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.
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
Indian Defense Minister Manohar Parrikar, on Thursday said that India will not be placing any follow up orders for more Rafale fighters. This puts at rest on speculations for setting up a manufacturing unit in India for additional numbers of Rafale
Import of Dassault Rafale aircraft into India will be tax free, according to sources in the Indian finance ministry. “Since, it is government-to-government (G2G) deal, it will not attract any duty (basic custom duty, special additional duty SAD or counter veiling duty CVD),” a senior Finance Ministry official was quoted as saying by the Businessline daily
Dassault may be signing deals with Egypt and Qatar to sell 12 Rafale fighter jets to each of them within the next two months. Egypt and Qatar could convert their options on 12 additional Rafale fighters each by the end of the year and order 24 aircraft altogether, according to the LaTribune publication
Frances Dassault Aviation is not attaching any firm time limit to the conclusion of negotiation and the signing of a contract with India on the purchase of 36 Rafale aircraft. Dassault Aviation chief Eric Trappier said on Friday that the signing of the Indian order could happen “in the weeks or months ahead
Poland and other East-European NATO allies threatened to cancel defence deals with France if it sold the Mistral Warship to Russia. This information has been revealed in recently released transcripts from the French Senate's International Affairs Committee that Eastern European NATO member states have put "significant pressure" to scrap the USD$ 1
France has agreed to an Indian government demand to invest a part of the multi-billion dollar Dassault Rafale fighter jet purchase in ‘Make In India program as part of the deal. “The French manufacturers of the Rafale fighter will commit to making investments worth $4
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