Modi and Macron Elevate India-France Ties to ‘Special Global Strategic Partnership’

India-France strategic defense cooperation

India and France have reaffirmed their long-standing defense partnership, with renewed focus on co-design, co-development, and co-production of advanced platforms across air, land, naval, and emerging dual-use technologies. Progress under the 2024 Defense Industrial Roadmap was noted, alongside the November 2025 technical arrangement between India’s DRDO and France’s DGA.

Key developments include:

• Procurement of 26 Rafale-M fighter jets by India
• Continued cooperation under the Scorpène (P75–Kalvari) submarine program
• Joint ventures involving Safran, Hindustan Aeronautics Limited (HAL), Airbus, and Tata Advanced Systems for aircraft engines, helicopters, and manufacturing facilities in India
• Establishment of maintenance, repair & overhaul (MRO) facilities for LEAP and M-88 engines

Technology, innovation, and digital cooperation

The jointly inaugurated Year of Innovation will drive collaboration between the two countries in emerging domains such as AI, digital technologies, healthcare, sustainability, research, and education. The aim is to foster partnerships between startups, academia, and industry across both ecosystems: 

• Expansion of the India-France Innovation Network
• Greater startup linkages, including cooperation between the Hyderabad-based innovation lab T-Hub and Nord France Invest
• Collaboration between the Institut National de Recherche en Informatique et en Automatique (INRIA) and the Department of Science and Technology (DST) on a binational digital sciences center

Economic partnership, trade, and financial cooperation

Modi and Macron noted sustained growth in bilateral trade and two-way investments, particularly in aerospace, energy, logistics, telecom, agri-food, and technology. An amendment to the India-France Double Tax Avoidance Agreement (DTAA) was signed to facilitate greater investment flows.

Other highlights included:

• Expansion of India’s UPI digital payment system in France
• Cooperation in railways, including high-speed rail and hydrogen-powered trains
• Collaboration on secure and resilient supply chains and economic security

Both leaders welcomed the conclusion of negotiations on the India-European Union Free Trade Agreement (India-EU FTA) and the signing of the EU-India Security and Defense Partnership.

India-France trade and investment relations

Merchandise trade 

The total merchandise trade between India and France reached US$11.68 billion in FY 2024-25, with flows remaining strong at US$10.98 billion during April-December FY 2025-26. Trade remains broadly balanced, reflecting mature two-way engagement under the strategic partnership framework.

India-France Merchandise Trade Relations (Value in US$ Million)
Trade activities	FY 2024-25	*FY 2025-26 (April-Dec)
India’s exports to France	6,024.33	5,290.43
India’s imports from France	5,657.89	5,690.61
Total	11,682.22	10,981.04

Source: Department of Commerce, Ministry of Commerce and Industry, GoI. 

*Please note that the trade figures for FY 2025-26 are provisional and subject to revision upon the end of the current financial year (FY26).

India’s exports to France include pharmaceuticals (drug formulations and biologicals), electric machinery, electronic components, and instruments.

India’s Top Commodity Exports to France (Value in US$ Million)
Commodity	Apr-December 2024	Apr-December 2025 (P)	% growth
Drug formulations, biologicals	429.78	442.42	800.42
Electric machinery and equipment	318.90	421.66	1053.76
RMG cotton including accessories	244.46	278.42	895.45
Aircraft, spacecraft and parts	615.07	224.13	218.50
Telecom instruments	241.59	219.13	691.61
Petroleum products	1,073.77	196.35	58.65
Gold and other precious metal jewelry	139.39	193.45	1110.48
Electronics components	123.62	165.62	1071.25
Electronics instruments	88.15	132.64	1216.68
Cotton fabrics, made-up etc.	107.28	120.70	882.48

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

On the import side, aircraft and spacecraft components dominate, underscoring the depth of defense and aerospace cooperation.

India’s Top Commodity Imports from France (Value in US$ Million)
Commodity	Apr-December 2024	Apr-December 2025 (P)	% growth
Aircraft, spacecraft and parts	2,298.00	2,267.69	765.15
Electric machinery and equipment	543.77	645.90	934.63
Medical and scientific instruments	226.04	176.65	583.80
Industrial machinery for dairy etc.	219.81	202.72	707.73
Electronics components	187.09	197.15	821.83
Electronics instruments	149.37	134.04	685.35
Iron and steel	143.86	113.48	586.99
Other commodities	113.58	117.75	804.09
Plastic raw materials	103.98	81.02	579.37
Residual chemical and allied products	102.43	130.17	1008.27

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

India’s imports indicate France’s role as a supplier of advanced capital goods and technology inputs to India’s industrial ecosystem.

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French investment in India

France ranks as the 11th largest foreign direct investor in India as of September 2025. Cumulative FDI inflows from 2001 to 2021 exceeded US$10 billion.

Country-Specific FDI Equity Inflow: French Investments into India
Years	Investment amount (in US$ million)
2001-21	10,074.47
2022	426.23
2023	353.15
2024	859.24
2025 (Jan-Sept.)	233.31

Source: Fact Sheet, DPIIT, GoI.

Multilateral engagement: Indo-Pacific cooperation and connectivity

India and France reaffirmed their commitment to a free, open, and rules-based Indo-Pacific. Cooperation will advance under the 2018 Joint Strategic Vision for the Indian Ocean Region and the 2023 Indo-Pacific Roadmap. The two sides endorsed progress under initiatives such as the India–Middle East–Europe Economic Corridor (IMEC) and trilateral cooperation with Australia and the UAE.

What businesses and investors can anticipate in 2026

For businesses, the key implication is greater predictability in long-term cooperation frameworks rather than isolated, transaction-based engagement.

1. Deepening localization and industrial participation

As defense and aerospace cooperation advances toward co-development and manufacturing integration, suppliers should anticipate stricter localization thresholds, higher technical qualification standards, and long-term vendor onboarding cycles.

Advisory lens: Early positioning within certified supply chains, investment in compliance with Indian defense procurement norms, and capability upgrades in precision manufacturing and systems integration will be critical for sustained participation.

2. Bi-national innovation commercialization

The institutionalization of joint research and innovation platforms suggests a gradual shift from academic collaboration to commercial deployment. This creates scope for structured intellectual property (IP)-sharing arrangements, joint technology incubation, and cross-border R&D financing models.

Advisory lens: Firms should evaluate co-development agreements, technology licensing frameworks, and collaborative grant mechanisms to de-risk early-stage innovation while preserving intellectual property control.

3. Tax certainty and investment structuring

Recent treaty-level adjustments and strengthened economic dialogue mechanisms point to improved fiscal clarity and regulatory coordination.

Advisory lens: Investors should reassess holding structures, transfer pricing policies, and cross-border financing models to optimize tax efficiency and manage permanent establishment risks under evolving bilateral and EU-linked frameworks.

4. Strategic supply chain diversification

The partnership’s emphasis on economic security and resilient supply chains reflects broader geoeconomic recalibration. This enhances India’s positioning as a complementary manufacturing and technology base for Europe-facing operations.

Advisory lens: Foreign companies may consider phased capacity expansion in India, particularly in sectors aligned with advanced manufacturing, clean technologies, high-value engineering, and dual-use industrial inputs.

Conclusion

The establishment of the India-France Special Global Strategic Partnership signals a long-term commitment to structured, high-ambition cooperation across defense, technology, climate, economic security, and people-centric exchanges. Anchored by the Horizon 2047 Roadmap, the partnership aims to reinforce sovereignty, strategic autonomy, and resilience while contributing to a stable, inclusive, and rules-based international order. 

For businesses and investors, competitive advantage will depend on early integration into structured bilateral platforms rather than reactive, project-specific engagement.