Negotiations between India and France on the purchase of 36 Dassault Rafale aircraft could drag on till this year end due to differences over price among other issues.
France wants the Rafale fighters for India to be priced at the same level as what has been contracted with Egypt and Qatar, French media reported earlier this week. India and France started a negotiating for a new deal for 36 fighters in May this year after abandoning negotiations for 126 fighters which had dragged on three years.
While the price asked by France this time around, reported to be US$8 billion, is more in terms of unit price than under the previous deal, the French side is insisting that it cannot sell at a price below what has been sold to Egypt and Qatar. France is in the running for other sales of the Rafale, notably with the UAE and Malaysia and wishes to maintain its price level in these markets.
“Had India closed the deal for 126 fighters, it would have got a very good price,” said a French source on condition of anonymity. In three years, the price of the Rafale has gone up for all customers including the French Air Force and the Indian order is cut by three fourths.
The Egypt and Qatar orders are together worth more than the Indian order and potential new orders could further push the Indian deal lower in priority. Naturally India would have to pay more, he added.
An Indian news agency report said today that the negotiations could take a month more and that the two sides are working at a hectic pace with every effort being made to wrap up the talks fast. French defence minister, too has sounded optimistic about the Indian contract in recent weeks. “It is only a procedure, I have no concerns”, he said when asked by reporters about the delay in the Indian deal while attending an event in the Summer University of Defence in Strasbourg.
There is no word if India and France have managed to bridge their other points of differences besides the price which is the offsets clause, weapons and life cycle support in Indian bases.