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French officials to visit India to rescue stalled Rafale jet deal

A French delegation will visit New Delhi this month to try to salvage an agreement to supply 126 Rafale fighter jets to the Indian Air Force, in one of the world’s biggest defence deals, which has hit a snag over the local assembly of the planes.

India is insisting that France’s Dassault Aviation take full responsibility for the production of the aircraft at a state-ran facility in Bangalore under the 2012 bid offer, Indian defence ministry officials said.

France has said it will help Hindustan Aeronautics Ltd stick to delivery schedules, but that it cannot give guarantees for production of the aircraft made at a facility over which it has no administrative or expert control.

Military experts say the deal could cost India $20 billion, double the original estimate, because of the benchmarking of aircraft prices, a sharp drop in the value of the Indian rupee and a roughly 5 percent annual cost increase.

The Rafale fighter beat the Swedish Gripen, the Russian MiG-35, the U.S.-built F-18 and F-16 and, finally, the Eurofighter, in a decade-long selection process for a new Indian multi-role combat aircraft, as Dassault was the lowest bidder on up-front and lifecycle costs over 40 years. But three years on, the sides are far from signing the contract and an Indian defence source said price negotiations were on hold until the issue of licensed production was resolved in line with the original request for proposals (RFP) floated by the Indian defence ministry.
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