Chapter 9

France

9.1 The Government of France started extending economic assistance to India in 1968 and total French assistance from April 1968 to March 1999 amounted to FF 15443.857 million approximately comprising Project assistance of FF 12935.302 million, non-project assistance of 1800.817 million, a grant of FF 297.55 million and a debt relief credit of FF 410 million.

9.2 The French assistance is at present tied to the imports and services. French Government makes commitments only against specific projects where contracts have been won by French companies and where a substantial value of French products/services are to be imported. We used to sign an umbrella protocol agreement with the French Government fixing allocations for specified projects. Separate financing agreements were then concluded for each project. However, due to change in French Government policy, no annual protocol is signed and assistance is considered on a project basis.

9.3 French Credit is in the form of mixed credit. The Indo-French Financial Protocol signed on 25.1.1998 envisages 50% Treasury Loan repayable within a period of 30 years with 10 years grace period at the rate of interest of 0.47% and 50% export credit repayable within 10 years period at consensual interest rate agreed to by OECD participants. French Credit has a concessionality of 35%, which is the lowest in comparison to all the bilateral donors. France gives pure soft loans only in exceptional cases and its grants have been restricted to a few small value technical cooperation projects.

9.4 The details of credits such as authorisation, utilisation, debt service payments etc. are given in Annex. I & III and details of grants given at Annex. II.