Millennium Post

Rafale deal: French team likely to visit India in May

A high-level team from France is expected to arrive here May month to firm up the order for the purchase of 36 Rafale fighter aircraft by India as both countries have managed to narrow down their differences over pricing.

The development comes nearly four months after Prime Minister Narendra Modi and French President Francois Hollande signed a memorandum of agreement to purchase 36 Rafale combat jets.

The Indian side has been negotiating hard to bring down the price with Defence Minister Manohar Parrikar refusing to buckle under pressure even as questions were being raised about the delay in signing the contract. The deal comes with the clause of 50 per cent offsets, which will be a bonanza for the domestic industry as it will lead to business worth at least 3 billion Euros and creating new jobs in India.

The tough part of the negotiations that began in July 2015 was to get the French side to agree to 50 per cent offsets in the deal.

Initially, Dassault Aviation, makers of Rafale, was willing to agree to reinvest only 30 per cent of the value of its contract in Indian entities to meet the offset obligations.

The French side finally agreed to invest 50 per cent of the value following a phone conversation between Modi and Hollande late last year.

The commercial negotiations, as in the pricing of the planes, equipment and other issues, actually began only in mid-January this year.

“It is correct to say that differences over pricing as more or less being settled. A final deal should take place next month if all matters go as scheduled,” a defence source said.
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