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04:28 PM, August 12, 2015
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Price, Tech specs, Offsets Threaten To Delay Indian Dassault Rafale Purchase
Indian Prime Minister Narendra Modi along with French Francois Hollande during the announcement of Rafale deal in April this year

Differences over price, technical specifications and offsets are threatening to derail or substantially delay negotiations to purchase 36 Dassault Rafale aircraft by India.

While India is going by the price arrived at during the previous negotiations to purchase 126 aircraft,  Dassault is reportedly asking for a new price since this a completely new negotiation. Reuters reported today quoting unknown Indian defence sector sources that the two parties disagree on the unit price.

India is insisting on a price below US$ 200 million price per aircraft,  a figure under the previous negotiations to purchase 126 aircraft since there is no transfer of technology. The French side is reportedly insisting on the ‘frozen price’ since the aircraft to be delivered to India should be of the same configuration as agreed to under the previous negotiations.

While there was a provision for offsets of 50% of the value of the contract under the previous contract, the French want the offsets to be capped at 30% and sufficient time be given to implement them which would eventually increase the cost of contract.

A French news website, Usinenouvelle reported that the Indian Air Force (IAF) wants the  Rafale aircraft to be equipped with the latest weapons, while under the Indo-French agreement for the new contract, the configuration should be the same as under the previous contract negotiations.

According to a French source close to the discussions quoted by Usinenouvelle, “differences of priorities in India are delaying the process, the air force focusing on arms and the Ministry of Defence on offsets.”

From the beginning, the IAF wants more weapons than they have already selected, while the Indian government requires" offsets, summarizes the website.

There have been no official comments from the Indian MoD or the French government.

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