Headlines
Rafale fighter deal to get formal nod, Indian partner awaited
New Delhi, May 3
French Defence Minister
Jean-Yves Le Drian arrives here on Monday to sign the formal deal for
supplying 36 Rafale aircraft, the medium multi-role combat fighters of
Dassault, to the Indian Air Force as agreed during Prime Minister
Narendra Modi's visit to Paris last month, officials said.
Also
keenly watched will be: Which Indian firm Dassult picks as a partner
for a manufacturing base in India. Officials explained the main reason
why the Indian prime minister had agreed so fast to take the deal
forward is it fit well into his "Make in India" campaign.
"So a joint venture partner will be key and let's see," an official said.
The
basic agreement is expected to be signed between France and India soon
after similar pacts Paris entered into with Egypt and Qatar for 24
Rafael fighters each. The value of the deals with Egypt and Qatar is
around 7.1 billion each, while with India it is in the region of $9
billion (Rs.55,000 crore), officials said.
"We are aware that
Dassault will have large number of aircraft to deliver. If we take the
orders from India, Egypt and Qatar together, the number of aircraft
will be 84. So delivery is certainly an issue and we will raise it
during the defence minister's visit," a senior official in the know
said.
"I'm also told the rate of production for each Rafale is
around one month," said the official. "But we've had a 30-year
association with Dassault, thanks to the Mirage 2000 programme. This was
a pretty successful deal. So deliveries will happen, we will also have
good safeguards."
Explaining the finer contours of the deal,
officials said that it could be an agreement both between the two
governments and their respective defence ministries, as also with
Dassault Aviation -- as this will give India a guarantee from the
French government, along with the flexibility for the company on other
aspects.
For example, the deal -- among the first to be entered
into under the Indian government's new offsets programme -- will
require the French to invest around 30-50 percent of the value of the
contract in India for manufacturing units.
This will call for
some collaborations and joint ventures in India for Dassault. Defence
Secretary R.K. Mathur had also confirmed recently that this was,
indeed, the first deal under the new offsets rule, requiring the French
to make components and other articles here.
"The agreement is
also very important for Dassault. In addition to the 84 aircraft on
order, it also has to cater to the French Air Force. So, a pact for a
manufacturing unit in India will help the French firm to build on the
existing line at Merignac," an official said, referring to the facility
near Bordeaux, southwest France.
India's original plan was to buy
126 Rafale aircraft -- valued at around $11 billion in the first tender
floated in 2007. The planes were envisaged to be made in India with
Hindustan Aeronautics. Given the delays, Modi had announced a truncated
deal, to begin with, during his visit to France last month.