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C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 000338 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/01/2018 
TAGS: PGOV PREL MARR MASS KNNP KOMC KUNR FR IN
SUBJECT: SARKOZY'S VISIT TO INDIA LONG ON DRAMA, SHORT ON 
SUBSTANCE 
 
REF: NEW DELHI 277 
 
Classified By: POLCOUNS Ted Osius for reasons 1.4 (a,b,d) 
 
¶1.  (SBU) SUMMARY: President Sarkozy made a two-day stop in 
India amid a whirlwind of media speculation regarding 
whether his famous girlfriend, supermodel Carla Bruni, 
would accompany him.  Sarkozy's visit stimulated both 
governments to officially confirm that they have finalized 
their civil nuclear agreement, and generated the signing of 
significant corollary agreements for joint Indo-French 
civilian nuclear research.  Paris and New Delhi pledged to 
triple bilateral trade to USD 18 billion within five years, 
and with the GOI's blessing, France announced the opening 
in 2008 of new consulates in Kolkata and Bangalore and the 
formal establishment of the Agence Francaise de 
Developpement (AFD) in India.  The French left without 
inking any of the large defense deals which had been 
rumored, but the CEO of Dassault (manufacturer of the 
French Rafael, a competitor of Boeing and Lockheed Martin 
for the MRCA) made a tantalizing offer of full transfer of 
sensitive technology that if put into effect could prove 
too tempting for the GOI to refuse.  END SUMMARY. 
 
-- FRANCE AND INDIA ANNOUNCE FINALIZED CIV-NUKE DEAL -- 
 
¶2.  (C) MEA Undersecretary (West Europe/France) Biraja 
Prasad asserted to PolOff January 30 that the Indo-French 
agreement on civilian nuclear cooperation has been 
completed and that implementation could proceed after 
negotiations with the IAEA have been finalized and the 
exemption granted from the NSG.  Hugues de Longevialle, 
Nuclear Affairs Officer with the French Embassy in New 
Delhi, clarified to PolOff that the French agreement hardly 
differed from the 123 Agreement, since, he said, the Indian 
side relied on the 123 to push their positions.  The 
agreement is quite similar to other bilateral agreements 
that the French have done, de Longevialle noted, with the 
exception of the fuel supply assurance and strategic 
reserve clauses, which mirror the 123.  When asked if the 
French agreement would allow for fuel cycle assistance 
(i.e. enrichment and reprocessing technology [ENR] 
transfers), de Longevialle attested that ENR transfers are 
neither allowed nor forbidden, since the agreement, like 
the 123, is only a framework arrangement.   De Longevialle 
underlined that the French agreement is in complete 
compliance with France's international agreements, and that 
it remains contingent upon not just IAEA and NSG approval 
but also the EC under the EURATOM agreement.  Sandeep 
Dixit, Hindustan Times reporter, revealed to PolOff that 
during Sarkozy's visit the Areva subsidiary Framatome had 
urged the GOI to sign an agreement for France to build 
additional reactors in India but that this offer had been 
rebuffed. 
 
... WHILE ADVANI SNIPES AT THE US-INDIA 123 AGREEMENT 
 
¶3.  (C) First Secretary Guillaume Bazard of the French 
Embassy related to PolOff that BJP Leader L.K. Advani 
responded to President Sarkozy's query about why the BJP 
did not support the US 123 Agreement by saying that the 
negotiation process was "unacceptable" and the deal itself 
"contrary to India's sovereignty."  He added that the 
Indian government had not sufficiently consulted with the 
BJP before agreeing to the deal. 
 
-- INDIA BUYS INTO FRENCH RESEARCH REACTOR PROGRAM -- 
 
¶4.  (C) The GOF and GOI signed an agreement for 
collaboration on the Jules Horowitz research reactor in 
Cadarache, France. De Longevialle explained that India has 
purchased three percent access rights to conduct research 
on the reactor by financing three percent of the 
construction cost, and will send scientists from India's 
Department of Atomic Energy (DAE) to France for this 
research. The agreement, expected to be completed by 2014, 
will not result in any transfer of technology or materials. 
De Longevialle stated that India was eager to engage in 
such cooperation because it can test new types of fuel for 
the next generation of reactors.  Currently, India uses its 
reactors only for the three-stage program research.  He 
 
NEW DELHI 00000338  002 OF 003 
 
 
speculated that the Indians view the research agreement as 
elevating their nuclear status. 
 
-- IN DELHI, FRANCE WELCOMES INDIA WITH OPEN ARMS -- 
 
¶5.  (C) The GOF expressed its strong support for India's 
inclusion as a permanent member of the United Nations 
Security Council and G8 negotiations. Citing President 
Sarkozy, Bazard told PolOff that France called for an 
enlargement of the G8 to the G13 including emerging 
countries India, China, Brazil and South Africa, stating 
that India was not given as much credit as it should 
receive within the international community.  The GOI 
welcomed France's announcement to open two new French 
consulates in Kolkata and Bangalore in 2008 and an 
agreement to formally establish the Agence Francaise de 
Developpement (AFD) in India. 
 
...AND OPEN POCKETBOOKS 
 
¶6.  (U) Bilateral trade stood at USD six billion in 
2006-2007, putting France as India's eighth largest trading 
partner. With France's upcoming Presidency of the EU, the 
two countries reinforced their aim to achieve an ambitious 
target of USD 18 billion in bilateral trade by 2012 and 
significantly stepping up investments which to date have 
been modest.  France is India's eight largest foreign 
investor, with cumulative Foreign Direct Investment (FDI) 
through October 2007 of USD 661 million. 
 
-- DESPITE EUROCOPTER'S AGONY, DEFENSE COOPERATION MOVES 
FORWARD -- 
 
¶7.  (C) After announcing in February 2007 that the 
French-German aircraft consortium Eurocopter had won the 
competition to supply the Indian army with 197 new military 
helicopters, the GOI scrapped the USD 600 million deal in 
December, citing irregularities in the selection process. 
The GOF immediately delivered a demarche of protest to the 
GOI in December, but as related to us by Bazard, President 
Sarkozy stuck a more conciliatory tone during this visit, 
expressing his understanding for the Indian authorities' 
decision.  Both countries reiterated their aspirations to 
consolidate their relationship by increasing the frequency 
of their military joint-operations and cooperation, and 
signed an agreement for the Protection of Classified 
Information and Security. 
 
-- DASSAULT MAKES STRONG PITCHES FOR RAFAEL, MIRAGE JETS -- 
 
¶8.  (C) Despite predictions by much of the Indian press 
prior to Sarkozy's visit, India did not sign an agreement 
with France for a multi-million dollar upgrade for its 
Dassault-made Indian Air Force Mirage jets.  Dassault, 
which is fielding its Rafael in the ongoing USD 10 billion 
competition to supply India with multi-role combat aircraft 
(MRCA), sent its CEO Charles Edelstenne to accompany 
Sarkozy and pitch the Rafael.  Dixit relayed that 
Edelstenne has promised New Delhi complete and 
unconditional transfer of sensitive technology (ToT) if 
Dassault wins the competition, in contrast to the U.S., 
which, Edelstenne reportedly asserted, has cumbersome 
strings attached to its defense sales.  Edelstenne also 
described the Lockheed Martin F-16 as "one generation 
behind" the Rafael, and that problems with Russian 
equipment (alluding to the MIG-29, another competitor) 
"always exists." 
 
-- COMMENT: MODEST GALLIC GAINS FOR NOW; MORE DOWN THE 
ROAD, PEUT-ETRE -- 
 
¶9.  (C) COMMENT: Unfortunately for Sarkozy, the Indian 
public seemed more seized on sordid speculation whether his 
famous girlfriend Carla Bruni would accompany him to Delhi 
and the Taj Mahal, and if so what sort of diplomatic 
protocols the GOI would afford her, than on the substance 
of the visit. Ms. Bruni stayed home, and Sarkozy was left 
with a group of around 300 businessmen and scientists to 
accompany him.  In the end, Sarkozy was able to walk away 
with a few deliverables, but in comparison to the huge 
public relations bounce President Putin received as last 
 
NEW DELHI 00000338  003 OF 003 
 
 
year's Republic Day Guest of Honor, or the impressive 
public diplomacy PM Gordon Brown achieved here earlier in 
the week, this visit generally fizzled.  The agreement to 
offer India a share of the advanced Jules Horowitz reactor 
was the most notable immediate takeaway from this visit, 
although MOUs on nuclear cooperation have the French teed 
up to pounce on the Indian civil nuclear market once the 
IAEA and NSG actions take place.  French defense giants 
also went home essentially empty handed, having failed to 
ink the lucrative Mirage upgrade deal, which the Israelis 
could still snatch away on price, and having given up on 
overturning the GOI decision to trash the Eurocopter deal 
-- although we can expect an all-out effort from the French 
on the rebid, which now includes over 100 air force 
helicopters in addition to the nearly 200 army helos. Both 
the French Embassy here and MEA labeled this visit a grand 
success, but to us it seemed more like a petit success. 
END COMMENT. 
 
MULFORD