New Delhi: The negotiations over the purchase of 36 Rafale fighter aircraft by India from France have reportedly entered the “final stages” as both India and France have managed to narrow down their differences over the pricing. Speculation was rife that India and France are narrowing down on Euros 7.8 billion as the final price. Government sources said the deal has not been concluded yet but it is in “final stages”. The final deal could be clinched by the end of May this year. India has been negotiating hard to bring down the price of the Rafale deal.
The Rafales are manufactured by French firm Dassault that had earlier emerged as the lowest bidder and had almost bagged a global Tender floated by the Ministry of Defence (MoD) in 2007 for acquisition of 126 Medium Multi-role Combat Aircraft (MMRCA).
But after protracted negotiations between the MoD and Dassault made no headway, India scrapped the Tender and decided instead to buy 36 Rafales off-the-shelf directly from France in a Government-to-Government deal.
But the two sides once again hit the price roadblock. The price for 36 Rafales, as per the earlier tender, keeping the cost escalation and dollar rate in mind, reportedly comes to a little over Rs 65,000 crore. This includes the cost involved in making changes India has sought in the aircraft, including Israeli helmet mounted display and some specific weaponry, among others.
“The effort is to bring down the price to less than Euros 8 billion (Rs 59,000 crore),” sources were quoted by news agency reports, as saying, adding that French have more or less agreed to Indian terms.
The proposed deal reportedly comes with the clause of delivering 50 per cent offsets, creating business worth at least 3 billion Euros for smaller Indian companies and creating thousands of new jobs in India through the offsets.
The proposed deal for acquisition of 36 Rafale fighter with France had just recently hit a roadblock with India digging in its heels and insisting that France offers a lower price for the deal that is acceptable to it. Defence minister Manohar Parrikar had said a few weeks ago that he is a “tough negotiator” and wants the “best price” for Rafale fighter jets from France. “I am a tough negotiator. Let me save money for the nation,” Parrikar had told reporters here when asked why the deal has not been signed yet.
