France would immediately start investing $1 billion in India annually which will be scaled up later, Prime Minister Narendra Modi announced after discussions with French President Francois Hollande here on Sunday.

The two sides also signed 16 MoUs, including one for manufacture of helicopters in India. Hollande, who began his three-day India visit with a stopover at Chandigarh on Sunday, said his country trusts Indian economy moments after Prime Minister Narendra Modi assured foreign businessmen of a stable and predictable tax system in the country.

Modi was addressing business leaders of the two countries in presence of the French president. Describing the India-France relationship as “made for each other”, Modi also sought to allay fears of a return of the much feared retrospective taxation.

“Retrospective tax is a matter of past. That chapter will not be opened again. We are ensuring that neither this government nor the future governments can open this chapter,” Modi said.

He said investors should know about the taxation system in the country over the next 15 years. Earlier, the two leaders, accompanied by a large group of officials and CEOs, took a stroll in the famous Rock Garden.

On his part, Hollande said his visit to India was aimed at consolidating the strategic partnership and implement decisions taken during Modi’s visit to France. He said the agreements signed should be implemented and turned into reality.

The French president said the two countries can work in areas like solar energy, technology transfer, transport, roads, space industry, health, agro, and nuclear energy.

Both the leaders’ comments came during the meeting of Indo-French CEOs Forum and the subsequent India-France Business Summit, jointly organised by the Centre, Confederation of Indian Industries and MEDEF International.

Modi and Hollande outlined the areas where both the countries could work together, including combating terrorism, cyber security, climate change, defence, urban development and renewable energy. They also agreed that terrorism remains a challenge and both need to work together.

On enhancing relationship, Hollande said France would want to share technology with India. “France trusts Indian economy,” Hollande said as he referred to the troubles Chinese economy was facing. The French president also assured cooperation in a variety of fields.

“India has the talent and France has technology,” Modi said as he sought closer economic cooperation between both the countries. Hard-selling India’s potential, he reminded French businessmen that India has skilled manpower, which can be a major source of strength, and using this talent pool can bring down costs.

Trying to alleviate any fears of negative taxation, he said, “I am for stable governance and predictable taxation system.This government is known for stable and predictable tax regime,” he said.