Rafale deal likely to see some progress

Amid a slew of areas of cooperation to be announced by India and France on Monday, all expectations are on the government-to-government agreement for the purchase of 36 Rafale fighter jets.

In an indication of the progress, French President Francois Hollande said in Chandigarh on Sunday that one of the main aims of his visit was to “implement the decisions taken during Prime Minister Narendra Modi’s visit to France.” While the final deal seems unlikely owing to differences over pricing, the conclusion of the government-to-government agreement seems on the cards.

“The Rafale is a major project for India and France. It will pave the way for an unprecedented industrial and technological cooperation, including ‘Make in India’, for the next 40 years. Agreeing on the technicalities of this arrangement obviously takes time, but we are on the right track,” he said in an interview to PTI.

Will the fighter get a cheaper price tag?

A senior government official, speaking about the Rafale fighter jet deal, said efforts were on to reduce the price per aircraft by 20 per cent, which is now over Euro 100 million or Rs. 800 crore, along with the weapons package.

In a surprise move, Prime Minister Narendra Modi, during his visit to Paris last April, announced the decision on the direct purchase of 36 Rafale fighter jets, citing the “critical operational necessity” of the Indian Air Force. Teams from both countries have been holding hectic talks over the last few days to finalize the draft of the government-to-government agreement, which will lead to the commercial deal. However, the final deal has been delayed by differences over pricing and delivery schedule. “My impression is essentially the hurdles have been removed,” the former Ambassador, Kanwal Sibal, told The Hindu, referring to the resolution of the offset issue.

Helicopter project

Mahindra of India and aircraft major Airbus signed an agreement to establish a joint venture to build military helicopters in India under the ‘Make in India’ initiative.

This is the second helicopter project under the Make in India drive of the government after the Kamov utility helicopter project with Russia.

“The companies are proposing to set-up a final assembly line in India, develop tier-1 and tier-2 suppliers and make extensive transfer of technology, with the intent to ultimately achieve 50% indigenous content,” Airbus said in a statement

The two companies have already initiated industrial relationship to produce helicopter parts locally and are defining additional work packages to be industrialized in India in the case The JV wins a project.

Other deals likely to be discussed by the two leaders in their bilateral talks are additional Scorpene submarines, six of which are currently under construction in Mumbai and joint development of medium range Surface to Air Missile (MR-SAM), Maitri.