India and France are in the final stages of concluding a contract for the purchase of 36 fourth generation multirole fighter jets for the Indian Air Force, according to Indian government sources. The government-to-government deal is expected to be concluded by the end of May 2016, The Indian Express reports.
Both sides purportedly finally agreed on the price for the 36 off-the-shelf Dassault Rafale twin-engine, fourth generation multirole fighter aircraft. “It is correct to say that differences over pricing as more or less being settled. A final deal should take place next month if all matters go as scheduled,” one Indian defense official said.
“The effort is to bring down the price to less than Euros 8 billion ($9 billion),” another source told The Indian Express. While no contract has been signed to date the negotiations are in the “final stages,” another defense official said. The contract is likely to be signed in three weeks’ time when a high-level French delegation is slated to visit New Delhi.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The contract contains an offset clause which specifies that France will have to invest 50 percent of the contract value as offsets in India including aeronautics, electronics and micro-electronics technologies.
“Companies like Safran and Thales will join Dassault in providing state-of-art technologies in stealth, radar, thrust vectoring for missiles and materials for electronics and micro-electronics,” The Indian Express notes.
While the offset clause was one of the main sticking points during the negotiations, other issues included the delivery date of the fighter jets, as well as technical issues. “The Indian Air Force wanted a customized version of the aircraft including modifications and reconfigurations to allow the installation of Indian-made and commercial-off-the-shelf systems and weapons,” I explained back in January.
During French President François Hollande’s visit to India in January 2016, an intergovernmental agreement detailing the technical aspects of the defense deal was signed by Hollande and his Indian counterpart, Prime Minister Narendra Modi.
As I reported previously (See: “Confirmed: India to Buy Only 36 Rafale Fighter Jets”):
Initially, the MMRCA [medium multi-role combat aircraft] project envisioned that India’s Hindustan Aeronautics Limited (HAL) would build 108 out of a 126 total Rafale jets locally, with the first batch of 18 fighter jets directly delivered from France in flyaway condition.
However, New Delhi unexpectedly announced in April of this year that it would only purchase 36 French-made Rafale fighters instead of the original 126.(…)
The price tag for the 36 off-the-shelf Rafale will substantially be cheaper since France is no longer obligated to build the planes in India. (…)
The delivery of the first aircraft is expected to occur 18 months after the signing of contract.