Fabius and Modi
Laurent Fabius offered $1.4 billion investment in Indian infrastructure and forwarded formal invitation to Modi to visit Paris.Reuters

There has been no progress in the jet deal yet, however, France has proposed a $1.4 billion investment for India's infrastructure and urban development.

French Foreign Affairs Minister Laurent Fabius on Tuesday announced the proposal to provide a credit line of $1.4 billion over a period of three years, to be delivered by French Development Agency. Fabius, who arrived in New Delhi on Monday, is the first foreign minister visiting India after NDA government's tenure began in May this year.

France which is focusing a lot on coping up with global warming and working on strategies to combat adversely changing climate, is keen on further cooperation with India in green sector.

The areas France wishes to work on with India includes carbon-free energy—offshore wind energy, ocean thermal energy, civilian nuclear energy, water-management in the context of various projects on rivers in India, urban development, and space and earth observation.

Fabius suggested these proposals to Minister of State for Environment, Forests and Climate Change Prakash Javadekar in a meeting on Tuesday.

"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," Reuters quoted Fabius.

Although the discussions on Rafale deal did not reach any conclusion in Tuesday's meeting, Fabius seems to be confident on getting the contract.

"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. For us, the earlier the better ... but it's a normal negotiation and the way it must be," he said.

However, the deal has faced criticism from experts and analysts who suggests that Dassault Aviation, Rafale jets' manufacturing company has high probability of shutting down if India scraps the deal, as it has no other contracts in hand.

Dassault Aviation, other than India, is into negotiations with Qatar over a deal of 72 Rafale jets, according to news reports.

The two sides are on negotiating terms about the Rafale fighters deal since January 2012, but have slowed down due to high cost and disagreements over work sharing.

"I think we should reconsider this acquisition. The costs are out of control," Center for Policy Alternatives President Mohan Guruswamy told The Telegraph.

However, after Modi's accession as India's new Prime Minister, both the aviation company and France are expecting to sign this deal by the end of 2014. France is said to be keen on sharing technology with India, which is a part of the Rafale deal, and wish to establish industries in India where most of the jets will be built.

"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, Fabius said.

Although, India is open to foreign investment in the infrastructure sector where it needs $1 trillion to boost shattering infrastructures such as railways, cities and roads, it might move slow with the Rafale deal as it is facing criticism from analysts and experts.

In the meanwhile, France has accepted India's request to bring back 39 Indians captured in Iraq. Fabius has reportedly said that considering the sensitivity of the matter, the intelligence of both the nations is acting upon it with privacy.

He also handed over French President Francois Hollande's formal invitation to Modi to visit Paris.