With 2 days to go for France President Francois Hollande visit to India, all concerned are keeping fingers crossed whether the multi-billion dollar Rafale fighter jet deal will go through.
However, it’s not clear if India and France can reach an agreement on the nearly $8-billion combat plane deal during the French President’s visit. An inter-government framework agreement is expected to be signed during the visit of Hollande but a final contract will take time as the cost negotiations are still on.
At a DAC meeting headed by defence minister Manohar Parrikar held on January 11, progress on the negotiations for a final government-to-government agreement for Dassault Aviation’s Rafale jets were reviewed, but nothing was cleared.
While sources have indicated that the final cost has come to about 2-3 % more as it will be a government-to-government deal, Parrikar has expressed hope that the price of one Rafale will be 25% less. The deal could cost India close to $8 billion, which includes the cost of 36 fighter jets in fly-away condition.
According to the recent changes made to the Defence Procurement Procedures, defence deals over Rs 300 crore must be accompanied by investing 30% of the value of the contract in manufacturing in India.