At long last, India close to deal with France to buy 36 Rafale fighter jets for Rs 60,000 crore

NEW DELHI: India and France are finally close to inking the around Rs 60,000 crore deal to acquire 36 Rafale fighter jets for the IAF after hard-nosed bargaining for over an year since the Modi-Hollande summit in Paris on April 10 last year gave the go-ahead for the negotiations.



Defence sources on Friday said the actual contract "could" be inked "within a month or so" since the negotiations are "moving in a positive direction towards conclusion".



The price is likely to settle around 7.8 billion euros or Rs 59,500 crore or so, said sources.



This comes after France, knowing fully well that India is desperate to induct new fighters and is committed to the deal, apparently began the commercial negotiations with a figure of over Rs 80,000 crore (11 billion euros) for the 36 Rafales, which included the entire weapons package, training and the 50% offsets clause.



But India kept on pushing for an overall price of around Rs 60,000 crore. The final price will, of course, depend on the support and spares package that is finalized.

As was reported earlier by TOI, the inter-governmental agreement (IGA) and the actual multi-billion dollar contract could not be inked during President Francois Hollande's visit to India as the chief guest for the January 26 Republic Day parade due to the persisting differences between the two countries.

Unlike the now-scrapped $ 20 billion MMRCA (medium multi-role combat aircraft) project to acquire 126 fighters, which included 108 jets to be built in India, the 36 Rafale fighters are to be directly acquired from France in "a flyaway condition" without any Make in India component. The deliveries are slated to begin two-three years after the contract is actually inked.

The ongoing negotiations were reminiscent of the deadlocked price negotiations for the original MMRCA project after Rafale was selected over five contenders — including the Eurofighter Typhoon and the American F/A-18 and F-16 -- in January 2012. Under the MMRCA project, the first 18 fighters were to be imported from France with the remaining 108 being made by defence PSU Hindustan Aeronautics after transfer of technology.

The Modi government had cited IAF's "critical operational necessity" since the force is currently down to just 33 fighter squadrons when it is authorised 42 to tackle the collusive threat from China and Pakistan, as well as the need to cut time and costs, to go in for the direct acquisition of 36 Rafales in a government-to-government deal after scrapping the entire MMRCA project.

While the current negotiations are only for 36 Rafales, less than one-third of the 126 envisaged under the MMRCA project, the new contract will have the mandatory clause for acquisition of another 18 jets under the 50% follow-on order option at the same price. The 36 jets are to be delivered in the same configuration as were tested and approved by the IAF during extensive field trials in the MMRCA project.

(Source : timesofindia.indiatimes.com)

Newer Post Older Post