Modi hopeful of progress on Rafale, Areva n-deal

Prime Minister Narendra Modi has sparked fresh speculation over a possible breakthrough on the Rafale aircraft deal and an agreement on the Jaitapur nuclear power plant in Maharashtra during his visit to France, with indications that negotiations are heading in a positive manner.

In an interview to the French newspaper Le Figaro , Mr. Modi said, “France is one of our closest strategic partners, and significant opportunities for cooperation exist with India, particularly in the fields of nuclear energy and defence.” Asked specifically about the possibility of an announcement on buying 126 Rafale fighter aircraft, Mr. Modi’s written answer was, “We should be able to move forward on a mutually acceptable basis.”

Earlier this week, French President Francois Hollande denied any announcement on the Rafale deal “before the visit of Prime Minister Modi” and he did not want the visit to be “put in the context of a contract,” fuelling speculation about some movement during the visit.

Stuck since 2012

The $20-billion deal for 126 Rafale fighter aircraft has been stuck since 2012 over price and delivery guarantees. “Especially given that negotiations have dragged on for more than three years, it is important to give them some direction now,” the former Ambassador to France Rakesh Sood told The Hindu .

Mr. Modi reached Paris on Thursday ahead of his bilateral talks with Mr. Hollande. He is expected to engage with French CEOs from infrastructure companies, including energy and defence firms. Any movement on the two big outstanding issues of the Rafale negotiations or on nuclear negotiations for the Jaitapur plant would be a positive signal for other investors, officials said ahead of the talks, while not confirming there would be any.

Mr. Modi, who will meet Mr. Hollande during bilateral negotiations, followed by a ride down the Seine, is expected to try and iron out some of the larger issues on both sets of negotiations during the day. “Unlike the Indo-U.S. nuclear deal, the Indo-France deal is stuck at a technical-commercial stage, and not a political one, so it will be harder for the leaders to announce a breakthrough similar to the one during the Obama visit,” said Mr. Sood, who was formerly India’s nuclear envoy.

On the nuclear issue, Mr. Modi said he was hopeful “to see a result soon”. Negotiations between Areva and Nuclear Power Corporation of India Ltd. have been stuck over pricing and technical difficulties. Another hurdle has emerged after Areva’s reactor (European Pressure Reactors or EPRs) developed an “anomaly” during tests for its 1650 MWe reactor in Flamanville, which is similar to the one planned in Jaitapur. According to a release from the nuclear regulatory authority ASN on April 7, “Initial measurements confirmed the presence of this anomaly in the reactor vessel head and reactor vessel bottom head of the Flamanville EPR.” Safety concerns over the Jaitapur reactor had earlier held up land acquisition in the area, and nuclear activists and the BJP’s ally Shiv Sena continue to oppose the French project in Maharashtra. Asked if a deal was still possible in Paris, an official told The Hindu they were “burning the midnight oil.”