1. Negotiations on Rafale deal far from over, Manohar Parrikar tells Rajya Sabha

Negotiations on Rafale deal far from over, Manohar Parrikar tells Rajya Sabha

Negotiations on the terms and conditions of the supply of 36 `Rafale’ fighter aircraft, including those related to total cost, actual delivery timelines and guarantee period, have not been concluded.

By: | New Delhi | Updated: May 4, 2016 9:14 AM
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As reported by the FE earlier, the cost of the 36 Rafale, as per the earlier tender while keeping the cost escalation into account, comes to around Rs 65,000 crore. Despite hard bargaining with the French company, a very simple cash & carry deal is far from being settled. (PTI)

Negotiations on the terms and conditions of the supply of 36 `Rafale’ fighter aircraft, including those related to total cost, actual delivery timelines and guarantee period, have not been concluded.

Defence minister Manohar Parrikar informed the Rajya Sabha in a written reply on Tuesday, “India and France have agreed to conclude an Inter-Governmental Agreement (IGA) on the supply of 36 Rafale Aircraft.”

To another question Parrikar said, “Ministry of Law & Justice have made certain observations and the same will be adequately taken into account while finalizing the IGA, which is still under negotiations”.

The price as accepted by India is expected to be 7.89 billion euros or Rs 60,000 crore and that has been largely agreed upon.

An Indian negotiating team has been constituted to discuss the terms and conditions of the procurement of 36 Rafale jets and recommend a draft agreement. The meetings of the Indian team with the French side are underway, Parrikar said.

As per the India-France joint statement issued during Prime Minister Narendra Modi’s visit to France, India told the government of France that in view of the critical operational necessity for Multirole Combat Aircraft for Indian Air Force (IAF), the Indian government would like to acquire 36 Rafale jets in fly-away condition. Both the sides also agreed to conclude an Inter-Governmental Agreement (IGA) for the supply of the aircraft.

As reported by the FE earlier, the cost of the 36 Rafale, as per the earlier tender while keeping the cost escalation into account, comes to around Rs 65,000 crore. Despite hard bargaining with the French company, a very simple cash & carry deal is far from being settled.

On January 11, at the Defence Acquisition Council under defence minister Parrikar had met where progress on the negotiations for a final government-to-government agreement for Dassault Aviation’s `Rafale’ were reveiwed, but nothing was cleared.

For a deal that is being supported by the PMO, sources told FE, “India is still in the process of deciding whether there is a need to order of all spare parts that the aircraft will need for a period of either five or ten years. And the negotiations are still on what kind of financial penalties can be imposed on Dassault Aviation Company which is making the combat plane if the performance was unsatifactory.”

Since the Indian government is planning to buy 36 aircraft from France through a government-to-government deal, the French are not willing to accept New Delhi’s demand for enforceable guarantees, delivery, availability and delivery of the combat machines.

Both sides had hoped to wrap up the strategic order during President Francois Hollande’s India visit during Republic Day celebration in January, but hard bargaining on price stalled a final result. The French company had recently said that it was also working on deals to sell Rafale jets to Malaysia and the United Arab Emirates.

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