Govt looks at concluding Rafale deal in June: Manohar Parrikar

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New Delhi | May 26, 2016 6:53 PM

The government is looking at concluding the much-hyped multi billion Euro Rafale deal next month, more than a year after Prime Minister Narendra Modi...

Rafale dealThe deal was announced by PM Modi in April last year during his visit to France when he said India would purchase 36 Rafales in a government-to-government contract. (Reuters)

The government is looking at concluding the much-hyped multi billion Euro Rafale deal next month, more than a year after Prime Minister Narendra Modi had announced the purchase of 36 fighter jets during his visit to France.

“There is no reason why it should not be concluded in June. Not much is left. It is in the last phase,” Defence Minister Manohar Parrikar told PTI here in an interview.

Rejecting suggestions that there has been a delay in signing the contract for nearly 7.89 Billion Euros to procure the French fighter planes, the Minister said any such process takes at least 6-8 months.

“We started the process only in July last year. After Prime Minister’s statement in April, everything came to us. We asked them (French) for various options. We met them and finally one line was decided,” he said.

Noting that he is travelling for the next 8-10 days, the Minister said he will “see to it” that the deal is “concluded fast”.

“Things have to be placed properly on the table. They (negotiating team) now have to submit a report to me on what has been discussed. After that we have to discuss it in the Cabinet. We will first sign an Inter Government Agreement. All these things take 3-4 weeks,” he said.

The deal was announced by Modi in April last year during his visit to France when he said India would purchase 36 Rafales in a government-to-government contract.

Soon after the announcement, the Defence Ministry scrapped a separate process that was on to purchase 126 Rafales, built by French defence giant Dassault Aviation.

The current deal comes with the clause of delivering 50 per cent offsets, creating business worth at least 3 billion Euros for smaller Indian companies and generating thousands of new jobs in India through the offsets.

In fact, the toughest phase in the negotiations that began in July was to get the French to agree to 50 per cent offsets in the deal.

Initially, Dassault Aviation 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 French President Francois 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.

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