In his first meeting with his French counterpart Jean-Yves Le Drian, Indian Defense Minister Manohar Parrikar raised the MMRCA deal with Dassault and said it would be "resolved in a fast-tracked manner".
This is the second visit to India by the French defense minister in the past six months and the first since Manohar Parrikar became the defense minister.
Dassault won the MMRCA deal to supply 126 fighters to India in 2012 after lodging a lower bid than Eurofighter for a tender with an estimated value of $12 billion.
Negotiations between India and France have been dragging for over two years since the French company was declared the finalist in the $11 billion program to purchase the Rafale fighter planes.
Dassault has had reservations over HAL's capacity to absorb complex technology and wanted to rope in other private sector companies for manufacturing the jets in India. However, New Delhi has always maintained that HAL would remain a lead player.
Offset hurdles have been the major road block to signing the deal. In 2013, Dassault wrote to the Indian MoD demanding it be given the overall responsibility of the project and clearly identify HALs role.
Despite the ministry asserting that HAL would act as the project’s ‘lead-integrator’ as per the terms of the RFI issued in 2007, Dassault in its letter insisted that it be given the freedom to decide on the quantum of work to be shared between companies.
According to the original terms, 18 of the 126 planes are to be purchased directly from Dassault, while HAL will manufacture the other 108 under a licence at an upcoming facility in Bangalore.
"Both sides agreed to take forward the strategic co-operation between the two countries. They discussed all issues including Rafale. It was decided that whatever differences still existed would be resolved in a fast-track manner," said Indian defence ministry spokesman Sitanshu Kar.