No major breakthrough expected in Rafale deal during Narendra Modi visit

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New Delhi | Published: April 9, 2015 6:18:06 AM

No major breakthrough is expected in the multi-billion dollar Rafale deal during Prime Minister Narendra Modi's visit to France beginning today.

No major breakthrough is expected in the multi-billion dollar Rafale deal during Prime Minister Narendra Modi’s visit to France beginning today.

Though the French side is expected to raise the long-pending Medium Multi-Role Combat Aircraft deal during Modi’s visit, defence sources maintained that there are issues which continue to plague the project.

Moreover, the Cost Negotiation Committee, which is working out the final contract in negotiation with French firm Dassault Aviation, is yet to submit its report.

“Don’t link Prime Minister Modi’s trip to one particular deal as bilateral relationships are more than that,” sources said.

They added that no major breakthrough is expected during the visit.

Rafale was selected by India from among five bidders in 2012 since it was the lowest bidder.

While initially, the deal was expected to be around USD 10 billion, it is now estimated to be over USD 20 billion.

India is insisting that Dassault Aviation cannot renege on the Request for Proposal (RFP) clauses, which it had initially agreed to.

Even at political level, India has categorically told the French side that it must stick to the RFP, in which Dassault was the lowest bidder and hence was selected for the contract.

“The ball is in France’s court,” an Indian official had told PTI in January insisting that price tag submitted by Dassault has to be adhered to.

Dassault wants to raise the price to cover the increased cost of local production. However, Rafale CEO Eric Trappier has said pricing had remained the same from day one.

As per the RFP issued in 2007, the first 18 jets are to be imported and the rest 108 manufactured under licence by Hindustan Aeronautics Ltd (HAL).

The French Rafale and European Eurofighter Typhoon were the only two left in the race for 126 fighter plane deal after years of tests on technical and other aspects.

Dassault says that the price of Rafale will go up as the number of man-hours needed to make the jet in HAL factory was much more than what is needed in France.

“When the firm submitted its bid, it took everything into consideration. Now when it is the lowest bidder, how can it increase its prices,” questioned sources adding that the deal can be wrapped up soon if the French just stick to their commitments.

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