 3 years for India
* More discussions still needed to tie up Rafale fighter jet
* Dwindling European defence budgets drive ambition to deal
* French minister invites Indian PM Modi to visit France
NEW DELHI, July 1 France has proposed to give
India a 1 billion euro ($1.4 billion) credit line to fund
sustainable infrastructure and urban development projects,
Foreign Minister Laurent Fabius said on Tuesday.
The credit line would be available over three years and
would be delivered through the French Development Agency,
Fabius, who began his India visit on Monday, told reporters in
India, which has said it needs $1 trillion of investment by
2017 to upgrade its creaking infrastructure, is keen to attract
foreign development agencies and companies to help finance new
roads, railways and cities. Prime Minister Narendra Modi, who
took office in May, has vowed to focus on infrastructure.
"If you don't have the share of technology and the share of
finance, you can develop brilliant ideas, may be brilliant, but
(you will have) nothing concrete," Fabius said at an event about
sustainable growth and climate change.
He is the first of a string of Western politicians due to
visit India over the next few weeks for talks with Modi and his
government, drawn in part by the prospect of lucrative defence
deals that stalled under the last administration.
After meetings with ministers in Modi's cabinet on Monday,
Fabius expressed confidence that there would be a "positive
outcome" to negotiations on a $12-billion deal to sell Rafale
combat aircraft to India.
The deal to supply 126 Rafale fighter jets manufactured by
Dassault Aviation has been under final negotiations
since January 2012 after they pipped the Americans, Europeans
and Russians. The contract, which involves technology-sharing
and the production of most of the planes in India, has been
making slow progress through numerous stages of vetting and
The French minister sounded less upbeat on Tuesday after
meeting Modi, declining to say when the deal might be concluded.
"The next step is for Dassault and the (Indian) government
to discuss the details which have not yet been discussed and
hopefully to reach a conclusion," he told news agency reporters.
"For us, the earlier the better ... but it's a normal
negotiation and the way it must be."
Fabius said Paris was keen to share technology and
industrial development with India in the defence sector.
"To be honest and candid, you have a diminution of the
defence budget in Europe ... and therefore (it is in) our
interest, it's not only the interest of India," he said.
Fabius, who flew on from New Delhi to India's financial
capital, Mumbai, said Modi had accepted an invitation to visit
France, and Paris was hoping he would stop there on his way to
or from a visit to the United States in September.
Some countries find extending a credit line or investing
through development arms a useful way to boost ties with India
and also gain an early link to the South Asian nation's future
Japan is a key investor in the Delhi-Mumbai Industrial
Corridor, a mega infrastructure project that envisages dozens of
new industrial zones and cities sprouting alongside a
1,483-kilometre highway stretch between India's biggest two
($1 = 0.7345 euros)
(Reporting by Shyamantha Asokan, Tommy Wilkes and John
Chalmers; Editing by Jacqueline Wong and Ron Popeski)