French Defence Minister Jean-Yves Le Drian is scheduled to visit India shortly to oversee the conclusion of the inter-governmental agreement for direct purchase of 36 Rafale fighter jets and clear the path for signing the final agreement.
Informed sources said Mr. Drian was visiting India specifically for the Rafale deal and was likely to be in Delhi on January 18.
As reported by The Hindu earlier, both sides are working to conclude the deal ahead of French President Fancois Hollande’s visit to India as the chief guest for the Republic Day parade on January 26. “The deal was announced at the highest level politically; so both sides want to make sure it is adhered to,” officials said earlier.
Defence Minister Manohar Parrikar said recently that the deal was “in the final stages of price negotiations” and issues such as the 50 per cent offset clause have “almost been sorted out”.
Prime Minister Narendra Modi, during his visit to Paris last April, had announced the direct purchase of 36 Rafale fighter aircraft from France through a government-to-government deal as quickly as possible in view of the “critical operational necessity” of the Air Force, sidestepping the original medium multi-role combat aircraft (MMRCA) contest.
However, negotiations by a high-powered committee set up to reach the terms and conditions of the deal and recommend a draft agreement hit a road block because of differences, especially over offsets, unit price and changes in configuration.
The offset clause applies for defence deals over Rs. 300 crore under which companies are to invest 30 per cent of the value of the contract back in the country. For the MMRCA deal, the government had fixed it at 50 per cent. In addition, the Air Force wanted some structural changes on the aircraft.
France had insisted that the cost of the deal would go up and delivery timelines delayed due to the offset clause and changes sought. Official sources said a workaround had now been agreed upon.
