French Foreign Minister Laurent Fabius during his visit to India with India's Prime Minister Narendra Modi

France offers India �1bn for infrastructure development

France has offered a €1bn credit line to India to help fund the country’s sustainable and urban development projects.

The credit line would be available over three years and would be delivered through the French Development Agency.

India desperately needs about a trillion dollars of investment to build new roads, railways and cities. India’s government is on a quest to attract foreign investors to help them meet the goals by 2017.

India’s new Prime Minister Narendra Modi, who took office in May, has made the redevelopment of infrastructure one of the core targets of his policy

Fabius 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 $12bn 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. 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 evaluation.

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.

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 infrastructure schemes.

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 cities.

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